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Title:Efficient redistribution: Comparing basic income with unemployment benefit PDF Logo
Authors:FitzRoy, Felix
Jin, Jim
Issue Date:2011
Series/Report no.:HWWI Research paper 107
Abstract:Given a general utility function and income distribution, we compare two systems of income redistribution: unemployment benefits (UB) conditional on not working and basic income (BI) available to everyone. Based on strong empirical evidence we first focus on extensive margins of labor supply. For any given unemployment level, lowering UB and raising BI always benefits the unemployed, raises utilitarian welfare and benefits a poor majority. Reducing unemployment and UB simultaneously can benefit a majority of the employed as well as all unemployed. Similar results hold even if we allow involuntary unemployment or intensive margins.
Subjects:basic income
unemployment benefits
extensive margins
JEL:H20
D40
Document Type:Working Paper
Appears in Collections:HWWI Research Papers, Hamburgisches WeltWirtschaftsInstitut

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