Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/48205 
Year of Publication: 
2011
Series/Report no.: 
HWWI Research Paper No. 107
Publisher: 
Hamburgisches WeltWirtschaftsInstitut (HWWI), Hamburg
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

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