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Discussion Paper Details

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Title: Universal Basic Income: Some Theoretical Aspects

Author(s): Maitreesh Ghatak and Francois Maniquet

Publication Date: March 2019

Keyword(s): Labour Supply, unconditional cash transfers, universal basic income and welfare policies

Programme Area(s): Development Economics, Macroeconomics and Growth and Public Economics

Abstract: In this paper, we review possible theoretical justifications of a universal basic income (UBI) scheme and also examine the determinants of its feasibility and scope. We begin by contrasting the unconditionality of UBI with the many conditions that typically accompany other welfare policies. Possible justifications for an unconditional UBI range from pure normative reasons to practical reasons due to the problem of screening beneficiaries and imperfections in institutions in charge of implementing tax and welfare policies. We also explore theoretically the conditions that determine the feasibility and size of a UBI. The broad picture that emerges from our review is that both normative and practical considerations make UBI easier to defend as a tool of poverty alleviation in poor economies than a tool to achieve social justice in rich ones.

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Bibliographic Reference

Ghatak, M and Maniquet, F. 2019. 'Universal Basic Income: Some Theoretical Aspects'. London, Centre for Economic Policy Research. https://cepr.org/active/publications/discussion_papers/dp.php?dpno=13635