Unemployment insurance is a more effective insurance program against shocks than UBI.

A dynamic equilibrium model using data from the US during the years 1990 - 2011 was used to compare UI to UBI. The authors write: "One way to think of why UI so clearly dominates UBI is that UI is simply better at targeting support where it is needed most. UBI has the major disadvantage of requiring much higher (distorting) taxes to sustain the same level of support for the needy, while wasting most of its payments on those with low marginal utility of consumption. Clearly UBI, even if it is sustainable for the economy, is not a good insurance mechanism against shocks."

econometric