The Macroeconomic Effects of Universal Basic Income Programs

The author constructs an econometric model of the US economy by developing an overlapping generations model with idiosyncratic income risk, inclusive of intensive and extensive margins of labor supply, on-the-job learning, and child-bearing costs. Using the model to conduct counterfactual analyses of replacing the US income-security system with a UBI, he finds that, inclusive of taxes to fund a $1,000/month UBI, macroeconomic aggregates decrease, but welfare increases.


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