An unconditional basic income in the family context: Labor supply and distributional effects

Julia Horstschräer, Markus Clauss and Reinhold Schnabel

No 10-091, ZEW Discussion Papers from ZEW - Leibniz Centre for European Economic Research

Abstract: In this paper we estimate the effects of an unconditional basic income on labor supply and income distribution with a special focus on the incentives to work in the family context. An unconditional basic income guarantees every citizen a minimum income without any means-testing. We simulate a proposed basic income reform with a detailed microsimulation model, estimate labor supply reactions with a structural labor supply model and perform distributional analysis using micro data from the German Socio-Economic Panel. As the originally proposed basic income concept yields a very high deficit, we also analyze two budget neutral alternatives. Comparing labor supply and distributional results of the budget neutral alternatives, the well-known equity-effciency trade-off is unveiled. In the family context our analyzes suggest that the unconditional character of the basic income causes increasing family incomes, but also serious disincentives to work for secondary earners.

Keywords: basic income; negative income tax; flat tax; female labor supply (search for similar items in EconPapers)
JEL-codes: C15 D31 D78 H31 H53 J08 J22 (search for similar items in EconPapers)
Date: 2010
New Economics Papers: this item is included in nep-cmp
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (21)

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Persistent link: https://EconPapers.repec.org/RePEc:zbw:zewdip:10091

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