Universal basic income and skill -biased technological change

José Coelho ()
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José Coelho: Nova School of Business and Economics

Notas Económicas, 2020, issue 51, 109-132

Abstract: In the last decades, income inequality has been on the rise in the U.S. The growing skill premium suggests the pivotal role of skill -biased technological change (SBTC) in promoting the observed increase in inequality levels. In this context, labor income tax structures have been central to the policy debate. We have developed an overlapping generations model to perform a welfare evaluation of Universal basic income (UBI) tax structures and verify how these interact with SBTC. I find that an UBI system would have improved social welfare in 2010 when compared to the existing tax system and determine that this result is primarily motivated by SBTC.

Keywords: Income inequality; skill premium; optimal taxation; universal basic income. (search for similar items in EconPapers)
JEL-codes: E24 E62 H21 (search for similar items in EconPapers)
Date: 2020
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Persistent link: https://EconPapers.repec.org/RePEc:gmf:journl:y:2020:i:51:p:109:132

DOI: 10.14195/2183-203X_51_6

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