Is Basic Income a Cure for Unemployment in Unionized Economies? A General Equilibrium Analysis

Bruno Van der Linden

Annals of Economics and Statistics, 2002, issue 66, 81-105

Abstract: This paper deals with the effect of basic income schemes on the equilibrium unemployment rate. It develops a dynamic general equilibrium model of a unionized economy where the budget of the State has to be balanced in each period. Compared to a benchmark situation with an unemployent insurance, it is shown that appropriately defined basic income schemes lower the steady-state unemployment rate. Moreover, the dynamic adjustment induced by such reforms can be Pareto-improving.

Date: 2002
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Persistent link: https://EconPapers.repec.org/RePEc:adr:anecst:y:2002:i:66:p:81-105

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