How Sustainable is Need-Based Redistribution?

Stefan Traub (), Jan Philipp Krügel () and Meike Benker ()
Additional contact information
Stefan Traub: Helmut-Schmidt University Hamburg
Jan Philipp Krügel: Helmut-Schmidt University Hamburg
Meike Benker: Helmut-Schmidt University Hamburg

Chapter Chapter 8 in Priority of Needs?, 2024, pp 195-232 from Springer

Abstract: Abstract This chapter examines the economic sustainability of need-based income redistribution via the welfare state. We model the welfare state as an insurance device to reduce the variance of lifetime incomes when social inequality results from individual risk-taking, specifically educational investment. Our contract-theoretic model analysis shows that income redistribution can lead to higher efficiency and overall welfare under certain conditions. In this context, need-based redistribution, which includes an explicit means test, is clearly superior to an unconditional basic income. Experimental tests of the model confirm the hypothesis that need-based redistribution is sustainable. From our theoretical and experimental results, we conclude that a lexicographic combination of need-based justice and equity—the Boulding principle—not only reflects the redistribution preferences of the population well, but is also convincing from an ethical perspective.

Date: 2024
References: Add references at CitEc
Citations:

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:spr:sprchp:978-3-031-53051-7_8

Ordering information: This item can be ordered from
http://www.springer.com/9783031530517

DOI: 10.1007/978-3-031-53051-7_8

Access Statistics for this chapter

More chapters in Springer Books from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().