Active Citizen's Income, Unconditional Income and Participation under Imperfect Competition: A Normative Analysis

Bruno Van der Linden

No 1999023, LIDAM Discussion Papers IRES from Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES)

Abstract: Various types of basic income schemes are considered to compensate the allocative inefficiencies induced by unemployment insurance systems. This paper develops a dynamic general equilibrium model of a unionized economy where participation to the labor market is endogenous and the budget of the State has to balance. It is shown that basic income schemes reduce the equilibrium unemployment rate. The normative analysis suggest that only the active population should be eligible to the basic income. Introducing an `active citizen's income' can be a Pareto-improving reform.

Keywords: Basic income; wage bargaining; unemployment; participation; optimal taxation; ‘`WS-PS' model (search for similar items in EconPapers)
JEL-codes: H21 H23 J51 J68 (search for similar items in EconPapers)
Pages: 30
Date: 1999-08-01
New Economics Papers: this item is included in nep-pbe
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Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:ctl:louvir:1999023

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