Basic income, unemployment and job scarcity

Loek Groot

No 2004025, Discussion Papers (REL - Recherches Economiques de Louvain) from Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES)

Abstract: The main claim of this paper is that in a world of equal entitlements to work rights the justification for a basic income is stronger, and that its level should be higher. the higher the level of unemployment or job scarcity. Point of departure is an economy with job scarcity. A fair way to deal with job scarcity is to grant everybody an equal right to work, where these rights can be freely traded. It turns out that such a Labour Rights scheme and a basic income scheme are equivalent. The equivalence is that the price of Labour Rights and the unemployment benefit corresponds to the income tax rate and basic income respectively. The tax rate can thus be considered as what workers have to pay to appropriate scarce job assets. Both schemes allow that some people voluntarily abstain from doing paid work, in return for a financial compensation. Therefore, the advantages in terms of equity and efficiency of a Labour Rights scheme equally apply to the basic income proposal. This analysis provides an argument against cutting unemployment and social assistance benefits during economic downturns and it offers new insights to evaluate the parasitism and exploitation objection raised against basic income.

Keywords: Unemployment; Right to work; Basic income; Social policy; Exploitation (search for similar items in EconPapers)
JEL-codes: D63 H53 J21 J22 J23 J31 J64 (search for similar items in EconPapers)
Pages: 20
Date: 2004-06-01
References: View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Journal Article: Basic income, unemployment and job scarcity (2004)
Journal Article: Basic income, unemployment and job scarcity (2004)
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