Evaluating Universal Basic Income

Masaya Yasuoka

No 312, Discussion Paper Series from School of Economics, Kwansei Gakuin University

Abstract: This paper examines the macroeconomic effects of universal basic income (UBI). Most social security benefits are provided only when certain eligibility conditions are met. By contrast, UBI provides a uniform payment to all households without imposing eligibility criteria or conditions for receipt. The results are as follows. In both the dynamic general equilibrium (DGE) model and the dynamic stochastic general equilibrium (DSGE) model, a positive UBI payment shock increases gross domestic product, and this effect persists even after the shock has dissipated. This finding suggests that UBI may have a growth-enhancing effect, primarily because it promotes capital accumulation. The results also show that the increase in gross domestic product is larger in the DSGE model than in the DGE model. This is because the presence of inflation encourages investment in real capital, thereby generating greater capital accumulation in the DSGE model than in the DGE model.

Keywords: Basic Income; DSGE Model; Ramsey Model (search for similar items in EconPapers)
JEL-codes: E20 H23 (search for similar items in EconPapers)
Pages: 28 pages
Date: 2026-06
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