Universal basic income and skill-biased technological change

José Coelho

MPRA Paper from University Library of Munich, Germany

Abstract: In the last decades, income inequality has been on the rise in the U.S. The growing skill premium suggests the pivotal role of skill-biased technological change (SBTC) in promoting the observed increase in inequality levels. In this context, labor income tax structures have been central to the policy debate. I develop an overlapping generations model to perform a welfare evaluation of Universal basic income (UBI) tax structures and verify how these interact with SBTC. I find that an UBI system would have improved social welfare in 2010 when compared to the existing tax system and determine that this result is primarily motivated by SBTC.

Keywords: Income Inequality; Skill Premium; Optimal Taxation; Universal Basic Income (search for similar items in EconPapers)
JEL-codes: E24 E62 H21 (search for similar items in EconPapers)
Date: 2020-01-06, Revised 2020-03-20
New Economics Papers: this item is included in nep-dge, nep-mac and nep-pbe
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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