A basic income can raise employment and welfare for a majority
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With growing interest in a universal basic income (BI), we provide new results for a majority to benefit from replacing (some) unemployment benefits with BI. Given any income distribution and an extensive margin, such a replacement always benefits those remaining unemployed, raises utilitarian welfare, and benefits a poor - or even a working - majority. Similar results follow with involuntary unemployment, and joint distributions of wages and costs of work. Moreover, using quasi-linear utility with intensive margins, marginal introduction of BI can still benefit a large proportion of the poor whose productivities are below the average, without raising unemployment.
FitzRoy , F R & Jin , J Y 2015 ' A basic income can raise employment and welfare for a majority ' School of Economics & Finance Discussion Paper , no. 1508 , University of St Andrews , St Andrews , pp. 1-29 .
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