An unconditional basic income in the family context : labor supply and distributional effects

Horstschräer, Julia ; Clauss, Markus ; Schnabel, Reinhold

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URN: urn:nbn:de:bsz:180-madoc-30915
Document Type: Working paper
Year of publication: 2010
The title of a journal, publication series: None
Publication language: English
Institution: Sonstige Einrichtungen > ZEW - Leibniz-Zentrum für Europäische Wirtschaftsforschung
MADOC publication series: Veröffentlichungen des ZEW (Leibniz-Zentrum für Europäische Wirtschaftsforschung) > ZEW Discussion Papers
Subject: 330 Economics
Classification: JEL: C15 D31 D78 H31 H53 J08 J22 ,
Subject headings (SWD): Deutschland , Garantiertes Mindesteinkommen , Wirkungsanalyse , Arbeitsangebot , Familienökonomie , Negative Einkommensteuer , Mikrosimulation
Keywords (English): Basic income , negative income tax , flat tax , female labor supply
Abstract: In this paper we estimate the effects of an unconditional basic income on labor supply and income distribution with a special focus on the incentives to work in the family context. An unconditional basic income guarantees every citizen a minimum ncome without any means-testing. We simulate a proposed basic income reform with a detailed microsimulation model, estimate labor supply reactions with a structural labor supply model and perform distributional analysis using micro data from the German Socio-Economic Panel. As the originally proposed basic income concept yields a very high deficit, we also analyze two budget neutral alternatives. Comparing labor supply and distributional results of the budget neutral alternatives, the well-known equity-efficiency trade-off is unveiled. In the family context our analyzes suggest that the unconditional character of the basic income causes increasing family incomes, but also serious disincentives to work for secondary earners.
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