Universal Basic Income: A Dynamic Assessment

Diego Daruich, Raquel Fernández

    Research output: Contribution to journalArticlepeer-review


    Universal basic income (UBI) is an increasingly popular policy proposal, but there is no evidence regarding its longer-term consequences. We find that UBI generates large welfare losses in a general equilibrium model with imperfect capital markets, labor market shocks, and intergenerational linkages via skill formation and transfers. This conclusion is robust to various alternative ways of financing UBI. By using observationally equivalent models that eliminate different sources of endogenous dynamic linkages (equilibrium capital market and parental investment in child skills), we show that the latter are largely responsible for the negative welfare consequences.

    Original languageEnglish (US)
    Pages (from-to)38-88
    Number of pages51
    JournalAmerican Economic Review
    Issue number1
    StatePublished - Jan 2024

    ASJC Scopus subject areas

    • Economics and Econometrics


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