Open AccessUniversal basic income and skill‑ biased technological change
Author(s) -
José Pedro Silva Coelho
Publication year - 2020
Publication title -
notas económicas/notas económicas
Language(s) - English
Resource type - Journals
eISSN - 2183-203X
pISSN - 0872-4733
DOI - 10.14195/2183-203x_51_6
Subject(s) - basic income , economics , technological change , economic inequality , inequality , context (archaeology) , welfare , labour economics , income distribution , public economics , macroeconomics , market economy , mathematical analysis , paleontology , mathematics , biology
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. We have developed 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.