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Entrepreneur Andrew Yang speaks on the second night of the second 2020 Democratic U.S. presidential debate in Detroit, Michigan, July 31, 2019. REUTERS/Lucas Jackson - HP1EF81016VM6
Report

Universal basic income as a policy response to current challenges

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Editor's Note:

This memo was originally prepared for the Aspen Economic Strategy Group.

Abstract

Authors

Magne Mogstad

Gary S. Becker Professor in Economics and the College - Kenneth C. Griffin Department of Economics, University of Chicago

We briefly review the main motivations behind recent calls for a Universal Basic Income (UBI) in the United States and the main features of some current UBI proposals. We then argue that a UBI would be extremely expensive and yet do very little to reduce inequality or advance opportunity and social mobility. We argue that instead of a UBI, the federal government should pursue a pro-work strategy of income support, paying wage subsidies to low-wage workers along with targeted transfer benefits consisting of both cash and near-cash types of support paid to the most needy individuals and households.

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