Universal Basic Income (UBI) as a Policy Response to Current Challenges

Kearney, Melissa S. and Magne Mogstad, Maintaining the Strength of American Capitalism, August .


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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