Template-Type: ReDIF-Paper 1.0
Title: Universal Basic Income (UBI) as a Policy Response to Current Challenges
Author-Name: Melissa S. Kearney, Magne Mogstad
Abstract: There is growing concern that current US transfer and social welfare
  programs are ill-equipped to address widening income inequality,
  stagnant income growth, declining economic mobility, and the negative
  impact of automation. This has led to a renewed debate over the merits
  of a Universal Basic Income (UBI) program and its capacity to address
  these pressing issues.
  
  Kearney and Mogstad argue that, in practice, a UBI would be an extremely
  expensive, inefficiently targeted, and potentially harmful policy that
  would solve none of the economic challenges it purports to address.
  First, a UBI that provided $10,000 a year to every American adult would
  cost more than half of the current annual federal budget. To fund such a
  program would require the crowd out of existing programs and potential
  investments. Second, since a UBI is not inherently designed to
  redistribute resources to the most needy individuals, moving from our
  current system to a UBI would redistribute resources away from those who
  are most likely to benefit from income support programs. And third,
  since a UBI lacks a direct mechanism to help workers learn new skills or
  broadly support the development of human capital in the U.S., it does
  not offer a long-term solution to the challenge of weakened employment
  prospects.
  
  Kearney and Mogstad do not favor a UBI, but they do recommend improved
  and expanded government programs to expand economic opportunity and
  address income inequality. Specifically, they favor increased government
  funding for targeted investments that support families and workers,
  including early-childhood education, skills training, subsidized daycare
  and housing, and other initiatives.
Creation-Date: 2019-11-01
Keywords: public finance, poverty, labor, UBI
File-URL: https://www.economicstrategygroup.org/wp-content/uploads/2026/06/Universal-Basic-Income-as-a-Policy-Response.pdf
File-Format: Application/PDF
Handle: RePEc:cxx:wpaper:universal-basic-income-as-a-policy-response