February 24, 2015


Is unconditional basic income a viable alternative to other social welfare measures?

Studies show that unconditional basic income (UBI):

  • redistributes gains from automation and globalization
  • acts as a good buffer against shocks and systemic risks
  • does not create “poverty traps

Automation and globalization have brought about a tremendous increase in productivity, but has also accelerated job destruction, systemic risks and greater income inequality.

Research discussed in a new paper by Ugo Colombino shows that, under certain conditions, UBI might be an important policy innovation for redistributing the gains from automation and globalization, building a buffer against shocks and systemic risks, and generating positive labor supply incentives among poor people.

While a UBI policy is simple and transparent, with low administration costs, financing it might require higher taxes. Although the evidence on implied efficiency losses is mixed, carefully designed taxes can avoid the risk of canceling the potential benefits of unconditional basic income through efficiency losses.

Is unconditional basic income a viable alternative to other social welfare measures? by Ugo Colombino was published by IZA World of Labor on 24th February 2015. 


IZA World of Labor is a free, online resource created by the Institute for the Study of Labor (IZA) in collaboration with Bloomsbury Publishing Plc. Articles focus on global labor economics issues, drawing on empirical, evidence-based research in order to offer pertinent comment and evaluation, and best-practice policy advice.

Ugo Colombino is a Professor of Economics at the University of Turin (Italy).  He is a member of CHILD – Centre for Household, Income, Labor and Demographic economics. He joined the IZA as a Research Fellow in 2009.