UChicago’s Magne Mogstad Co-authors Memo on Universal Basic Income for Aspen Institute Economic Strategy Group

Magne Mogstad, Director of the BFI Ronzetti Initiative for the Study of Labor Markets and the Gary S. Becker Professor in Economics and the College, the Kenneth C. Griffin Department of Economics, and Melissa Kearney, the Neil Moskowitz Professor of Economics at the University of Maryland, examine the viability of a universal basic income in  “Universal Basic Income (UBI) as a Policy Response to Current Challenges” for the Aspen Institute’s Economic Strategy Group.

Abstract: 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.