Designing a basic income system with a social welfare function

Ronny Aboudi, Dominique Thon, Mingli Zheng

Research output: Contribution to journalArticlepeer-review

1 Scopus citations

Abstract

There is an irreducible conflict between, on the one hand, the desire to allocate income in society in an equitable way and, on the other, the desire to alleviate poverty. The conflict materializes itself in the problem of designing a basic income (or negative income tax) system which requires formulating a workable compromise. This paper approaches the problem through solving a mathematical program whose utility-based objective function explicitly embodies both considerations. The solution describes a simple basic income system and its comparative statics indicate how the specification of the objective function leads to a more, or less, pro-poor solution.

Original languageEnglish (US)
Pages (from-to)546-568
Number of pages23
JournalJournal of Public Economic Theory
Volume16
Issue number4
DOIs
StatePublished - Aug 2014

ASJC Scopus subject areas

  • Finance
  • Sociology and Political Science
  • Economics and Econometrics

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