2 ms·
Doesn't Denmark have a normal European style "Conditional" welfare system? That has very different dynamics from an UnConditional basic income. Often the way t
by Kim_Bruning 5y ago
Doesn't Denmark have a normal European style "Conditional" welfare system? That has very different dynamics from an UnConditional basic income.
Often the way that welfare is implemented is that if you can't work, you get welfare. This seems like a really obvious, logical, good idea. But there's a trap (a welfare trap!). Because on the other side, when you start working again, you stop getting welfare. And your net income might actually go down.
A rational actor might therefore end up stuck in this local optimum where they stay on welfare and never start working.
One argument for UBI is that it eliminates the drop in income associated with the return to work (because you get it unconditionally: whether you are working or not) . A theoretical prediction might therefore be that more people would work if UBI is available.
In practical tests so far this doesn't seem to have quite panned out. This is due to UBI having multiple effects simultaneously. However, I would be most amused to see if in some situations this does became the dominant effect, and the number of working people went up.