A Model of Conditional and Unconditional Social Security in an Efficiency Wage Economy : The Economic Sustainability of a Basic Income

This article identifies the circumstances under which the introduction of a basic income in an efficiency-wage economy leads to the desirable effects of lower unemployment, nondecreasing real incomes and profits, and an increase of secondary- versus primary-sector wages. The model analyses show that a moderate basic income can be compatible with lower unemployment, higher GDP,higher real incomes for workers, lower income inequality between workers, but a lower real income for the (voluntary) unemployed