This book analyzes the consequences that would arise if Germany¿s means-tested unemployment
benefits were replaced with an unconditional basic income. The basic income scheme introduced
is based on a negative income tax and calibrated to be both financially feasible and compatible
with current constitutional legislation. Using data from the German Socio-Economic Panel
(GSOEP) the author examines the impact of the reform on the household labor supply as well as
on both poverty and inequality measures. It is shown that by applying reasonable values for
both the basic income and the implied marginal tax rate imposed on earned incomes efficiency
gains can be reconciled with generally accepted value statements. Furthermore as the proposal
includes a universal basic income for families child poverty could be reduced considerably.
The estimates are based on the discrete choice approach to labor supply.
