Arbeitspapier

The Political Sustainability of a Basic Income Scheme and Social Health Insurance

This paper studies how society votes on the payroll taxes of a basic income and a social health insurance scheme. Individuals differ along the two most important dimensions when it comes to the design of the two welfare schemes, namely, income and risk. Even though the introduction of a basic income scheme opens up the possibility for additional redistribution, it also crowds out social health insurance. We show that when both welfare schemes are open for debate, the political equilibrium is such that only the basic income scheme prevails. At the constitutional stage we determine which welfare scheme society agrees to implement behind the veil of ignorance and with a Rawlsian objective. Since social health insurance not only redistributes income from rich to poor but also from low-risk to high-risk agents, the doubly disadvantaged in society - low-income and high-risk agents - may lose out in the political process when a basic income scheme is in place. Depending on the amount of health care expenditure and the inequalities in income and risk, it may well be that a society will find it optimal to set up an institutional framework for a social health insurance scheme only.

Sprache
Englisch

Erschienen in
Series: CESifo Working Paper ; No. 4986

Klassifikation
Wirtschaft
Welfare Economics: General
Analysis of Collective Decision-Making: General
Structure and Scope of Government: General
Taxation, Subsidies, and Revenue: General
National Government Expenditures and Related Policies: General
Thema
basic income
social health insurance
income taxation
political support

Ereignis
Geistige Schöpfung
(wer)
Kifmann, Mathias
Roeder, Kerstin
Ereignis
Veröffentlichung
(wer)
Center for Economic Studies and ifo Institute (CESifo)
(wo)
Munich
(wann)
2014

Handle
Letzte Aktualisierung
10.03.2025, 11:41 MEZ

Datenpartner

Dieses Objekt wird bereitgestellt von:
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. Bei Fragen zum Objekt wenden Sie sich bitte an den Datenpartner.

Objekttyp

  • Arbeitspapier

Beteiligte

  • Kifmann, Mathias
  • Roeder, Kerstin
  • Center for Economic Studies and ifo Institute (CESifo)

Entstanden

  • 2014

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