UNconditional Social ASSistance and Unemployment Benefits

Project Details


European welfare states are in crisis. It is customary in political and academic debates to criticize them based on their inability to meet new challenges linked to inequality, globalization, or technological changes. Among the many proposals that are currently on the table to reform welfare states, one is receiving a lot of attention: lifting the current conditions that social assistance beneficiaries or unemployed workers must fulfil to be eligible to these transfers. Such a reform is often called the universal basic income proposal. The two main conditions are: 1) be ready to take a job when one becomes available and 2) not live with a rich partner. Surprisingly, economists are not well equipped to address the question of the consequence of removing these conditions, as both theoretical and empirical works are mistakenly assuming full take up of these benefits. We address this shortcoming, by proposing to redefine social welfare when account is taken of these conditions and by re-estimating behavioral responses to changes in taxation under the correct assumption that these two conditions currently prevail. The expected outcomes are the calibration of the social welfare maximizing national tax systems in Belgium, France, Germany, Luxembourg, and the UK, the simulation of the impact of conditionality reforms on the distribution of welfare in these countries, and the identification of desirable fiscal reforms consistent with the new definition of social welfare. The five countries are chosen because of their large heterogeneity in the way they tax low incomes.
Effective start/end date1/09/2331/08/27


  • Luxembourg National Research Fund (FNR)


  • social welfare function
  • optimal income taxation
  • social assistance
  • unemployment benefits
  • conditionality
  • labor supply estimation
  • microsimulation