A Quantitative Evaluation of Universal Basic Income ∗

We provide a quantitative evaluation of the impact of Universal Basic Income (UBI) on macroeconomic aggregates, inequality and welfare, exploring different levels of UBI generosity, paired with different strategies to finance it. We find that different levels of UBI can generate welfare improvements in the long-run, and that more generous UBI requires financing through consumption taxes. While welfare improvements are possible for individuals entering the steady state, the analysis of the transitional dynamics suggest generalized welfare losses for existing individuals, casting doubt on the desirability of such reforms. These losses are increasing in the level of generosity of UBI.