Exploring the effects and mechanisms of a Universal Basic Income on Education

Academic Paper from the year 2022 in the subject Economics - Other, University of St. Gallen, language: English, abstract: This paper aims to find out about the effects of a Universal Basic Income on education. At first, the concept of the Universal Basic Income will be explained and it will be put into a global context. Further, its effect on education will be analyzed using various studies conducted over the last decades, to estimate the short-term impacts a UBI would have on education. In order to also go into detail on long-term effects, the latter analysis will be complemented with a model by Daruich & Fernández (2020). This will show that while short-term effects of a Universal Basic Income might seem favorable when viewing a UBI policy over a longer time frame effects such as a general equilibrium and intergenerational linkages come into play. This leads to the conclusion that while a Universal basic income might seem to increase education standards at first glance, over the long-term this would most likely not be the case, even considering extreme scenarios, such as massive job losses due to automation.