Basic Income Stalls the Economy: Economic Conditions Affecting the Effects of Basic Income and the Response to Relative Income

  • Kosei Takashima HAKUOH UNIVERSITY
  • Isao Yagi Kogakuin University
Keywords: agent-based modeling, basic income, work motivation, simulation, business cycle

Abstract

Basic income (BI) is a social welfare policy idea that has recently received much attention. BI implementation requires extensively transforming social and economic systems, possibly resulting in significant, unforeseeable impacts. This study focused on the impact of BI in terms of its effectiveness based on relative income and economic conditions at the time of its implementation. We analyzed the impact using a simulation approach with a macro artificial economy model that incorporates multilayered feedback paths and encompasses a complete flow of funds mechanism. The analysis revealed conditional impacts depending on the BI implementation period. A boom can stagnate or a recession can recover, depending on the public’s work motivation. Particularly, when work motivation is high and the economy expands, BI implementation may slow down economic activities.

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Published
2025-10-07
Section
Theory Papers