Abstract

The killer argument in the German Policy debate is the fiscal one: we cannot afford a universal basic income (UBI). Fiscal effects are calculated by applying standard microsimulation and general computable equilibrium models. While these empirical models are useful for ex-ante evaluations of marginal reforms, the introduction of a basic income scheme is a fundamental reform associated with behavioural responses that are only partially captured by standard empirical models. Therefore, the proposed randomised controlled trials using nudges will provide more insights into the German institutional setting.