Hugo Rajão

It is widely claimed that UBI has the potential to contribute to the de-commodification of labor, by reducing workers’ exit costs of leaving their jobs. In this paper I argue that the housing need may challenge the effectiveness of UBI as an exit option for workers. This is due to the combination of a possible income gap between the UBI amount and lower income level offered by the labor market (according to the modest UBI amounts generally proposed in the literature), high housing prices, and some specific difficulties that housing expenditures might imply in readjusting them to the UBI amount. These difficulties include: fixed prices; contractual obligations; limited consumption alternatives; search and seek efforts; logistical costs; community ties; identity considerations; relational costs; and hurdles associated with returning to a prior living situation. Thus, when attempting to implement UBI, as an exit option for workers, the need for housing should be considered as a possible feasibility constraint.