Incentive Effects of Some Pure and Mixed Transfer Systems
This article argues that the existence of a wage subsidy as the sole component of an income transfer system is both unlikely and undesirable. A mixed wage subsidy-public assistance program is defined. Using traditional analysis and new graphical methods developed in the article, the effects on labor supply of the mixed system are compared to those of a negative income tax and of a wage subsidy not augmented by other transfers. For certain reasonable sets of wage rates and hours of work, the work incentive advantage generally attributed to a wage subsidy disappears when that program is realistically defined. The range over which the conclusions are apt to be relevant is illustrated in an Appendix.
Year of publication: |
1971
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Authors: | Barth, Michael C. ; Greenberg, David H. |
Published in: |
Journal of Human Resources. - University of Wisconsin Press. - Vol. 6.1971, 2
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Publisher: |
University of Wisconsin Press |
Saved in:
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