Abstract Recipients of public assistance and unemployment benefits face an effective marginal tax rate of (almost) 100%, since these payments decline in a ratio of one by one when own income is earned. The metaphor of an “unemployment trap” describes this labour supply disincentive quite...

Abstract Johann Eekhoff deals with the employment of low skilled workers. He recommends not to subsidize recipients of social security, but to offer them unpaid jobs, so that they get a chance to render their services in return of the received social aid, to train their skills, and to improve...