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Welfare work Requirements with Paternalistic Government Preferences

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  • Robert Moffitt

Abstract

Work requirements in means-tested transfer programmes have grown in importance in the US and in some other countries. The theoretical literature which considers their possible optimality generally operates within a traditional welfarist framework where some function of the utility of the poor is maximised. Here we consider a case where society instead has preferences over the actual work allocations of welfare recipients. Optimality of work requirements is shown to be possible but depends on the accuracy of the screening mechanism which assigns work requirements. Numerical simulations show that accuracy must be high for optimality. Earnings subsidies may also be optimal. Copyright 2006 The Author(s). Journal compilation Royal Economic Society 2006.

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Bibliographic Info

Article provided by Royal Economic Society in its journal The Economic Journal.

Volume (Year): 116 (2006)
Issue (Month): 515 (November)
Pages: F441-F458

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Handle: RePEc:ecj:econjl:v:116:y:2006:i:515:p:f441-f458

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  1. Diamond, Peter & Sheshinski, Eytan, 1995. "Economic aspects of optimal disability benefits," Journal of Public Economics, Elsevier, vol. 57(1), pages 1-23, May.
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  9. Louis Kaplow, 2006. "Optimal Income Transfers," NBER Working Papers 12284, National Bureau of Economic Research, Inc.
  10. Chone, Philippe & Laroque, Guy, 2005. "Optimal incentives for labor force participation," Journal of Public Economics, Elsevier, vol. 89(2-3), pages 395-425, February.
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Cited by:
  1. Ruggero Paladini, 2014. "Da Bentham alla tassazione ottimale," Public Finance Research Papers 2, Istituto di Economia e Finanza, DIGEF, Sapienza University of Rome.
  2. Alexander M. Gelber, 2010. "Taxes and Time Allocation: Evidence from Single Women," 2010 Meeting Papers 1031, Society for Economic Dynamics.
  3. Brett, Craig & Jacquet, Laurence, 2011. "Workforce or Workfare?," Discussion Paper Series in Economics 8/2011, Department of Economics, Norwegian School of Economics.
  4. Tomer Blumkin & Yoram Margalioth & Efraim Sadka, 2013. "The desirability of workfare in the presence of misreporting," International Tax and Public Finance, Springer, vol. 20(1), pages 71-88, February.
  5. Jesse Rothstein, 2009. "Is the EITC Equivalent to an NIT? Conditional Cash Transfers and Tax Incidence," NBER Working Papers 14966, National Bureau of Economic Research, Inc.
  6. Aaberge, Rolf & Flood, Lennart, 2013. "U.S. versus Sweden: The Effect of Alternative In-Work Tax Credit Policies on Labour Supply of Single Mothers," Working Papers in Economics 576, University of Gothenburg, Department of Economics.
  7. Mojsoska-Blazevski, Nikica & Petreski, Marjan & Petreska, Despina, 2013. "Increasing labour market activity of poor and female: Let’s make work pay in Macedonia," MPRA Paper 57228, University Library of Munich, Germany.
  8. Stefanie Behncke & Markus Frölich & Michael Lechner, 2007. "Targeting Labour Market Programmes - Results from a Randomized Experiment," University of St. Gallen Department of Economics working paper series 2007 2007-37, Department of Economics, University of St. Gallen.
  9. John Hatfield & Fuhito Kojima & Yusuke Narita, 2012. "Promoting School Competition Through School Choice: A Market Design Approach," Discussion Papers 12-019, Stanford Institute for Economic Policy Research.

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