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The Theory and Practice of Wage Subsidisation: Some Historical Reflections

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  • F. Wilkinson

Abstract

Economists explain welfare dependency of the unemployed and in-work poverty by the low labour market quality of the poor. Work can be made to pay by working family tax credits. But these might lower wages and price non-recipients out of the market, widening the eligibility for the wage supplementation and raising social welfare bills. This was precisely the effect of the Speenhamland system of wage supplementation of the early 19th Century which permanently affected labour markets, and attitudes to welfare and the poor. The possibility of working family tax credit having a similar effect cannot be ruled out.

Suggested Citation

  • F. Wilkinson, 2001. "The Theory and Practice of Wage Subsidisation: Some Historical Reflections," Working Papers wp201, Centre for Business Research, University of Cambridge.
    • Handle: RePEc:cbr:cbrwps:wp201
    Note: PRO-2
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    File URL: https://www.jbs.cam.ac.uk/cbrwp201/
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    References listed on IDEAS

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    1. Toye, John, 1997. "Keynes on Population and Economic Growth," Cambridge Journal of Economics, Oxford University Press, vol. 21(1), pages 1-26, January.
    2. Fortin, Pierre & Keil, Manfred & Symons, James, 2001. "The Sources of Unemployment in Canada, 1967-91: Evidence from a Panel of Regions and Demographic Groups," Oxford Economic Papers, Oxford University Press, vol. 53(1), pages 67-93, January.
    3. Deakin, Simon & Wilkinson, Frank, 1991. "Labour Law, Social Security and Economic Inequality," Cambridge Journal of Economics, Oxford University Press, vol. 15(2), pages 125-148, June.
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    Cited by:

    1. Frank Wilkinson, 2002. "Productive Systems and the Structuring Role of Economic and Social Theories," Working Papers wp225, Centre for Business Research, University of Cambridge.

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    More about this item

    Keywords

    Wage supplementation; welfare to work and labour markets;

    JEL classification:

    • J58 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Public Policy
    • J78 - Labor and Demographic Economics - - Labor Discrimination - - - Public Policy (including comparable worth)
    • J4 - Labor and Demographic Economics - - Particular Labor Markets
    • I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs

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