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Workfare, Monitoring, and Efficiency Wages

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Author Info
Christian Holzner ()
Volker Meier ()
Martin Werding ()

Additional information is available for the following registered author(s):

Abstract

The impact of a stronger work requirement for welfare recipients in a workfare program is studied in an efficiency wage model where a representative firm chooses its level of monitoring activities. A stricter workfare policy raises employment and monitoring activities. It typically increases profits and reduces the tax rate. The impact on the net wage is ambiguous. Utility levels of employed workers and welfare recipients may increase even if the net wage declines. The utility differential between these two groups of workers shrinks.

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File URL: http://www.cesifo-group.de/DocCIDL/cesifo1_wp1749.pdf
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Publisher Info
Paper provided by CESifo Group Munich in its series CESifo Working Paper Series with number CESifo Working Paper No. 1749.

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Date of creation: 2006
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Handle: RePEc:ces:ceswps:_1749

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Related research
Keywords: workfare; welfare; efficiency wages; monitoring;

Other versions of this item:

Find related papers by JEL classification:
H53 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Welfare Programs
J41 - Labor and Demographic Economics - - Particular Labor Markets - - - Labor Contracts
J60 - Labor and Demographic Economics - - Mobility, Unemployment, and Vacancies - - - General

This paper has been announced in the following NEP Reports:

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Shapiro, Carl & Stiglitz, Joseph E, 1984. "Equilibrium Unemployment as a Worker Discipline Device," American Economic Review, American Economic Association, vol. 74(3), pages 433-44, June. [Downloadable!] (restricted)
  2. Peter Fredriksson & Bertil Holmlund, 2006. "Optimal unemployment insurance design: Time limits, monitoring, or workfare?," International Tax and Public Finance, Springer, vol. 13(5), pages 565-585, September. [Downloadable!] (restricted)
    Other versions:
  3. Volker Meier, 2002. "Workfare in an Efficiency Wage Model," CESifo Working Paper Series CESifo Working Paper No. , CESifo Group Munich. [Downloadable!]
    Other versions:
  4. Dye, Ronald A. & Antle, Rick, 1986. "Cost-minimizing welfare programs," Journal of Public Economics, Elsevier, vol. 30(2), pages 259-265, July. [Downloadable!] (restricted)
  5. Katherine Cuff, 2000. "Optimality of workfare with heterogeneous preferences," Canadian Journal of Economics, Canadian Economics Association, vol. 33(1), pages 149-174, February. [Downloadable!] (restricted)
    Other versions:
  6. Chambers, Robert G., 1989. "Workfare or welfare?," Journal of Public Economics, Elsevier, vol. 40(1), pages 79-97, October. [Downloadable!] (restricted)
  7. Robert Moffitt, 1999. "Explaining Welfare Reform: Public Choice and the Labor Market," International Tax and Public Finance, Springer, vol. 6(3), pages 289-315, August. [Downloadable!] (restricted)
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  8. Robert Moffitt, 2002. "The Temporary Assistance for Needy Families Program," NBER Working Papers 8749, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  9. Rebecca M. Blank, 2002. "Evaluating Welfare Reform in the United States," Journal of Economic Literature, American Economic Association, vol. 40(4), pages 1105-1166, December.
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  10. Blackorby, Charles & Donaldson, David, 1988. "Cash versus Kind, Self-selection, and Efficient Transfers," American Economic Review, American Economic Association, vol. 78(4), pages 691-700, September. [Downloadable!] (restricted)
  11. Brett, Craig, 1998. "Who Should Be on Workfare? The Use of Work Requirements as Part of an Optimal Tax Mix," Oxford Economic Papers, Oxford University Press, vol. 50(4), pages 607-22, October.
  12. Ronnie Schoeb, 2003. "Workfare and Trade Unions: Labor Market Repercussions of Welfare Reform," CESifo Working Paper Series CESifo Working Paper No. , CESifo Group Munich. [Downloadable!]
  13. Besley, Timothy & Coate, Stephen, 1992. "Workfare versus Welfare Incentive Arguments for Work Requirements in Poverty-Alleviation Programs," American Economic Review, American Economic Association, vol. 82(1), pages 249-61, March. [Downloadable!] (restricted)
  14. Besley, Timothy & Coate, Stephen, 1995. "The Design of Income Maintenance Programmes," Review of Economic Studies, Blackwell Publishing, vol. 62(2), pages 187-221, April. [Downloadable!] (restricted)
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  15. Robert Haveman & Barbara Wolfe, 2000. "Welfare to Work in the U.S.: A Model for Other Developed Nations?," International Tax and Public Finance, Springer, vol. 7(1), pages 95-114, February. [Downloadable!] (restricted)
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Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Torben M. Andersen & Michael Svarer, 2008. "The role of workfare in striking a balance between incentives and insurance in the labour market," Economics Working Papers 2008-05, School of Economics and Management, University of Aarhus. [Downloadable!]
    Other versions:
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