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Welfare Work Requirements with Paternalistic Government Preferences

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  • Robert Moffitt

Abstract

Work requirements in means-tested transfer programs have grown in importance in the U.S. 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 maximized. Here we consider a case where society is paternalistic and instead has preferences over the actual work allocations of welfare recipients. With this social welfare function, optimality of work requirements is possible but depends on the accuracy of the screening mechanism which assigns work requirements to some benefit recipients and not others. Numerical simulations show that the accuracy must be high for such optimality to occur. The simulations also show that earnings subsidies can be justified with the type of social welfare function used here.

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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 12366.

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Date of creation: Jul 2006
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Publication status: published as Robert Moffitt, 2006. "Welfare work Requirements with Paternalistic Government Preferences," Economic Journal, Royal Economic Society, vol. 116(515), pages F441-F458, November.
Handle: RePEc:nbr:nberwo:12366

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Cited by:
  1. John Hatfield & Fuhito Kojima & Yusuke Narita, 2012. "Promoting School Competition Through School Choice: A Market Design Approach," Discussion Papers, Stanford Institute for Economic Policy Research 12-019, Stanford Institute for Economic Policy Research.
  2. 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.
  3. 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.
  4. Behncke, Stefanie & Frölich, Markus & Lechner, Michael, 2007. "Targeting Labour Market Programmes - Results from A Randomised Experiment," CEPR Discussion Papers, C.E.P.R. Discussion Papers 6537, C.E.P.R. Discussion Papers.
  5. Ruggero Paladini, 2014. "Da Bentham alla tassazione ottimale," Public Finance Research Papers, Istituto di Economia e Finanza, DIGEF, Sapienza University of Rome 2, Istituto di Economia e Finanza, DIGEF, Sapienza University of Rome.
  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, University of Gothenburg, Department of Economics 576, University of Gothenburg, Department of Economics.
  7. Brett, Craig & Jacquet, Laurence, 2011. "Workforce or Workfare?," Discussion Paper Series in Economics, Department of Economics, Norwegian School of Economics 8/2011, Department of Economics, Norwegian School of Economics.
  8. Tomer Blumkin & Yoram Margalioth & Efraim Sadka, 2013. "The desirability of workfare in the presence of misreporting," International Tax and Public Finance, Springer, Springer, vol. 20(1), pages 71-88, February.
  9. Alexander M. Gelber, 2010. "Taxes and Time Allocation: Evidence from Single Women," 2010 Meeting Papers, Society for Economic Dynamics 1031, Society for Economic Dynamics.

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