Income maintenance programs and multidimensional screening
AbstractThis paper examines properties of optimal poverty assistance programs under different informational environments using an income maintenance framework. To that end, we make both the income generating ability and the disutility of labor of individuals unobservable, and compare the resulting benefit schedules with those of programs found in the United States since Welfare Reform (1996). We find that optimal programs closely resemble a Negative Income Tax with a Benefit Reduction rate that depends on the distribution of population characteristics. A policy of workfare (unpaid public sector work) is inefficient when disutility of labor is unobservable, but minimum work requirements (for paid work) may be used in that same environment. The distortions to work incentives and the presence of minimum work requirements depend on the observability and relative importance of the population's characteristics.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by Department of Economics and Business, Universitat Pompeu Fabra in its series Economics Working Papers with number 544.
Date of creation: Apr 2001
Date of revision:
Contact details of provider:
Web page: http://www.econ.upf.edu/
Welfare programs; optimal taxation; multidimensional screening;
Find related papers by JEL classification:
- D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
- H21 - Public Economics - - Taxation, Subsidies, and Revenue - - - Efficiency; Optimal Taxation
- H53 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Welfare Programs
This paper has been announced in the following NEP Reports:
- NEP-ALL-2001-05-16 (All new papers)
You can help add them by filling out this form.
CitEc Project, subscribe to its RSS feed for this item.
- Philippe De Donder & Jean Hindriks, 2007.
"Equilibrium social insurance with policy-motivated parties,"
13446, Institut National de la Recherche Agronomique, France.
- De Donder, Philippe & Hindriks, Jean, 2007. "Equilibrium social insurance with policy-motivated parties," European Journal of Political Economy, Elsevier, vol. 23(3), pages 624-640, September.
- Philippe, DE DONDER & Jean, HINDRIKS, 2006. "Equilibrium Social Insurance with Policy-Motivated Parties," Discussion Papers (ECON - DÃ©partement des Sciences Economiques), UniversitÃ© catholique de Louvain, DÃ©partement des Sciences Economiques 2006018, UniversitÃ© catholique de Louvain, DÃ©partement des Sciences Economiques.
- DE DONDER, Philippe & HINDRIKS, Jean, 2006. "Equilibrium social insurance with policy-motivated parties," CORE Discussion Papers, UniversitÃ© catholique de Louvain, Center for Operations Research and Econometrics (CORE) 2006033, UniversitÃ© catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- Josepa Miquel-Florensa, 2010. "â€œTell me what you needâ€: signaling with limited resources," Journal of Economics, Springer, Springer, vol. 99(1), pages 1-28, February.
- De Donder, Philippe & Hindriks, Jean, 2003.
"Policy-Oriented Parties and the Choice between Social and Private Insurance,"
IDEI Working Papers
226, Institut d'Économie Industrielle (IDEI), Toulouse.
- De Donder, Philippe & Hindricks, Jean, 2005. "Policy-oriented Parties and the Choice Between Social and Private Insurance," CEPR Discussion Papers 4864, C.E.P.R. Discussion Papers.
- DE DONDER, Philippe & HINDRIKS, Jean, 2003. "Policy-oriented parties and the choice between social and private insurance," CORE Discussion Papers, UniversitÃ© catholique de Louvain, Center for Operations Research and Econometrics (CORE) 2003064, UniversitÃ© catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- Craig Brett & John A. Weymark, 2000.
"Financing Education Using Optimal Redistributive Taxation,"
Vanderbilt University Department of Economics Working Papers
0038, Vanderbilt University Department of Economics, revised May 2001.
- Brett, Craig & Weymark, John A., 2003. "Financing education using optimal redistributive taxation," Journal of Public Economics, Elsevier, vol. 87(11), pages 2549-2569, October.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ().
If references are entirely missing, you can add them using this form.