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Changes in Household Size and Composition due to Financial Incentives


  • Douglas A. Wolf


Tax and transfer programs inevitably create incentives relating to the size and composition of households. Examples of such incentives are the "marriage penalty," dependents exemptions, and the eligibility rules for categorical welfare programs. This paper notes that changes in transfer program parameters may encourage recipient households to "import" nonwage-earning individuals, especially children, and to "export" wage earners. Several hypotheses regarding the nature of such responses are derived and supporting evidence is obtained using data from three experimental income-maintenance programs.

Suggested Citation

  • Douglas A. Wolf, 1984. "Changes in Household Size and Composition due to Financial Incentives," Journal of Human Resources, University of Wisconsin Press, vol. 19(1), pages 87-103.
  • Handle: RePEc:uwp:jhriss:v:19:y:1984:i:1:p:87-103

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    References listed on IDEAS

    1. Bloch, Farrell, 1994. "Antidiscrimination Law and Minority Employment," University of Chicago Press Economics Books, University of Chicago Press, edition 0, number 9780226059839.
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    5. Blau, David M, 1994. "Labor Force Dynamics of Older Men," Econometrica, Econometric Society, vol. 62(1), pages 117-156, January.
    6. Kuhn, Peter J, 1990. "Sex Discrimination in Labor Markets: The Role of Statistical Evidence: Reply," American Economic Review, American Economic Association, vol. 80(1), pages 290-297, March.
    7. Hurd, Michael D, 1990. "Research on the Elderly: Economic Status, Retirement, and Consumption and Saving," Journal of Economic Literature, American Economic Association, vol. 28(2), pages 565-637, June.
    8. Joseph F. Quinn & Richard V. Burkhauser & Daniel A. Myers, 1990. "Passing the Torch: The Influence of Economic Incentives on Work and Retirement," Books from Upjohn Press, W.E. Upjohn Institute for Employment Research, number pt, November.
    9. Hellerstein, Judith K & Neumark, David & Troske, Kenneth R, 1999. "Wages, Productivity, and Worker Characteristics: Evidence from Plant-Level Production Functions and Wage Equations," Journal of Labor Economics, University of Chicago Press, vol. 17(3), pages 409-446, July.
    10. Robert M. Hutchens, 1988. "Do Job Opportunities Decline with Age?," ILR Review, Cornell University, ILR School, vol. 42(1), pages 89-99, October.
    11. Lazear, Edward P, 1979. "Why Is There Mandatory Retirement?," Journal of Political Economy, University of Chicago Press, vol. 87(6), pages 1261-1284, December.
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    Cited by:

    1. Smith, Mark W., 1999. "The impact of state welfare policies on women's cohabitation," MPRA Paper 19288, University Library of Munich, Germany.

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