Should we subsidize work? Welfare reform,the earned income tax credit and optimal transfers |
| |
Authors: | Gregory Acs Eric Toder |
| |
Institution: | (1) The Urban Institute, 2100 M Street NW, Washington, DC, 20037, USA |
| |
Abstract: | During the 1990s, US income transfer and tax policies shifted towards trying to encourage work among low-income families.
Optimal tax theory, however, suggests that work subsidies are usually an inefficient way to raise the incomes of poor families
unless the work effort of recipients has external benefits and/or tax payer/voters prefer redistributing income to the working
poor rather than the idle poor. This paper discusses the conditions under which work subsidies may be economically efficient
and assesses empirical evidence that suggests that welfare reform and expansions of the EITC have increased work effort among
low income families, but is inconclusive about whether the policy shift has enabled them to advance beyond entry-level jobs
or benefited their children. |
| |
Keywords: | Optimal taxes and transfers Earned income tax credit Welfare reform External benefits |
本文献已被 SpringerLink 等数据库收录! |
|