Incentive Effects of Some Pure and Mixed Transfer Systems.

Michael C. Barth, David H. Greenberg

Expert InsightsPublished 1969

An attempt to demonstrate that a wage subsidy (WS), when combined with some other income maintenance program, may have just as adverse an impact upon work incentives as a negative income tax (NIT). An analysis is presented which concentrates on a mixed wage subsidy-public assistance program compared with an NIT. A "pure" WS (not augmented by other forms of income maintenance) is also compared with an NIT. The static incentive effects of the three alternative programs, in the form of substitution effects and income effects, are compared. Except for a few extraordinary families, a pure WS appears to be less leisure-inducing than an NIT. But when the WS is supplemented by other forms of income maintenance, such as public assistance, its relative advantage may be neutralized. While it is very possible that an applied WS would be superior in its incentive effects to an NIT, it need not be. 30 pp.

Document Details

  • Copyright: RAND Corporation
  • Availability: Web Only
  • Year: 1969
  • Pages: 30
  • Document Number: P-4266

Citation

Chicago Manual of Style

Barth, Michael C. and David H. Greenberg, Incentive Effects of Some Pure and Mixed Transfer Systems. Santa Monica, CA: RAND Corporation, 1969. https://www.rand.org/pubs/papers/P4266.html.
BibTeX RIS

This publication is part of the RAND paper series. The paper series was a product of RAND from 1948 to 2003 that captured speeches, memorials, and derivative research, usually prepared on authors' own time and meant to be the scholarly or scientific contribution of individual authors to their professional fields. Papers were less formal than reports and did not require rigorous peer review.

This document and trademark(s) contained herein are protected by law. This representation of RAND intellectual property is provided for noncommercial use only. Unauthorized posting of this publication online is prohibited; linking directly to this product page is encouraged. Permission is required from RAND to reproduce, or reuse in another form, any of its research documents for commercial purposes. For information on reprint and reuse permissions, please visit www.rand.org/pubs/permissions.

RAND is a nonprofit institution that helps improve policy and decisionmaking through research and analysis. RAND's publications do not necessarily reflect the opinions of its research clients and sponsors.