Income Guarantees and the Working Poor

The Effect of Income Maintenance Programs on the Hours of Work of Male Family Heads

by David H. Greenberg, Marvin H. Kosters

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Analyzes economic effects of alternative income maintenance programs, considering male recipients' work or leisure choices. Labor supply parameters were estimated by regression techniques from annual hours worked in 1967 by about 6000 male household heads under 62 with varying levels of wage and nonemployment income. About 2.3 million such families would probably participate in the Nixon Family Assistance Program, receiving $4 billion annually in cash and food stamps. About 62 percent would go to whites; 36 percent to Negroes; over 2/3 to families of 6 or more; 1/3 to inner cities; 1/3 to rural areas; more than half to families with preprogram incomes over $4000. Participating family heads' work would decrease by 19 percent (worth $1.4 billion) — one half of one percent of hours worked by the entire labor force — so family income would increase by $2.6 billion net. All effects are highly sensitive to tax rates and the generosity of the plan adopted.

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