Cover: Negative Income Taxation and Labor Supply: New Evidence from the New  Jersey-Pennsylvania Experiment.

Negative Income Taxation and Labor Supply: New Evidence from the New Jersey-Pennsylvania Experiment.

Published 1978

by John F. Cogan

Purchase Print Copy

 Format Price
Add to Cart Paperback57 pages $20.00

Reanalyzes the New Jersey-Pennsylvania Negative Income Tax Experiment and finds a large, statistically significant labor supply withdrawal of white male heads of household. Estimates are markedly higher than in previous analyses for the same group and suggest the President's welfare reform package costs are seriously underestimated. Methodological differences are that participating eligible families are distinguished from nonparticipating eligible families and that this empirical model explicitly controls for state welfare programs for intact households. This experimental labor supply response does not necessarily indicate the size of response to an economy-wide program. The estimates may be unique to the New Jersey-Pennsylvania accounting system, and the response in a permanent program may be quite different from that in a three year experiment. Even so, the small responses estimated earlier shaped policymakers' views about costs and this analysis indicates true costs will probably be much higher. 57 pp. Bibliog.

This report is part of the RAND report series. The report was a product of RAND from 1948 to 1993 that represented the principal publication documenting and transmitting RAND's major research findings and final research.

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

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.