Working Paper: NBER ID: w24385
Authors: Marc K. Chan; Robert A. Moffitt
Abstract: This paper reviews the basic theoretical models that are appropriate for analyzing different types of welfare reforms, and the related empirical literature. We first present the canonical labor supply model of a classical welfare program, and then extend this basic framework to include in-kind transfers, incomplete take-up, human capital, preference persistence, and borrowing and saving. The empirical literature on these models is presented. The negative income tax, earnings subsidies, US welfare reforms with features that differ from those in other countries, and child care reforms are then surveyed both in terms of the theoretical model and the empirical literature surrounding each.
Keywords: No keywords provided
JEL Codes: I3; J22
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| welfare programs (I38) | labor supply (J20) |
| implicit tax rates on earnings (H29) | labor supply (J20) |
| earnings subsidies (J68) | labor force participation (J22) |
| negative income tax (NIT) (H24) | labor supply (J20) |
| welfare program design (I38) | labor supply decisions (J22) |