Working Paper: NBER ID: w9751
Authors: Robert A. Moffitt
Abstract: The negative income tax proposed by Milton Friedman represents one of the fundamental ideas of modern welfare policy. However, the academic literature has raised two difficulties with it, one challenging its purported work incentives and the other suggesting the possible superiority of work requirements. In addition, work requirement approaches have gained ground in actual U.S. welfare policy over the last 30 years and the number of different programs has proliferated, another development counter to the negative income tax. On the other hand, the Earned Income Tax Credit has produced a negative-income-tax-like program on a vast scale.
Keywords: No keywords provided
JEL Codes: I13
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| negative income tax (H24) | increased labor supply (J20) |
| work requirements (I38) | higher labor participation (J49) |
| earned income tax credit (H24) | influenced welfare policy and labor supply dynamics (J29) |