Discussion Paper Series in Economics, Department of Economics, Norwegian School of Economics (NHH)
Workforce or Workfare?
() and Laurence Jacquet
Abstract: This article explores the use of workfare as part of an
optimal tax mix when labor supply responses are along the extensive margin.
Particular attention is paid to the interaction between workfare and an
earned income tax credit, two policies that are designed to provide
additional incentives for individuals to enter the labor force. This
article shows that, despite their common goal, these policies are often at
odds with each other.
Keywords: Extensive margin; optimal income taxation; workfare; (follow links to similar papers)
JEL-Codes: H21; (follow links to similar papers)
18 pages, April 13, 2011
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