Optimal Participation Income and Negative Income Tax in Poverty Alleviation Programs

Diego Lanzi and Flavio Delbono

Working Papers from Dipartimento Scienze Economiche, Universita' di Bologna

Abstract: We compare two different redistributive policies specifically designed to alleviate poverty. The first one is inspired to the idea of participation income, the second focused on the introduction of a negative income tax. Briefly characterizing an economy with workers and non-workers and using income as evaluation space for poverty, we determine optimality conditions of both measures under a flat rate labor income tax. Finally, we emphasize a necessary condition for these measures to mitigate poverty.

Date: 2002
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Persistent link: https://EconPapers.repec.org/RePEc:bol:bodewp:451

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