Workfare, Monitoring, and Efficiency Wages

Christian Holzner, Volker Meier and Martin Werding

No 1749, CESifo Working Paper Series from CESifo

Abstract: The impact of a stronger work requirement for welfare recipients in a workfare program is studied in an efficiency wage model where a representative firm chooses its level of monitoring activities. A stricter workfare policy raises employment and monitoring activities. It typically increases profits and reduces the tax rate. The impact on the net wage is ambiguous. Utility levels of employed workers and welfare recipients may increase even if the net wage declines. The utility differential between these two groups of workers shrinks.

Keywords: workfare; welfare; efficiency wages; monitoring (search for similar items in EconPapers)
JEL-codes: H53 J41 J60 (search for similar items in EconPapers)
Date: 2006
New Economics Papers: this item is included in nep-lab, nep-pbe and nep-upt
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

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Related works:
Journal Article: Workfare, monitoring, and efficiency wages (2010)
Working Paper: Workfare, monitoring, and efficiency wages (2010)
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Persistent link: https://EconPapers.repec.org/RePEc:ces:ceswps:_1749

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