Workfare, monitoring, and efficiency wages

Christian Holzner, Volker Meier and Martin Werding

Journal of Macroeconomics, 2010, vol. 32, issue 1, 157-168

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 as well as the monitoring intensity. 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)
Date: 2010
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Citations: View citations in EconPapers (3)

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Related works:
Working Paper: Workfare, monitoring, and efficiency wages (2010)
Working Paper: Workfare, Monitoring, and Efficiency Wages (2006)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:jmacro:v:32:y:2010:i:1:p:157-168

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