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Welfare Work Requirements with Paternalistic Government Preferences

Robert Moffitt

Economics Working Paper Archive from The Johns Hopkins University,Department of Economics

Abstract: Work requirements in means-tested transfer programs have grown in importance in the U.S. and in some other countries. The theoretical literature which considers their possible optimality generally operates within a traditional welfarist framework where some function of the utility of the poor is maximized. Here we consider a case where society is paternalistic and instead has preferences over the actual work allocations of welfare recipients. With this social welfare function, optimality of work requirements is possible but depends on the accuracy of the screening mechanism which assigns work requirements to some benefit recipients and not others. Numerical simulations show that the accuracy must be high for such optimality to occur. The simulations also show that earnings subsidies can be justified with the type of social welfare function used here.

Date: 2005-06, Revised 2006-06
New Economics Papers: this item is included in nep-ltv
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Citations: View citations in EconPapers (33)

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Journal Article: Welfare work Requirements with Paternalistic Government Preferences (2006)
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