Optimality Of Workfare With Heterogeneous Preferences

Katherine Cuff

No 968, Working Paper from Economics Department, Queen's University

Abstract: Using the standard nonlinear income taxation framework with heterogeneity of preferences, this paper examines the optimality of workfare as a screening tool. It is assumed that workfare does not serve as a human capital investment, participation is mandatory, and administrative costs are negligible. Imposing alternative cardinalizations on individuals utilities, allows for the possibility that the government optimally redistributes income to or from high disutility of labour individuals. Under either case, workfare is never optimal to impose on these individuals. It is also shown that non-productive workfare can be an efficient policy tool, in contrast to the results found in Besley and Coate (1995), Brett (1997), and Beaudry and Blackorby (1997).

Keywords: Nonlinear income taxation; Workfare (search for similar items in EconPapers)
JEL-codes: H21 H23 (search for similar items in EconPapers)
Pages: 33 pages
Date: 1998-02
References: Add references at CitEc
Citations: View citations in EconPapers (12)

Downloads: (external link)
https://www.econ.queensu.ca/sites/econ.queensu.ca/files/qed_wp_968.pdf First version 1998 (application/pdf)

Related works:
Journal Article: Optimality of workfare with heterogeneous preferences (2000)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:qed:wpaper:968

Access Statistics for this paper

More papers in Working Paper from Economics Department, Queen's University Contact information at EDIRC.
Bibliographic data for series maintained by Mark Babcock ().