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Welfare versus work under a negative income tax: Evidence from the Gary, Seattle, Denver and Manitoba income maintenance experiments

Chris Riddell and William Craig Riddell
Authors registered in the RePEc Author Service: W. Craig Riddell ()

No 36, CLEF Working Paper Series from Canadian Labour Economics Forum (CLEF), University of Waterloo

Abstract: The Income Maintenance Experiments have received renewed attention due to growing international interest in a Basic Income. Proponents viewed a Negative Income Tax as a replacement for traditional welfare with stronger work incentives and reduced poverty. However, existing labor supply estimates for single parents are uniformly negative. We reassess the experimental evidence and find randomization failure in two NITs (Gary and Seattle). In Denver and Manitoba, we find a positive labor supply response for those on welfare prior to random assignment. Our results provide strong evidence that a NIT can increase work activity among single parents on welfare.

JEL-codes: C9 I38 J22 (search for similar items in EconPapers)
Date: 2021
New Economics Papers: this item is included in nep-exp, nep-isf and nep-lma
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:clefwp:36

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