Watts, Harold W.; Lampman, Robert J.
June 1968
Journal of Human Resources;Summer68, Vol. 3 Issue 3, p276
Academic Journal
This article introduces a series of papers on income redistribution and the labor supply in the U.S. Income redistribution is an important element in the elimination of poverty. Related schemes such as the negative income tax, guaranteed annual income, children's or family allowances, demogrants and many others are being evaluated in efforts to identify strategies that would cover all low-income households, specifically including the percentage of the poverty population not receiving public assistance. Such a radical extension of redistributive impact raises important questions about the effect of affected households on the labor supply. This concern is reinforced by a growing recognition that existing programs for maintaining incomes are very poorly structured for encouraging the efforts of beneficiaries to support themselves. The cost of redistribution in terms of total output via the labor supply response is an important element to consider in choosing an acceptable goal for income distribution. Before deciding how much to weaken the relation between productive effort and disposable income for the active members of the labor force, it seems imperative to know how a given change will affect their work decisions.


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