Doing Well by Doing Good : A Market for Favors

Recipients of government transfers are presently discouraged from gainful employment to avoid drastic benefit reductions. This enforced idleness promotes welfare dependency and reduces the employability of transfer recipients. An easier transition between the transfer economy and the money economy is possible if transfer recipients are allowed to work for formal "favor credits" instead of money without any benefit reductions. These favor credits would be used to buy products made by transfer recipients for themselves and other low-income users. Since only some inputs need be purchased with money, a small amount of seed money can generate many favor-credit jobs