Lohse, Tim - In: Review of Economics 65 (2014) 1, pp. 95-118
Abstract Opponents of work obligations in return for transfer payments argue that workfare can crowd out private sector … work, that workfare harms the welfare of the poor and thereby reduces a society’s welfare in general. This paper analyzes … these objections against workfare in a discrete optimal income tax model. Workfare productivity emerges to be the crucial …