Blumḳin, Tomer; Pinhas, Haim; Zultan, Ro'i - 2017 - This version: May 31, 2017
Wage subsidies can be provided directly to the worker, as in the federal Earned Income Tax Credit (EITC) program. They can also be provided indirectly by subsidizing the employer; by reducing the cost of labor, employers are induced to offer higher wages. The standard literature stipulates that...