Lohse, Tim - In: Review of Economics 65 (2014) 1, pp. 95-118
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 determinant …