Workfare, Monitoring, and Efficiency Wages

The impact of a stronger work requirement for welfare recipients in a workfare program is studied in an efficiency wage model where a representative firm chooses its level of monitoring activities. A stricter workfare policy raises employment and monitoring activities. It typically increases profits and reduces the tax rate. The impact on the net wage is ambiguous. Utility levels of employed workers and welfare recipients may increase even if the net wage declines. The utility differential between these two groups of workers shrinks.

• Publication year

  2010

• Venue

  Social Science Research Network

• Publication date

  2010-03-01

• Fields of study

  Economics

• Identifiers
  DOI 10.1016/J.JMACRO.2009.05.002
• External record

  Open on Semantic Scholar

• Source metadata

  Semantic Scholar

• No claims are published for this paper.

• No concepts are published for this paper.

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