Tax effects on job search, training, and work effort

Kesselman, Jonathan R.

doi:10.1016/0047-2727(76)90006-2

Cited by 16 publications

(9 citation statements)

References 10 publications

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“…1 The principal exception is Miller and Saunders (1997) who examine the impact of state-level generosity of welfare on high school completion. Kesselman (1976) makes the point that, for those expecting to remain on public assistance, welfare reduces the incentive to invest in education. 2 See Moffitt (2002) for a survey of the literature on welfare programs and labor supply.…”

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confidence: 99%

The pitfalls of work requirements in welfare-to-work policies: Experimental evidence on human capital accumulation in the Self-Sufficiency Project

Riddell

2014

Journal of Public Economics

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. www.econstor.eu This paper investigates whether policies that encourage recipients to exit welfare for full-time employment influence participation in educational activity. The Self-Sufficiency Project ('SSP') was a demonstration project where long-term welfare recipients randomly assigned to the treatment group were offered a generous earnings supplement if they exited welfare for full-time employment. We find that treatment group members were less likely to upgrade their education along all dimensions: high-school completion, enrolling in a community college or trade school, and enrolling in university. Thus, 'work-first'; policies that encourage full-time employment may reduce educational activity and may have adverse consequences on the long-run earnings capacity of welfare recipients. We also find that there was a substantial amount of educational upgrading in this population. For instance, among high-school dropouts at the baseline, 19% completed their diploma by the end of the demonstration. Finally, we simulate the consequences of the earnings supplement in the absence of adverse effects on educational upgrading. Doing so alters the interpretation of the lessons from the SSP demonstration. Terms of use: Documents in D I S C U S S I O N P A P E R S E R I E SJEL Classification: I38, J08, J24

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confidence: 99%

The pitfalls of work requirements in welfare-to-work policies: Experimental evidence on human capital accumulation in the Self-Sufficiency Project

Riddell

2014

Journal of Public Economics

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“…He must simultaneously choose an optimal amount of investment in human capital and the amount of work and consump-2 Rea (1974b) extends the model to an analysis of these programs. 5 Kesselman (1976) indicated that, contrary to Garfinkel's finding, a wage subsidy may not offer a greater investment incentive than a negative income tax. 3 For a description of the us experiments see Watts ( 1971 ).…”

Section: The Modelmentioning

confidence: 91%

“…One of the assumptions 10 In a one-period context this result cannot occur if Dzz < 0 (Kesselman, 1976). One of the assumptions 10 In a one-period context this result cannot occur if Dzz < 0 (Kesselman, 1976).…”

Section: Extension Of the Modelmentioning

confidence: 99%

“…INTRODUCTION Although the impact of a negative income tax or a wage subsidy on labour supply has received a great deal of attention in the literature (see, for example, Greenberg and Kosters, 1970;Rea, 1974a;Rosen and Welch, 1971), with the exception of a recent paper by Kesselman (1976) there has been no theoretical treatment of the effects of such programs on investment in human capital.' A model is presented which integrates the theories of labour supply and investment in human capital in order to predict the responses of both to permanent and temporary income maintenance programs.…”

Section: Investment In Human Capital Under a Negative Income Tax S A mentioning

confidence: 99%

“…Kesselman (1976) analyses the programs in a one-period context. He must simultaneously choose an optimal amount of investment in human capital and the amount of work and consump-2 Rea (1974b) extends the model to an analysis of these programs.…”

Section: The Modelmentioning

confidence: 99%

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