TY  - JOUR
AU  - Moffitt,Robert
TI  - Welfare Work Requirements with Paternalistic Government Preferences
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 12366
PY  - 2006
Y2  - July 2006
UR  - http://www.nber.org/papers/w12366
L1  - http://www.nber.org/papers/w12366.pdf
N1  - Author contact info:
Robert A. Moffitt
Department of Economics
Johns Hopkins University
3400 North Charles Street
Baltimore, MD  21218
Tel: 410/516-7611
Fax: 410/516-7600
E-Mail: moffitt@jhu.edu
M2  - featured in NBER digest on 2006-07-24
AB  - Work requirements in means-tested transfer programs have grown in importance in the U.S. and in some other countries. The theoretical literature which considers their possible optimality generally operates within a traditional welfarist framework where some function of the utility of the poor is maximized. Here we consider a case where society is paternalistic and instead has preferences over the actual work allocations of welfare recipients. With this social welfare function, optimality of work requirements is possible but depends on the accuracy of the screening mechanism which assigns work requirements to some benefit recipients and not others. Numerical simulations show that the accuracy must be high for such optimality to occur. The simulations also show that earnings subsidies can be justified with the type of social welfare function used here.
ER  -