@techreport{NBERw8820,
 title = "Can Equity and Efficiency Complement Each Other?",
 author = "Rebecca M. Blank",
 institution = "National Bureau of Economic Research",
 type = "Working Paper",
 series = "Working Paper Series",
 number = "8820",
 year = "2002",
 month = "February",
 URL = "http://www.nber.org/papers/w8820",
 abstract = {Economists tend to assume that redistributive transfers increase equity but cause a loss in efficiency, the so-called 'leaky bucket' effect.  This paper explores situations where efficiency losses are small or where equity and efficiency might even complement each other.  A simple model identifies key parameters that cause leaky buckets and which policy can affect.  Three situations are discussed where the equity/efficiency tradeoff may be low:  When transfers go to populations with no capacity to change their behavior; when transfers go to programs that limit efficiency losses through behavioral requirements; and when commodities are subsidized that function as long-term investments and create future income gains.},
}