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Sunday, March 06, 2016

'It Pays to Work: Work Incentives and the Safety Net'

Via Brad DeLong:

It Pays to Work: Work Incentives and the Safety Net: Isaac Shapiro, Robert Greenstein, Danilo Trisi, and Bryann DaSilva, CBPP: Some critics of various low-income assistance programs argue that the safety net discourages work.  In particular, they contend that people receiving assistance from these programs can receive more, or nearly as much, from not working — and receiving government aid — than from working.  Or they argue that low-paid workers have little incentive to work more hours or seek higher wages because losses in government aid will cancel out the earnings gains. 
Careful analysis of the data and research demonstrates, however, that such charges are largely incorrect and that it pays to work.  In the overwhelming majority of cases, in fact, adults in poverty are significantly better off if they get a job, work more hours, or receive a wage hike.  Various changes in the safety net over the past two decades have transformed it into more of what analysts call a “work-based safety net” and substantially increased incentives to work for people in poverty. ...

    Posted by on Sunday, March 6, 2016 at 10:30 AM in Economics, Social Insurance | Permalink  Comments (36)


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