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Title:Workfare, monitoring, and efficiency wages PDF Logo
Authors:Holzner, Christian
Meier, Volker
Werding, Martin
Issue Date:2006
Series/Report no.:CESifo working paper 1749
Abstract: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.
JEL:H53
J41
J60
Document Type:Working Paper
Appears in Collections:CESifo Working Papers, CESifo Group Munich

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