Autori
Micklewright, John
Dustmann, Christian

Titolo
Benefits, incentives and uncertainty
Periodico
European University Institute of Badia Fiesolana (Fi). Department of Economics - Working papers
Anno: 1991 - Fascicolo: 55 - Pagina iniziale: 1 - Pagina finale: 20

We consider the treatment of uncertainty in models of the effects of benefits on incentives to work. We review literature in which benefit entitlement and labour market prospects are treated as uncertain. We then further illustrate the issues when we present a two-period model of the participation decision of a woman married to an unemployed man who receives benefit which is meanstested on his wife's income. Allowing for the possibly temporary nature of the husband's unemployment and the uncertainty in the wife's future job prospects we demonstrate how participation of the wife can be explained despite an implicit 100% marginal rate of tax applied to her income, something that cannot be explained in a static model.



Testo completo: http://hdl.handle.net/1814/394

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