Rethinking the Welfare State
Abstract/Contents
- Abstract
- The U.S. spends non trivially on non-medical transfers for its working-age population in a wide range of programs that support low and middle-income households. How valuable are these programs for U.S. households? Are there simpler, welfare-improving ways to transfer resources that are supported by a majority? What are the macroeconomic effects of such alternatives? We answer these questions in an equilibrium, life-cycle model with single and married households who face idiosyncratic productivity risk, in the presence of costly children and potential skill losses of females associated with non-participation. Our findings show that a potential revenue-neutral elimination of the welfare state generates large welfare losses in the aggregate. Yet, most households support eliminating current transfers since losses are concentrated among a small group. We find that a Universal Basic Income program does not improve upon the current system. If instead per-person transfers are implemented alongside a proportional tax, a Negative Income Tax experiment, there are transfer levels and associated tax rates that improve upon the current system. Providing per-person transfers to all households is quite costly, and reducing tax distortions helps to provide for additional resources to expand redistribution.
Description
| Type of resource | text |
|---|---|
| Date created | August 17, 2021 |
Creators/Contributors
| Author | Guner, Nezih |
|---|---|
| Author | Kaygusuz, Remzi |
| Author | Ventura , Gustavo |
| Organizer of meeting | Auclert, Adrien |
| Organizer of meeting | Mitman, Kurt |
| Organizer of meeting | Tonetti, Christopher |
| Organizer of meeting | Wong, Arlene |
Subjects
| Subject | taxes and transfers |
|---|---|
| Subject | household labor supply |
| Subject | income risk |
| Subject | negative income tax |
| Genre | Text |
| Genre | Working paper |
| Genre | Grey literature |
Bibliographic information
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- User agrees that, where applicable, content will not be used to identify or to otherwise infringe the privacy or confidentiality rights of individuals. Content distributed via the Stanford Digital Repository may be subject to additional license and use restrictions applied by the depositor.
- License
- This work is licensed under a Creative Commons Attribution 4.0 International license (CC BY).
Preferred citation
- Preferred citation
- Guner, N., Kaygusuz, R., and Ventura , G. (2022). Rethinking the Welfare State. Stanford Digital Repository. Available at https://purl.stanford.edu/sb318dg0589
Collection
SITE Conference 2021
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- siteworkshop@stanford.edu
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