The Redistributive Impact of Cash Transfers

Abstract

The redistributive effects of public transfers have usually been measured by comparing incomes before and after transfer benefits are counted, but ignoring labor supply reductions induced by such benefits. This study uses a simulation approach to estimate for nonaged families the decline in work hours and earnings in 1967 and 1974 due to major U.S. cash transfers. The net redistributive effect of these programs is also measured.

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