Cost-minimizing welfare programs

Ronald A. Dye; Rick Antle

doi:10.1016/0047-2727(86)90049-6

Cost-minimizing welfare programs

Ronald A. Dye^*, Rick Antle

^*Corresponding author for this work

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8 Scopus citations

Abstract

We study opportunities for lowering the cost of welfare programs by exploiting heterogeneity in the unobservable tastes of welfare recipients. Relying on the inability of cash-based programs to achieve self-selection, we provide circumstances in which it is optimal to provide payments-in- kind. Our model differs from other self-selection models because we allow the recipients the opportunity to trade the subsequent to the receipt of their welfare packages. The presence of unreported cash among the recipient population is considered.

Original language	English (US)
Pages (from-to)	259-265
Number of pages	7
Journal	Journal of Public Economics
Volume	30
Issue number	2
DOIs	https://doi.org/10.1016/0047-2727(86)90049-6
State	Published - Jul 1986

ASJC Scopus subject areas

Finance
Economics and Econometrics

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10.1016/0047-2727(86)90049-6

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title = "Cost-minimizing welfare programs",

abstract = "We study opportunities for lowering the cost of welfare programs by exploiting heterogeneity in the unobservable tastes of welfare recipients. Relying on the inability of cash-based programs to achieve self-selection, we provide circumstances in which it is optimal to provide payments-in- kind. Our model differs from other self-selection models because we allow the recipients the opportunity to trade the subsequent to the receipt of their welfare packages. The presence of unreported cash among the recipient population is considered.",

author = "Dye, {Ronald A.} and Rick Antle",

note = "Funding Information: *The comments of Katherine Schipper, Oliver Williamson and an anonymous referee are gratefully acknowledged, as is the financial support of the Institute of Professional Accounting at the University of Chicago. {\textquoteleft}This type of thinking underlies part of the argument for negative income taxes [see Anderson (1978)].",

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AU - Dye, Ronald A.

AU - Antle, Rick

N1 - Funding Information: *The comments of Katherine Schipper, Oliver Williamson and an anonymous referee are gratefully acknowledged, as is the financial support of the Institute of Professional Accounting at the University of Chicago. ‘This type of thinking underlies part of the argument for negative income taxes [see Anderson (1978)].

PY - 1986/7

Y1 - 1986/7

N2 - We study opportunities for lowering the cost of welfare programs by exploiting heterogeneity in the unobservable tastes of welfare recipients. Relying on the inability of cash-based programs to achieve self-selection, we provide circumstances in which it is optimal to provide payments-in- kind. Our model differs from other self-selection models because we allow the recipients the opportunity to trade the subsequent to the receipt of their welfare packages. The presence of unreported cash among the recipient population is considered.

AB - We study opportunities for lowering the cost of welfare programs by exploiting heterogeneity in the unobservable tastes of welfare recipients. Relying on the inability of cash-based programs to achieve self-selection, we provide circumstances in which it is optimal to provide payments-in- kind. Our model differs from other self-selection models because we allow the recipients the opportunity to trade the subsequent to the receipt of their welfare packages. The presence of unreported cash among the recipient population is considered.

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Cost-minimizing welfare programs

Abstract

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