Asset limits in means-tested transfers can allow for the distribution of scarce aid to families most need but may disincentivize beneficiaries build savings necessary weather economic shocks. In this Economic Commentary, we examine net worth means-tested-transfer recipients along income and review literature on matter with a discussion universal basic (UBI) as policy alternative. Using 2018 pan...

Our aim in this paper is to resolve a paradox. Since the 1970s, there has been a downward secular trend in the average real and relative earnings of young adults under the age of 35. Despite the fact that most young children live in households headed by adults under 35, there has been no corresponding secular rise in the incidence of low income among children. Rather child poverty has followed ...

Reducing insecurity: The principal objective of income transfers? Tax treatment of families in modern industrial countries: The role of the NIT

Redistributive policies often sustain inefficient economic sectors. Economists routinely argue that governments should let the sectors collapse, and compensate the affected agents. We explain why governments may instead prefer the inefficient redistribution. If income shocks in a given sector are more correlated than in the rest of the economy, and redistribution is related to individuals’ inco...

Merchant fees and reward programs generate an implicit monetary transfer from “cash” users to credit card users because merchants generally do not set differential prices for card users to recoup the costs of merchant fees. On average, each cash-using household transfers $50 to households that use credit cards, and each credit card using household receives a subsidy of $240 every year. Among ca...

Recent empirical work finds evidence of highly nonlinear wealth dynamics among Boran pastoralists of southern Ethiopia, consistent with the hypothesis of poverty traps. This paper explores the consequences of such dynamics for informal inter-household transfers. Using original primary data on social networks and transfers, we find that asset transfers respond to recipients’ losses, but only so ...

This paper analyzes the effect of a change in lump-sum (private) income on the tax and expenditure decisions of a government constrained by taxpayers’ behavioral responses to the tax policy. Lump-sum changes of private income are generally characterized as pure income effects on taxpayers’ behavior, and usually considered in public finance theory as imposing no price effects on the economy. In ...