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Do social welfare programs generally reduce the incentive to work?

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Per the Congressional Budget Office, social welfare programs "create an incentive for some people to work less" by (1) providing benefits that decline with rising income, "thus making work less attractive"; (2) allowing "some people to maintain the same standard of living while working less"; and (3) increasing taxes, which "will ultimately induce some workers to supply less labor." Likewise, Lawrence Summers, Obama's former chief economist, stated that government assistance programs provide "an incentive, and the means, not to work."

DocumentationCongressional Budget OfficeLawrence Summers



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