Wednesday, August 03, 2011

Parents' Values and Welfare

I loved Don's response.  I also loved the self-discipline he exercised in not responding to the emailer with sarcasm and disgust.  Soon, I'll post Greg Mankiw's "10 Statements that Most Economists Agree With"  But, for now, I'll just use one: people respond to incentives.

Imagine that you and your family are out of work, out of money, and nearly out of food.  Your options are to either take a job that you would never take during less trying circumstances, or apply for food stamps.  If I were given a choice between shoveling manure or collecting food stamps...I might just have a tough decision to make.  One thing we cannot deny, or ignore, is that the existence of food stamps increases the probability that we will not accept less favorable (difficult, embarrasing, etc) employment.

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