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ERIC Number: ED139849
Record Type: Non-Journal
Publication Date: 1977-Feb
Reference Count: N/A
The General Equilibrium Impact of Alternative Antipoverty Strategies: Income Maintenance, Training and Job Creation. Discussion Papers 386-77.
Bishop, John H.
This paper attempts to provide a general equilibrium framework for comparing the merits of alternative methods of raising the income of the employable poor. The strategy is to specify a complete and interacting set of factor markets, parameterize alternative program types in a manner convenient to this specification, and then solve the system of equations that characterize this economy for the comparative static response to the initiation of a small version of each program type. Within the income maintenance category the rankings implicit in impact effect analysis recur when general equilibrium effects are considered. Wage subsidies are more transfer-efficient than the negative income tax, or earning supplements. The size of policy multipliers are, however, quite sensitive to elasticities of substitution in production. The general equilibrium impact of targeted employment and training programs is quite different from the impact effect. Expanding the employment of the skilled lowers the income of the less skilled, especially when elasticities of substitution and occupational choice are low. In general, equilibrium effects of transferring workers from the low to the high skilled work force imply that education and training are by far the most effective means of aiding the low skilled. (Author/AM)
Publication Type: Reports - Research
Education Level: N/A
Sponsor: Employment and Training Administration (DOL), Washington, DC.
Authoring Institution: Wisconsin Univ., Madison. Inst. for Research on Poverty.