Do Generous Welfare Benefits Lead To High Unemployment? (Long Version)

(This was originally written as a college essay. For this reason it is 3,000 words long and contains a lot of economics terms references. It is meant as a help for anyone who wants an in-depth study of the topic with supporting facts and figures. For a short version in plain English see here. The essay was marked the best in my class of 80 students. It won the Undergraduate Award 2012 in Economics along with someone from Yale. I’m not trying to boast but I’m over the moon.) Abstract This paper discusses the conventional wisdom that unemployment benefits create a disincentive to work, the so-called “welfare trap”. It examines if higher benefit levels or longer benefit durations lead to higher unemployment … Continue reading “Do Generous Welfare Benefits Lead To High Unemployment? (Long Version)”

September 12, 2012EconomicsBenefits, Disincentive To Work, Dole, Economics, Incentive, Lazy, Motivated, Social Welfare, Undergraduate Award, Unemployment, Welfare, Welfare Trap, Winner Leave a comment

The Mythical Laffer Curve

Conservatives everywhere condemn the use of tax increases for fear of the Laffer Curve. This is the idea that if taxes are too high, people will lose the incentive to work and therefore revenue will actually decrease. It is most famous for its counter-intuitive argument that a tax cut could increase revenue. Unfortunately there is little or no evidence to support this claim. History clearly shows that cutting taxes does not increase revenue. The Laffer curve is a political idea used to justify tax cuts for the rich. It is not based on sound economics. Most economists know the Laffer Curve isn’t true. An IGM survey of economists found that not a single one of them agreed that a tax … Continue reading “The Mythical Laffer Curve”

September 7, 2012The othersDemocrats, Disincentive To Work, Economic Theory, Economics, Economy, Election 2012, Entrepreneurs, Free Market, Incentive, Laffer Curve, Myth, Obama, Opinion, Politics, Punish Job Creators, Reaganomics, Republicans, Supply Side, taxes, Taxes Penalise Rich, Taxes Too High, Wrong Leave a comment