Chapter 19

Transfer Payments and Private Information

Abstract

Chapter 19 presents a selection of topics on the provision of transfers to the poor in a second best environment. It begins with a comparison of broad-based versus targeted approaches to transfers and then considers a number of issues that are motivated by the existence of asymmetric or private information. Highlighted are the Blackorby and Donaldson analysis of the provision of health care and two articles by Besley and Coate, one on workfare and the other on welfare stigma.

Keywords

Broad-based transfer payments; Credit income tax; Earned income tax credit (EITC); Samaritan's dilemma; Statistical discrimination; Targeted transfer payments; Universality; Welfare stigma; Workfare

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