Comment On The 'Five Economists' Plan: The Original Idea and Further Developments
In this paper Peter Dawkins argues for the "wage-tax trade-off" proposed by the "Five Economists" as part of their policy package for reducing unemployment. As he explains, the trade-off involves using an earned income tax credit (EITC) scheme "as a way of increasing the incomes of low-wage earners in low-income families, rather than increases in the award wages safety net". My comments will focus on the EITC component of the package, taking as an example the Lambert (2000) scheme reported in the paper. I will also concentrate on the effects of the scheme for two-parent families.
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