Income maintenance schemes under wage-rate uncertainty
分析工资率不确定性如何改变劳动者对税收和补贴的反应，并探讨这对政府设计收入维持计划的影响，对研究劳动供给和福利政策的学者有参考价值。
Economists' thinking on taxation schemes and work incentives is usually founded on a set of propositions concerning the supply of labor under perfect certainty.' Insofar as labor is supplied under a regular fixed-wage contract with no risk of involuntary unemployment, this neglect of uncertainty seems reasonable. However, if one applies tax theory to income maintenance schemes for the poor, the assumption of perfect certainty could be misleading. Accordingly, we need to know whether risk on the seller's side in the labor contract significantly alters the market response to tax and subsidy schemes. If it does, then how does this affect a government's choice of design of an income maintenance scheme? In this article, I shall concentrate specifically on wage-rate uncertainty. As a preliminary, it is interesting to note the number of ways in which such uncertainty affects poor people's incomes: 1) those who are self-employed receive a random return to the weekly hours they devote to their job; 2) piecework or other productivity-related employment contracts clearly have an uncertainty component; 3) promotion and bonus schemes can have a similar effect in the life cycle of poverty. Many currently low-paid workers know that the prospect of a higher wage through career-ladder advancement may be obtained by currently working more hours or at a greater intensity. At the time that the labor supply decision is made, of course, the returns to this marginal effort are uncertain. 4) The possibility of unemployment can also be interpreted in the context of a random wagethough more care is needed here. If the hours-of-work decision is made collectively (for example, via union representation), although the going wage-rate may be known with certainty, for each individual it may be uncertain whether he will be able to find employment or not, or indeed keep his job at the going rate. Why does wage-rate uncertainty raise special problems? There are in fact a number of issues involved2 but let me anticipate the formal argument of Section I to IV by some reasoning on basic neoclassical theory. I do so in two steps. First, take the standard case of an individual with a determinate wage, where utility is a function of consumption and leisure. Increase the marginal tax rate (MTR) and his/her nonlabor income. If this is done so as to ensure exact compensation in utility terms, then obviously we isolate a conventional, pure substitution effect and labor supply is reduced. If the compensation is such that ex post consumption remains constant, then, again, labor supply is reduced as long as consumption is a superior good. If the compensation is such that ex post net tax liability remains constant, labor supply is reduced as long as leisure is a superior good. Second, take the standard pure portfolio problem. An individual is deciding how to allocate a fixed total wealth between a safe asset bearing a given rate of return, and an asset with a higher, but risky, rate of return. I assume that utility depends on disposable income, that the individual aims to maximize *London School of Economics. Research reported here was supported in part by funds granted to the Institute for Research on Poverty by the Department of Health, Education, and Welfare. I thank members of the staff seminars at the University of Reading and the Institute for Research on Poverty, Madison, and I. Garfinkel, J. R. Kesselman, and D. de Meza for comments on earlier versions of this paper. ' Examples of the theory of taxation and labor supply under certainty are M. G. Allingham and Henry Cassidy. One paper that has dealt with the general problem of wage rate uncertainty is by M. J. Block and J. M. Heineke. 2For a more general treatment, see my forthcoming article.