1. (Disincentives) How does the implicit tax on earned income (in the form of lost benefits from government assistance programs as earned income increases) affect work incentives? How do some people avoid the implicit tax?
2. (C a s e S tudy: Is Welfare-to-Work Working?) Discuss the key features of welfare reforms introduced by the federal government in 1996.Why were policy makers worried that turning welfare over to the states would result in a "race to the bottom"?