A worker earns $10 per hour at his job eachweek. Now suppose this worker is eligible fora 20 percent wage subsidy (EITC) on hishourly wage rate. Now do the following -a. Estimate this worker's post-subsidy wage rate.a. If this worker was already in the labor market,what work incentives does the policy ofsubsidy impose on his labor supply.a. In general, what is the difference between thework incentives of a wage subsidy versus aplain cash grant?wage

a)Post subsidy wage rate=20% of $10 20*10/100=2 Therefore wage rate post subsidy 10+2=$12.

A worker earns $10 per hour at his job each week. Now suppose this worker is eligible for a 20 percent wage subsidy (EIITC) on his hourly wage rate. Now do the following - . Estimate this worker's post-subsidy wage rate. . If this worker was already in the labor market, what work incentives does the policy of wage subsidy impose on his labor supply. 1. In general, what is the difference between the work incentives of a wage subsidy versus a plain cash grant?

A worker earns $10 per hour at his job each week. Now suppose this worker is eligible for a 20 percent wage subsidy (EIITC) on his hourly wage rate. Now do the following - . Estimate this worker's post-subsidy wage rate. . If this worker was already in the labor market, what work incentives does the policy of wage subsidy impose on his labor supply. 1. In general, what is the difference between the work incentives of a wage subsidy versus a plain cash grant?

Micro Economics For Today

10th Edition

ISBN:9781337613064

Author:Tucker, Irvin B.

Publisher:Tucker, Irvin B.

Chapter12: Income Distribution, Poverty, And Discrimination

Section12.5: Discrimination

Problem 2.1YTE

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