Volume 14, Number 4 (Fall) 1979
Moffitt, Robert A. 1979. "The Labor Supply Response in the Gary Experiment." Journal of Human Resources 14(4):477-487.
The results of the Gary Negative Income Tax Experiment show significant work disincentives of 3 to 6 percent for husbands, 26 to 30 percent for female heads, but none for wives. The response of husbands is similar to those in other experiments. The response of female heads is somewhat larger than that in Seattle-Denver, the only other experiment reporting female-head results, because of a larger guarantee effect in Gary. The response of wives is very dissimilar to that in the other experiments, possibly because the Gary labor market offers few part-time possibilities for married women. In general, tax effects are much weaker than guarantee effects, which may also be a result of the steel-dominated, highly structured local labor market.
The author in the Department of Economics, Rutgers University, and is affiliated with Mathematica Policy Research. This research was performed at Mathematica Policy Research, Princeton, N.J., under contracts HEW-100-76-0073 and HEW-100-78-0059 from the U.S. Department of Health, Education, and Welfare. The author would like to extend special thanks to John Friedmann, David Horner, Kenneth Kehrer, and John McDonald for general moral support, persistent constructive criticism of the model, aid in the development of the data base, and correction of several important programming errors. Also, John Friedmann estimated the adjusted-mean responses, David Horner estimated the sample-selection equations, and John McDonald estimated the food-stamp-test equations. The author would also like to thank the following individuals for advice and comments at various points along the way: David Betson, Gary Burtless, Joseph Corbett, David Greenberg, Martin Holmer, Stuart Kerachsky, Charles Mallar, Charles Metcalf, Donna Vandenbrink, and Doug Wolf. In addition, Debra Tessier provided invaluable programming assistance, and Caroline Roth supervised the data-file creation. In addition, the editor of this Journal and two anonymous referees provided valuable comments.
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