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Current rules sometimes require that welfare benefits be reduced by a dollar for every additional dollar a recipient earns. To counter the work disincentive in
Current rules sometimes require that welfare benefits be reduced by a dollar for every additional dollar a recipient earns. To counter the work disincentive in such rules, it has been proposed that benefits only be reduced by, say, 50 cents for every additional dollar of earnings. Explain using a diagram why this change would likely lead some people not currently on welfare to reduce their hours of work and sign up for welfare benefits.
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