Dan Shaviro has more on Holt's paper from the ATPI yesterday.

Here's the jaw-dropper from Holt (or the one that made my jaw drop, anyway):

This is for a single parent with two kids and full participation in government programs.  (Click on the image for a better view.) 

Notice how far to the right the parent has to get before her net disposable income goes up.  Apart from psychic gains and better work conditions, there's little reason to go out and look for a better job.  From $12K to $35K she's pretty much in the same position.  This is not the right way to set up incentives.

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