Subsidizing Low-Wage Employment

Awarded Scholars:
Edmund S. Phelps, Columbia University
Project Date:
Aug 1997
Award Amount:
Project Programs:
Future of Work



Over the past twenty-five years, the relative wages of the lowest paid workers in the United States have dropped more than 25 percent. Over the long run, the productivity and wages of low-wage workers might be improved by heavy investments in education and training, but there is a need for more immediate, direct interventions in the near term. In his Russell Sage-supported book, Rewarding Work (Harvard University Press), Edmund Phelps, of Columbia University, proposed a system of wage subsidies to rebuild economic self-sufficiency and combat social exclusion among less-skilled workers. With Foundation support, Phelps will organize a conference of policy experts to compare the practical effectiveness of alternative wage subsidy plans by simulating their effects on pay, employment, and public spending.


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