Less Eligibility, Welfare, and Punishment: The Econometric Evidence

The principle of less eligibility posits that assistance must be less attractive than low-wage work, and that punishment must make crime less attractive than low-wage work or welfare. Much of the literature dismisses less eligibility as outdated and reactionary. In fact, less eligibility is neither a doctrine nor a policy prescription. It assumes that individuals respond to incentives based on the relative desirability of low-wage work, assistance, and crime. Maintaining a gap in desirability between these options is structurally necessary to sustain low-wage labor supply and contain crime. The literature on the causal relations that make up less eligibility shows that increased welfare generosity decreases the labor supply for low-wage work; that making low-wage work more desirable reduces crime; and that increased welfare generosity also reduces crime. These effects are supported by a wealth of econometric evidence, suggesting the plausibility of less eligibility through robust microfoundations. The implied trade-offs are objective realities, indifferent towards normative inclinations. The main macro-level implication is to explain the oft-noted but under-theorized inverse relation between welfare and punishment.