Abstract
Ways in which heads of families in the Seattle and Denver Income Maintenance Experiments reduce their labor supply are analyzed in this paper. By estimating transition rates of leaving and entering employment, the authors calculate the effect of the experiment on such measures as the average length of nonemployment, the likelihood of being employed at a given time, the number of entries into and exits from employment within a given period, and the average length of spells of employment. Results indicate that heads of families on experimental negative income tax (NIT) programs have a greater tendency than controls to leave employment. The results also indicate that the NIT programs substantially lengthen spells of nonemployment for all groups studied. All groups also experience a significant decline in the probability of employment as a result of the NIT treatments.
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