TY  - RPRT
        AU  - Wellschmied, Felix
        TI  - The Welfare Effects of Asset Means-Testing Income Support
        PY  - 2015/Feb/
        PB  - Institute of Labor Economics (IZA)
        CY  - Bonn
        T2  - IZA Discussion Paper
        IS  - 8838
        UR  - https://www.iza.org/publications/dp8838
        AB  - This paper quantitatively determines the asset limit in income support programs which minimizes consumption volatility in a lifecycle model with incomplete markets and idiosyncratic earnings risk. An asset limit allows allocating transfers to those households with the highest utility gains from extra consumption. Moreover, it serves as substitute for history and age dependent taxation. However, a low limit provides incentives for high school dropouts to accumulate almost no wealth. Consequently, they miss self-insurance and suffer from high consumption volatility. For an unborn, these effects are optimally traded-off with an asset limit of $145000.
        KW  - means-tested programs
KW  - public insurance
KW  - incomplete markets
        ER  -