leisure is set. Table 15.4 shows the total income differences with various choices of labor and leisure.

However, this type of program raises other issues. First, even if it does not eliminate the incentive to work by

reducing government payments by $1 for every $1 earned, enacting such a program may still reduce the

incentive to work. At least some people who would be working 2,000 hours each year without this program

might decide to work fewer hours but still end up with more income—that is, their choice on the new budget

line would be like S, above and to the right of the original choice P. Of course, others may choose a point like R,

which involves the same amount of work as P, or even a point to the left of R that involves more work.

The second major issue is that when the government phases out its support payments more slowly, the

antipoverty program costs more money. Still, it may be preferable in the long run to spend more money on a
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