For welfare recipients,the larger the benefit reduction rate for market income is,the

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Welfare recipients may choose to work additional hours to increase their market income and reduce their reliance on welfare support. However, if the benefit reduction rate for market income is high, such as in a high tax rate system, recipients may lose more in benefits than they can gain from additional income, thus reducing the incentive to work and earn more. Therefore, a larger benefit reduction rate typically lowers the incentive to work additional hours.

For Welfare Recipients,the Larger the Benefit Reduction Rate for Market