Final answer:
The question involves studying the effects of a government antipoverty program on work incentives for a single mother. We create a table to demonstrate how her earnings affect her government support, revealing a potential welfare trap where additional work does not lead to significant increases in total income. The primary concern is whether the program's structure impacts the mother’s incentive to work more hours.
Step-by-step explanation:
The student's question relates to the impact of a government antipoverty assistance program on a single mother's incentive to work. When the mother earns income, it reduces her government support on a dollar-for-dollar basis. In this scenario, Susan has a potential earning of $8 per hour for up to 2,000 hours a year, with a base government benefit of $16,000 that decreases with her earnings. Earning more by working results in less government support, creating a potential disincentive to work more hours as it does not significantly increase her total income.
To depict this, a table is created with columns representing hours worked, earnings from work, the level of government support, and total income. For instance, working 1,000 hours at $8 per hour would result in $8,000 in earnings and an equal reduction in government support, leaving total income unchanged at $16,000. Working over a certain threshold, however, would begin to marginally increase total income.
Such assistance programs can cause a welfare trap, where the benefit of working additional hours does not outweigh the loss of leisure time and additional costs such as childcare. Therefore, these programs can sometimes reduce the incentive to work, especially when the gain from working additional hours is negligible compared to the total possible government support.