Furthermore given the extensive subsidies to child care, which encourage female labor force participation, the high marginal tax rates do not discourage labor supply as we might at first think.
The great danger, as this paper has argued, is that the caps will not remain temporary: and that, if they stay, they will discourage fresh supply.A good new study from the Massachusetts Institute of Technology illustrates the pitfalls.
Although several studies have found no significant labor consequences in the short term (Amarante et al. 2011, 2011; Alzúa et al. 2013; Galasso 2006; Skoufias and Di Maro 2008; Skoufias et al. 2008; Edmonds and Schady 2012; Banerjee et al. 2015), some papers provide evidence that CCTs may discourage labor supply in certain groups.
Heathcote et al. (2014) also find that higher income tax progresssivity discourages labor supply.
Plus the price freeze discouraged additional supply.
High prices and an uncertain and limited supply discourage the development of commercial uses.
High costs may discourage both private supply and public funding of services before age 1 year.
At the same time, to compensate for high housing costs, many expensive big cities have policies or programs - like rent control or inclusionary zoning - that preserve or build some housing for lower-income residents (though, ironically, such policies could reduce overall housing affordability if they discourage new housing supply).
The organizational level (the government and its development partners) provides motivation in the form of stipends, potential employment, materials, training, and supervision, but inadequate remuneration and supplies discourage CHWs.
Forcing developers to build less profitable units acts as a tax, which could discourage, rather than encourage, supply.
