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How Do the High Implicit Marginal Tax Rates That Often

question 35

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How do the high implicit marginal tax rates that often occur when transfer payments are inversely linked to earnings affect the incentive of poor people to work and earn?


Definitions:

Treynor Measure

A financial metric used to assess the returns of an investment compared to its risk, specifically accounting for systematic risk with the market as a benchmark.

Jensen Alpha

A performance metric that represents the average return on a portfolio or investment above or below that predicted by the capital asset pricing model (CAPM), based on the market risk.

Performance

The evaluation of the returns provided by an investment over a certain period in relation to its risk.

Portfolio Manager's Ranking

A rating or ranking system used to evaluate the performance of a portfolio manager, often based on factors such as return on investment, risk management, and adherence to investment strategy.

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