Monitoring job search as an instrument for targeting transfers

Redistribution programs are constrained because those not working may be ei ther unable to work, voluntarily unemployed or involuntarily unemployed. Th e inability to distinguish among these three cases inhibits the targeting o f transfers to those most in need. Enabling the government to monitor wheth er unemployed individuals are searching for work and accepting any offered jobs increases its ability to redistribute income. We show that these monit oring activities are complementary, and consider how a minimum wage might b e a useful adjunct to monitoring contingent tax-transfer policies.