article examines the effects of the Negative Income Tax, in a matching model,
on labor market participation. We show that the introduction of such instrument
reduces unemployment and improves the situation of the poorest. But, amazingly,
it provokes a fall on labor market participation principally because the agents
are then less selective. We find another surprising result: despite the rise on
participation, the increasing of unemployment benefits improves the situation of
the firms at the expense of workers.