The Lerman ratio, named after economist Robert I. Lerman, suggest that a government benefit to the underemployed, such as welfare, will presumably reduce their overall hours of work. The ratio of the actual increase in income compared to the benefit is the Lerman ratio, which is ordinarily between zero and one. Moffitt (1992) estimates it in regard to the Aid to Families with Dependent Children

Aid to Families with Dependent Children

Aid to Families with Dependent Children was a federal assistance program in effect from 1935 to 1996, which was administered by the United States Department of Health and Human Services...

(AFDC) program in the US at about .625.

Sources

Robert Moffitt, Incentive Effects of the U.S. Welfare System: A Review, JEL March 1992, p. 17.