The theory of labor supply is analyzed with special attention to the relation between labor supply and unemployment. Techniques for simulating the effects of transfer programs are developed. The literature on the supply of hours and the effects of income taxes, Social Security, and public assistance is reviewed. Supply functions for those age 25 and over are estimated, and the supply response to eleven alternative negative income tax plans is simulated. A $2400 guarantee for a family of four with a 50% tax rate is estimated to reduce hours supplied by the recipients by 12% and decrease the number in the labor force by 21%. The Social Security retirement test is found to have no effect on hours supplied. (Author)