Chap013.6 - Slide 34 Methods of Income Redistribution...

Info iconThis preview shows page 1. Sign up to view the full content.

View Full Document Right Arrow Icon
6 Chapter 13: Labor Markets, Poverty, and Income Distribution Slide 31 Why is Income Inequality a Moral Problem? ± What would happen to the incentive to work if everyone was guaranteed an equal amount of income? ± Rewards for hard work and risk taking raise national income. ± Such rewards lead to inequality. Chapter 13: Labor Markets, Poverty, and Income Distribution Slide 32 Why is Income Inequality a Moral Problem? ± The inequality created by a market system may be inefficient if people would choose less inequality when choosing distributional rules from behind a “veil of ignorance.” Chapter 13: Labor Markets, Poverty, and Income Distribution Slide 33 Methods of Income Redistribution ± Difficulties in Developing Programs to Reduce Income Inequality z Identifying who will receive benefits z Undermining the incentive to work Chapter 13: Labor Markets, Poverty, and Income Distribution
Background image of page 1
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: Slide 34 Methods of Income Redistribution Welfare Payments and In-kind Transfers z Assistance to the poor includes: Cash transfers In-kind transfers Chapter 13: Labor Markets, Poverty, and Income Distribution Slide 35 Methods of Income Redistribution Welfare Payments and In-kind Transfers z Aid to Families with Dependent Children (AFDC) Federal Cash Transfer Program Criticisms o Created an incentive for the father to leave the household o Reduced the incentive to work Chapter 13: Labor Markets, Poverty, and Income Distribution Slide 36 Methods of Income Redistribution Welfare Payments and In-kind Transfers z 1996 Personal Responsibility Act Responsibility of welfare transferred to the states States receive a lump-sum payment from the federal government Five-year lifetime limit on receipt of benefits...
View Full Document

Ask a homework question - tutors are online