The presentation by urging the audience to think

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the presentation by urging the audience to think about biases versus reality and what the conclusions from his research mean for public/economic policy decisions. Despite unemployment rates over the past decade being near or inside of the natural unemployment rate and recently, an increase in the interest rate by the Bank of Canada indicating significant economic growth, inequality within Canada has been growing. This is evident in the graph previously shown about Canada’s Gini-coefficient since the 1970’s. There are three primary causes as to why Canada has been experiencing increasing inequality. Firstly, globalization has played a significant factor because people overseas are willing to work harder for less money, so goods that used to be made in Canada ended up being outsourced instead. Secondly, technology and automation has played a factor. The job market requires workers to be more employable and have more skills if they want to justify a higher pay or employability – something that can only be done through post-secondary education, which can be difficult to obtain with barriers to access and opportunity. Thirdly, government plays a factor as to why inequality may rise. Without policies that effectively address and respond to the aforementioned factors, income inequalities may continue to spiral out of control. As previously mentioned, another prominent policy aimed to reduce economic inequality is to redistribute wealth through progressive taxation and welfare. Typically, the different types of taxes that exist within Canada are progressive based upon income and consumption which takes proportionately more tax from those on higher levels of income, and redistributes welfare benefits to those on lower incomes. These taxes include things such as: income tax, sales tax, property tax and corporate taxes which are used for social programs. These social programs include: Child Tax Benefits, Pension Plans, disability welfare, Guaranteed Income Supplements, food stamps, free education, free healthcare, and most importantly, Old Age Security. Considering majority of Canada’s population will be senior citizens within the coming decades, old age security is especially important because they will represent majority of lower-income individuals. The impacts of these welfare programs are best represented through the Gini-coefficient. Before taxes the coefficient is 0.47 but afterwards, the coefficient is 0.32. As a
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  • Spring '18
  • Papaiconomou
  • Unemployment, Externality, post-secondary education, Hanauer

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