Poverty pt2 Flashcards
Means tested benefits
Benefits that may only be claimed depending on a person’s income e.g. housing benefits
Universal benefits
Benefits that are available to all regardless of income level e.g. child benefit
Unemployment trap
Where working results in little to no increase in net income. It applies to those not in work who believe they will lose more than they will gain if their status changes.
Social unrest, tensions and civil disobedience
-A huge gap in living standards between the rich and the poor can create social tensions, riots and even revolution
-This causes external costs e.g. more spending on insurance
Means tested benefits
Benefits that may only be claimed depending on a persons income e.g. housing benefits
Universal benefit
Benefits that are available to all regardless of income e.g. child benefit
Unemployment trap
Where working results in little to no increase in net income. It applies to those not in work who believe they will lose more than they gain if their status changes.
Social tensions, unrest and civil disobedience
-A huge gap in living standards between the rich and poor can create social tensions, riots and even revolutions
-This causes external costs e.g. more spending on insurance
A self perpetuating poverty cycle
-Poorer families have less access to healthcare and education causing underconsumption of a merit good
-Volatile incomes can lead to high debts paying very high interest.
Loss of allocative efficiency and enterprise
-Capital investment and production is increasingly skewed towards meeting the preferences of the rich
-Low levels of savings limits entrepreneurship especially in poorer localities
Policies aimed at inequality reduction
-Redistributive welfare transfer
-Progressive income, consumption and wealth taxes
-Strengthening wage floors and employment rights in the labour market
-Tackling structural barriers to employment
Redistributive welfare transfers
e.g. Higher child benefit and triple lock on state pensions
Progressive income consumption and wealth taxes
e.g. Higher taxes on property
Strengthening wage floors and employment rights in the labour market
National living wage and rising minimum wage
Tackling structural barriers to emploument
e.g. Improved access to new technologies in disadvantaged communities
