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vladimir1956 [14]
4 years ago
9

A 1996 bill reforming the federal government’s antipoverty programs limited many welfare recipients to only two years of benefit

s. a. How does this change affect the incentives for working? b. How might this change represent a trade-off between equality and efficiency?
Business
1 answer:
irina1246 [14]4 years ago
8 0

a. Incentive to work increase

b. This change increase efficiency but decrease equality

Explanation:

a. Reduction of welfare benefits period increasing employment opportunities. Job prospects are diminished now (profit).

b. This bill reform would reduce the distortion created by the benefit program (disincentive to work) and thus improve efficiency.

At the same time, though, the move will reduce the Program's effect on poverty reduction and indirectly on social inequality.

The reform can therefore represent a balance between productivity and equity.

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