3.9 - other policies to reduce income and wealth inequalities and poverty, policies to reduce discrimination

other policies

• investment in human capital

• transfer payments

  • conditional cash transfers

• targeted government spending on merit goods

• universal basic income

investment in human capital

enhancing the skills, knowledge, and productivity of the workforce

• to tackle inequality of opportunity

  • providing universal access to:

    • high quality education

    • high quality healthcare

transfer payments

payments made by government to individuals

• purpose of redistributing income away from those who work and pay taxes towards vulnerable people

  • old

  • sick

  • very poor

  • children of poor families

  • unemployed

-burden on the government

-may reduce incentive to work

types of transfer payments

• old age pensions

• disability pensions

• unemployment benefits

• war veteran’s benefits

• maternity benefits

• housing benefits

• child allowances

• student grants

conditional cash transfers

granted to poor households on conditions that they meet certain requirements

• usually children’s education and healthcare

targeted government spending on merit goods

spending aimed at providing and improving access to essential services for those in need

• education

• health care

• clean water

• sanitation

• sewerage

universal basic income

a government program providing all citizens with a regular, unconditional sum of money to cover basic needs

• to reduce poverty and support livelihoods.

advantages of universal basic income

• simple to carry out

• supports diverse groups

• provides better balance between workers and employers

• stabilises economy during recession

disadvantages of universal basic income

• too expensive as ALL household would get it

• can only be financed by serious cuts in other sectors

• lost incentive to work

• opportunity cost to government

policies to reduce discrimination

• legislation that forbid discrimination in the workplace

• management training o anti-discrimination practices

• communication of anti-discrimination policy to employees

*employers not always comply

Laffer curve

illustrates the relationship between tax rates and tax revenue

• suggests there is an optimal tax rate that maximizes revenue without discouraging productivity.