ECO 201 Chapter Notes - Chapter 18: Social Insurance, Negative Income Tax, Earned Income Tax Credit
13 Apr 2016
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Welfare state: refers to the collection of government programs that are designed to alleviate economic hardship. Government transfers: payments by the government to individuals and families, that provide financial aid to the poor, assistance to unemployed workers, guaranteed income for the elderly, and assistance in paying medical bills for those with large health care expenses. Alleviating income inequality: a family with a small income could use money that was taxed from a higher income family, who probably wouldn"t notice it was gone, to use for better living, food, education. Poverty programs: programs designed to aid the poor(food stamps) Alleviating economic insecurity: suppose something goes wrong for an average family, car accident, cancer, unemployment. Another family member would have to drop out of school and work to pay these bills. Suppose the government program provides families in distress aid by taxing families that are having a good year. Social insurance programs: provide protection against unpredictable financial distress.
