Welfare support creates a moral hazard by

Question

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Welfare support can create a moral hazard by reducing the need to work, as individuals may become reliant on welfare payments instead of seeking employment. This can lead to a cycle of dependency and disincentivize individuals from improving their skills and seeking higher paying jobs. Workfare (B) is a policy that requires individuals to work in exchange for welfare benefits, which can help mitigate the moral hazard problem. Encouraging individuals to help themselves (C) is a positive aspect of welfare support, but it does not directly address the moral hazard problem. Solving the equity and efficiency conflict (D) is not directly related to the moral hazard problem created by welfare support.

Welfare Support Creates a Moral Hazard by