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. If individuals know that they can receive financial assistance without having to work, there may be less motivation for them to seek employment. This can lead to a cycle of dependency where individuals rely on welfare support instead of finding employment, which can ultimately harm both the individual and society as a whole. Encouraging workfare, which requires individuals to engage in some form of work or job training in exchange for welfare support, may help mitigate this moral hazard. Encouraging individuals to help themselves can also be important, but it is not directly related to the moral hazard created by welfare support.

Welfare Support Creates a Moral Hazard by