Programs that reduce the incentive to work make income redistribution inefficient.

Question

Quizplus · Accepted Answer

If programs such as welfare and other government assistance programs provide individuals with a comfortable enough life without having to work, then people may choose not to work or not to work as much. This reduces the incentive to work and decreases the amount of labor available in the economy, which can ultimately lead to lower economic growth and income levels for everyone. Therefore, income redistribution through these programs may become inefficient if it reduces the incentive to work.

Programs That Reduce the Incentive to Work Make Income Redistribution