Why is it so hard to escape poverty? - Ann-Helén Bay
Curated from: TED-Ed
Ideas, facts & insights covering these topics:
4 ideas
·770 reads
16
1
Explore the World's Best Ideas
Join today and uncover 100+ curated journeys from 50+ topics. Unlock access to our mobile app with extensive features.
Government benefit programs unwittingly produce poverty traps
Imagine you're out of work and a government benefit program helps you with your basic needs, such as rent, utilities and food.
When you finally get a job, you feel things are turning around, except that you are now disqualified from the benefit program and don't earn enough to cover the same costs. Moreover, you have to pay for transportation to work and childcare. Now you have even less than when you were unemployed. Economists call this the welfare trap.
20
234 reads
Financial stability is overlooked
Some poverty traps are connected to a person's circumstances, such as lack of access to healthy food or education. Others affect entire nations, such as cycles of a corrupt government.
The irony of welfare traps is that they are the result of policies designed to fight poverty. Governments provide subsidies for housing, food, energy, and healthcare for those who fall below a certain income level. But it also means people lose the subsidy as soon as they earn just above the threshold regardless if they are financially stable enough to stay there.
18
194 reads
Poverty traps reinforce themselves
Mainstream economic models assume people are rational. If those in poverty know they won't gain any advantage from working, they're incentivised to continue with government assistance.
When fewer people take on new jobs, the economy slows down, keeping people in poverty.
19
179 reads
Attempts to remove the feedback loop
Countries have tried various ways to circumvent the problem.
- Some allow an overlap of benefits after finding a job, while others phase out benefits gradually as income increases. These policies remove some financial incentives to work but the risk of the welfare trap is lower.
- Other governments provide benefits like education, childcare or medical care equally across all their citizens.
- Others proposed a universal basic income to all members of society. Additional wages would supplement the benefit.
19
163 reads
IDEAS CURATED BY
CURATOR'S NOTE
Governmental welfare programs inadvertently reinforce generational poverty. Here’s how they attempt to fix it.
“
Carina 's ideas are part of this journey:
Learn more about videos with this collection
Leonardo da Vinci's creative process
How to approach problem-solving like da Vinci
The importance of curiosity and observation
Related collections
Similar ideas
2 ideas
10 Best Tips for Writing your Book Blurb
Writing with Jenna Moreci
Read & Learn
20x Faster
without
deepstash
with
deepstash
with
deepstash
Personalized microlearning
—
100+ Learning Journeys
—
Access to 200,000+ ideas
—
Access to the mobile app
—
Unlimited idea saving
—
—
Unlimited history
—
—
Unlimited listening to ideas
—
—
Downloading & offline access
—
—
Supercharge your mind with one idea per day
Enter your email and spend 1 minute every day to learn something new.
I agree to receive email updates