Policies to Reduce Inequality & Poverty

Government Expenditure: Increasing Welfare Benefits/


Legislation: Introduction of minimum wage legislation.

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  • Created by: Joana
  • Created on: 06-12-09 10:47
Preview of Policies to Reduce Inequality & Poverty

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Policy This Involves/Examples Advantages Disadvantages
People may not apply for
benefits due to difficulty in
Providing free services
Means tested applying/long process.
such as education and
Government benefits targets
Expenditure: those who really People in genuine need may fall
Subsidising housing and
Increasing need it. outside limit by a small number
Providing free food for
Benefits/ Cheaper than Disincentive to earn higher
young children.
Aids handing out wages/enter employment as you
Handing out means tested
universal benefits. lose benefits and have to pay
tax. Benefits may provide more
income than employment would.
(Poverty Trap)
Provides a disincentive for high
Those on higher earners to produce output.
incomes will be
taxed more Will result in tax evasion
Increasing progressive
Taxation therefore reducing methods, placing money in
the inequality in offshore accounts etc.
distribution of
income. Cost of implementing is
high/complicated process.
Incentive to work
harder therefore
Legislation: Does not help those in poverty
Introduction Introducing a national Gave lowest earners who are out of work directly.
of minimum minimum wage, in the UK a pay rise therefore
wage this was done in April 1999. increasing their Could increase unemployment as
legislation. income and firms hire less workers.
reducing poverty.
Acts an incentive to
accept employment.
Reducing Poverty & Inequality of Wealth/Income:
Means Tested Benefits: Welfare benefits available to those who meet certain criteria of need based on
their income and wealth.
Universal Benefits: Welfare benefits equally available to every citizen regardless of income or wealth.
An example of this is the NHS, everyone is entitled to free healthcare.
Progressive Tax: A tax that takes an increasing proportion of income, as income rises. It is higher the
more you earn. An example of this is income tax, the more you earn the more you will be taxed.


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