Friday , October 22 2021

How best to fight poverty – economy


What should the state do in addition to a good framework for economic growth in the fight against poverty? The question has been discussed by social scientists for decades. Previous research has often examined the short-term effects of individual measures.

A study at the University of California at Irvine, for the first time, has examined and compared the most common and comprehensive state poverty programs, particularly in terms of the long-term implications of the United States in poorer regions. The prestigious National Bureau of Economic Research has recently traveled the newspaper.

State-of-the-art support

The United States and Switzerland know the tools of poverty welfare and the minimum wage. In addition, since 1982, there was a tax credit system in the United States. US President Ronald Reagan introduced this at the national level, and Bill Clinton expanded significantly in 1992. If the income of a working person after all the cuts becomes negative, they do not have to pay taxes, but they have good state support. This eliminates the difficult point between tax-exempt social assistance and taxable income in Switzerland; this, in most cases, means that it is not beneficial for those who receive social assistance to participate in employment.

Tax credits can have the greatest impact on poverty alleviation and state aid.

The tax credit system in this country was already necessary, but was rejected in a non-practical manner by the Federal Council and the administration. It was not important in the Federal Poverty Alleviation Program that ended this year. However, it is thought to be effective in the research because it provides an incentive to accept the job. However, this is controversial for people who live in an economically deprived area where there is not enough work. Geographically intensified poverty is a particular problem for the minorities, especially those who tend to co-exist in these areas, such as David Neumark, Brian Asquith and Brittany Bass.

This study from California closes this gap by examining the areas where many people live in poverty. The research examines an extraordinarily long period of research from 1970 to 2010 on the basis of publicly available data.

Women are particularly helpful

The results show that tax credits have the greatest impact on poverty alleviation and state aids in both the short and long term, and especially those affected by poverty have caused a major change in their lives. Especially women enter the labor market and poverty more often than men.

Minimum wages have a less positive effect, and the data is less clear. According to the study, the effect of the minimum wage on income is only statistically significant in the short term, and this effect is ejected in the long term. The impact on employment is positive in the short term and the opposite is the case in the long term, ie employment falls. However, these results are not statistically significant.

Results are statistically robust

Social welfare, according to the authors, increases the dependence on poverty and the benefit of the state in the long term. Limiting the period in which social assistance is given has the opposite effect and reduces poverty and public support. Welfare and employment have no effect on social assistance.

In order to secure the analyzes, the authors conducted more tests, so the calculation was limited to particularly disadvantaged areas or evaluated as a different, shorter time period. The results were statistically robust. In particular, poor regions have responded more strongly to tax credits than less poverty-stricken areas. In contrast, migration has no impact on the effectiveness of the three social policy measures examined.
(Editors Tamedia)

Created: 15.11.2018, 11:52 hours

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