A government has extra funds to reduce poverty. Compare three uses.
Raise cash benefits
- Low-income households: Immediate help with food and bills.
- Taxpayers: Higher spending must be funded.
- Work incentives: If poorly designed, may reduce the reward for working.
Cash helps fast but does not tackle the causes of poverty.
Invest in schools in poor areas
- Children: Better skills and future earnings.
- Economy: Higher labour quality over time.
- Timing: Benefits arrive only when children grow up.
Education tackles poverty at its root but takes many years.
Expand free healthcare
- Sick workers: Can recover and return to work.
- Households: Avoid debt from medical bills.
- Government: Large and rising costs.
Healthcare removes a major cause of poverty, illness, but is costly.