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Chapter 15: Q.5 (page 376)

How does the TANF attempt to loosen the poverty trap?

Short Answer

Expert verified

TANF aims to keep welfare users out of poverty by requiring them to work and restricting the duration of their benefits.

Step by step solution

01

Concept Introduction

A poverty trap occurs when a poor individual is unable to escape poverty. Even if he gets a job, a poor individual will remain poor since his government benefits would be reduced.

02

Explanation

The government has implemented a number of programs to help people who are poor or have incomes that are just above them. TANF is a government program that helps families with dependent children.

TANF stands for Temporary Assistance for Needy Families. When a parent or other guardian cannot afford to provide for their children's basic requirements, the program assists them. It makes it possible for children to live with their families in their own homes while yet receiving the necessary care. It promotes job creation and employment, which helps to minimize deprived parents' reliance on government subsidies. The state can use this money for any anti-poverty program. This money can be used by the state for any anti-poverty program.

03

Final answer

As a result, TANF encourages poor people to work by giving them chances in an attempt to loosen the poverty trap.

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Most popular questions from this chapter

Jonathon is a single father with one child. He can work as a server for \(6 per hour for up to 1,500 hours per year. He is eligible for welfare, and so if he does not earn any income, he will receive a total of \)10,000 per year. He can work and still receive government benefits, but for every \(1 of income, his welfare stipend is \)1 less. Create a table similar to Table 15.4 that shows Jonathan鈥檚 options. Use four columns, the first showing number of hours to work, the second showing his earnings from work, the third showing the government benefits he will receive, and the fourth column showing his total income (earnings + government support). Sketch a labor-leisure diagram of Jonathan鈥檚 opportunity set with and without government support.

Describe how a push for economic equality might reduce incentives to work and produce output. Then describe how a push for economic inequality might not have such effects.

What is the difference between poverty and income inequality?

Redistribution of income occurs through the federal income tax and government antipoverty programs. Explain whether or not this level of redistribution is appropriate and whether more redistribution should occur.

In country B, the population is 900 million and 100 million people are living below the poverty line. What is the poverty rate?
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