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.
10 days ago