2- Why Should Policymakers Think About Incentives?


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Connor Sephton answered
Policy makers sometimes underestimate the power of using incentives, as they can be of a considerable influence for them. You are bound to get more of a better response if you encourage something, as opposed to discouraging something. With encouragement and a rewards system, you can inspire people to change things and to improve their performance. Encouraging means more of a thing, discouraging results in less.

If policy makers ignore this idea, they end up creating policies like this:

• Welfare checks for those who aren't in work, meaning that they're being encouraged into the wrong things. You'd be unlikely to want to go out looking for a job if you're already getting paid to do nothing.
• Raising taxes and being perplexed by the fact that nobody is saving or working as hard as they should do. This is just discouragement and will result in people doing less.

Welfare checks are beneficial to those who really need it and ridiculously beneficial to those who are completely capable of getting a job, but are in too comfortable a situation to actually go out there and find one. When it becomes easier to stay at home and reap benefits, given that when you actually get a job you lose any sort of aid that was offered beforehand, people are bound to be less likely to throw themselves into job hunting.

In Michigan alone, you can see how aid disappears for those who actually get out there and try to make a change:

• Your subsidized housing eligibility (in a family of four) completely stops when your income goes over around $25,000.
• If your family income goes about $573, you'll lose your Family Independence Agency subsidies which are offered for living expenses, including food and shelter.

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