Economics for Social Policy

Catalog description

Economics allows us to determine the costs and benefits of social policies like cash benefits, unemployment insurance, health insurance, pensions, education, etc. Policies typically affect the behavior of agents like individuals, families and firms, and we have to take these reactions into account when analyzing policy. Economics allows us to predict how policy is likely to affect behavior by understanding how the policy changes individuals' decisions, and what collective outcomes these myriad individual decisions bring about. For example, a universal basic income allows individuals to sustain themselves and their families when they are not working. At the same time, such guaranteed income has the potential to discourage people from looking for a job. If enough people are discouraged from looking for a job, employment in the economy will decrease, leading to lower production and lower tax revenues for the government. Policymakers have to take these phenomena into account in order to design a good income support system.