Answer to Question #214715 in Microeconomics for Mulweli

Question

Define social security, critically discuss the effects of social grants on incomes and welfare

Answer 1

Social Security is a federal program that provides retired people, the disabled, the impoverished, and others with income and health care. The Social Security Act was signed as a way to create a safety net for the millions of people who had been affected by the Great Depression. Social Security is a type of insurance. Workers often contribute to the program through payroll withholding at their place of employment. Each year, they can earn up to four credits. One important component of individual and social well-being is the social grants and security system. Its efficiency and fairness are critical for social welfare improvement. Basic necessities like food and education are actually increased by social assistance. Changes in funding have a more direct influence on poverty and inequality than indirect consequences. This is consistent with the reality that grants account for a significant portion of the income of low-income households. The well-being of households in rural formal, tribal authority, and urban informal areas has improved. Poverty is little influenced in formal urban households, but it is lessened when excluded children are involved in the system. Education and nutritious food products are being consumed and produced in greater numbers. Social grant spending appears to be an investment in human capital, underpinning future inclusive prosperity.