Answer to Question #302735 in Microeconomics for jjo

Question

) Suppose the government can redistribute income with a lesser cost from relatively rich to relatively poor people. What effect does redistribution have on average health? 

Answer 1

What effect does redistribution have on average health? 

Public spending for poor-targeted programs, as well as economic regulation, are used to implement redistributive policies. Even if these measures are successful in decreasing inequality and poverty, they can stifle economic progress. They drive up government spending, which in turn drives up other factors that stifle economic growth: more taxes, lower public savings, higher interest rates, and less public infrastructure investment.

Income redistribution to those in poorer health would reduce disparities in well-being by compensating for sickness and, on average, reaching poorer people. The government through taxation, upgrading, and providing free or subsidized health programs will improve the health of the general public thus improving the average health of the society.