Social policy — should the Government pay unemployment allowance to educated unemployed youth? Statement: Should the educated unemployed be paid an “unemployment allowance” by the Government? Arguments: I. Yes — it provides monetary support to seek jobs or start self-employment. II. No — it may dampen the urge to work and promote idleness.

Introduction / Context:Unemployment allowances are debated worldwide. A strong argument can come from either efficiency/equity benefits or from potential moral hazard concerns. The question asks which of the two given arguments are strong.

Given Data / Assumptions:

• I claims cash support helps job search and can seed self-employment.
• II warns of reduced job-seeking effort due to guaranteed income.
• We are not told about design safeguards (duration caps, conditionality), so both perspectives are evaluated in principle.

Concept / Approach:

• Income support can stabilize households and enable search time or microenterprise experiments.
• Poorly designed allowances can indeed reduce work incentives (classical moral hazard).
• In argument-strength questions, two opposing positions may both be strong if each is relevant and logically sound.

Step-by-Step Solution:

Verification / Alternative check:

Why Other Options Are Wrong:

Common Pitfalls:

Final Answer: