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.

Question

Solve this multiple-choice question and choose the correct option.

Accepted Answer

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: Argument I: Relevant and plausible—cash support can improve matching and entrepreneurship readiness.Argument II: Also relevant—without design features, allowances may blunt incentives to accept available work. Verification / Alternative check: Policy practice balances these by adding conditionality, time limits, or training linkages to preserve incentives while offering support. Why Other Options Are Wrong: Only I or Only II: Ignores the validity of the other side.Either I or II: Suggests exclusivity; both stand as strong.Neither: Both are clearly relevant. Common Pitfalls: Equating “strong” with one’s preferred ideology; both efficiency and incentive arguments matter. Final Answer: Both I and II are strong

More Questions from Statement and Argument

Discussion & Comments