Question

At times of economic crisis what are the advantages and disadvantages of the French model of social protection?

Answer 1

At time of economic crisis the unemployment rates are high, with very less real wage growth and increase in poverty.Filkowing are the pros and cons for social protectionism during testing times-

Pros-

• Reduce the poverty rate specially beneficial when unemployment rate is high
• Help in achieving social justice
• Helps in protecting political stability during economic crisis as this can easily cascade into anti establishment movement
• Normalise the consumer spending at helps to avoid the drop in that which in turn help stabilize the gdp
• Frees government from burden of extrem poverty

Cons

• Promotes discrimination based in races, cast and creed
• Increases dependency and complacency
• Discourage saving and Investment
• High fiscal impact when the joblessness is at high
• Create disincentive to work
• Can cause decrease in productivity on account of complacency