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discuss the economic rationale using the concept of market failures and/or desire for redistribution: Workers’ Compensation

discuss the economic rationale using the concept of market failures and/or desire for redistribution: Workers’ Compensation

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Ans-Economic Rationale using the concept of Market failure or Worker's compensation:-

Market failure is the economic situation defined by an inefficient distribution of goods and services in the free market. In market failure, the individual incentives for rational behavior do not lead to rational outcomes for the group.

Where as Worker's compensation refers to the compensation provided to the Worker's in lieu of their work provided. Desire for redistribution of Worker's compensation brings equality and helps in redistribution of income and wealth in the society which removes the gulf between the haves and haven't.

Reasons behind the market failure can be Monopoly, externalities etc.which causes market failure.

Thus, the economic rationale behind the both concept's are different.

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