Economics – Labour market forces and government intervention | e-Consult

Transfer earnings refer to income received by an individual or entity as a result of the transfer of existing wealth or resources. This typically involves payments made from one party to another without the creation of new wealth.

Key characteristics of transfer earnings:

• No production of new goods or services: The income arises from the redistribution of existing resources, not from the creation of new ones.
• Examples: These include salaries, wages, pensions, welfare payments, subsidies, and inheritances. A salary is a transfer of wealth from the employer to the employee in exchange for labour, but no new goods or services are produced *specifically* for that transfer.
• Distinction from other income: Transfer earnings are distinct from income generated through production, such as profits from a business or revenue from selling goods and services. These latter forms of income are a result of entrepreneurial activity and value creation.

In essence, transfer earnings represent a redistribution of existing resources rather than the generation of new ones.