Effect of higher cost of living

increase in the opportunity cost of holding money, uncertainty over

future inflation which may discourage investment and savings, and if
inflation were rapid enough, shortages of goods as consumers
begin hoarding out of concern that prices will increase in the future.

High or unpredictable inflation rates are regarded as harmful to an
overall economy. They add inefficiencies in the market, and make it
difficult for companies to budget or plan long-term. Inflation can act as
a drag on productivity as companies are forced to shift resources away
from products and services in order to focus on profit and losses from
currency inflation. Uncertainty about the future purchasing power of
money discourages investment and saving. Inflation can also impose
hidden tax increases; for instance inflated earnings push taxpayers into
higher income tax rates unless the tax brackets are indexed to inflation.

Cost of living can affect student achievement,
Poor children living in higher-cost areas like the urban centres of
California are more likely to struggle academically than their
counterparts in lower-cost areas, This means that the economic
downturn coupled with the high cost of living in California has left many
families and individuals economically vulnerable, but invisible to state
policymakers because they do not have enough income to make
ends meet and yet are not poor enough to be counted as poor, the
brief states For poor children in particular, living in a higher-cost area is
also associated with lower levels of what researchers called
"parental investments" in their children related to time and money spent
on extracurricular activities, school involvement, and books and a
computer for the home. This is likely a result of having fewer financial
resources left after paying for basic expenses, said study co-author
Nina Chine of Child Trends, a non-profit, nonpartisan research centre.



STUDENTS FACE BURDEN OF HIGH COST OF LIVING
They cant buy their references book due to high cost of living. They
have no extra pocket money to buy the books as it is too expensive.
Besides, they cant also go for tuition for their poor subject. Thus, these
will make them face burden as no go for tuition and also no reference
books can refer as they not understand the topic of a subject.
Increase the problem of social
Parents are busy working to earn excess income. Therefore they do
not have the time to accompany their children. Indirectly, they have
neglected their children. Therefore, their children would get bored at
home and they're going to hang out to spend their time. In this case,
they will probably go to cybercaf or do unhealthy behavior such as
smoking. They might also be influenced by friends who did not behave
well. in this case, they're going to break the law as a drug addict, mat
rempit and so on.
The crime rate increase. It is said that because of the high cost of living
will cause them to lack of money to meet their needs and requirements.
This pressure will cause them to commit crimes such as theft,
snatching and robbery to get money for survive.