Most economists take for granted the idea that equity and efficiency cannot be achieved together: greater equity must come at the inevitable cost of a loss of efficiency. Thus, equity and efficiency are seen as mutually conflicting goals: the big trade off. Redistributive policies can reduce inequality and its persistence across generations by mitigating the impact of market imperfections. Two widespread policies are money transfers and educational transfers. Money transfers are mainly targeted at the poor and may be used by recipients to increase their consumption, leave additional bequests, or spend more on their children’ s education. Scientists and politicians worldwide disagree greatly about the effectiveness of welfare programmes and transfers, for it's often said that welfare, like other good intentions, contains the seeds of its own destruction. Furthermore, formally large outlays for welfare are no guarantee that they will be effectively targeted and used. However, there are cases where equity and efficiency may not trade off against each other. The topic of analysis is possible reconciliation of the equity and efficiency in social and employment policy and education. After Introductory notes, in Section 2 the theoretical framework is given. Section 3 deals with equity and efficiency trade off in social welfare policy, Section 4 analysis its role in employment policy. In Section 5, the author examines the possibilities of reducing equity and efficiency conflict in education. The paper finishes with conclusion and recommendation for improvement of social, employment and educational policies in the Republic of Croatia.