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Income Support Policies for the Working Poor

Author

Listed:
  • Marchal, Sarah

    () (University of Antwerp)

  • Marx, Ive

    () (University of Antwerp)

  • Verbist, Gerlinde

    () (University of Antwerp)

Abstract

This paper asks what governments in the EU Member States and some US states are doing to support workers on low wages. Using model family simulations, we assess the policy measures currently in place to guarantee an adequate disposable income to working families, taking into account minimum wages, social security contributions, taxes and cash benefits. We show that despite increased efforts over the past decade, disposable incomes of certain types of minimum wage workers still fall well below the EU at-risk-of-poverty thresholds in many countries. Single earners with dependent children are especially at risk of poverty. We discuss the options for making progress.

Suggested Citation

  • Marchal, Sarah & Marx, Ive & Verbist, Gerlinde, 2017. "Income Support Policies for the Working Poor," IZA Discussion Papers 10665, Institute for the Study of Labor (IZA).
  • Handle: RePEc:iza:izadps:dp10665
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    References listed on IDEAS

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    1. Richard Blundell & Alan Duncan & Julian McCrae & Costas Meghir, 2000. "The labour market impact of the working families’ tax credit," Fiscal Studies, Institute for Fiscal Studies, vol. 21(1), pages 75-103, March.
    2. Gosta Esping-Andersen, 2008. "Childhood investments and skill formation," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 15(1), pages 19-44, February.
    3. Raj Chetty & John N. Friedman & Emmanuel Saez, 2013. "Using Differences in Knowledge across Neighborhoods to Uncover the Impacts of the EITC on Earnings," American Economic Review, American Economic Association, vol. 103(7), pages 2683-2721, December.
    4. Richard Blundell & Andrew Shephard, 2012. "Employment, Hours of Work and the Optimal Taxation of Low-Income Families," Review of Economic Studies, Oxford University Press, vol. 79(2), pages 481-510.
    5. Esping-Andersen, Gosta & Garfinkel, Irwin & Han, Wen-Jui & Magnuson, Katherine & Wagner, Sander & Waldfogel, Jane, 2012. "Child care and school performance in Denmark and the United States," Children and Youth Services Review, Elsevier, vol. 34(3), pages 576-589.
    6. Janet Currie & Firouz Gahvari, 2008. "Transfers in Cash and In-Kind: Theory Meets the Data," Journal of Economic Literature, American Economic Association, vol. 46(2), pages 333-383, June.
    Full references (including those not matched with items on IDEAS)

    More about this item

    Keywords

    direct income support; minimum wages; in-work benefits; in-work poverty;

    JEL classification:

    • I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs
    • J88 - Labor and Demographic Economics - - Labor Standards - - - Public Policy
    • H75 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Government: Health, Education, and Welfare

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