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Reducing Poverty while Increasing Employment: A Primer on Alternative Strategies, and a Blueprint

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  • Robert Haveman

Abstract

Policy to reduce poverty has often foundered on the issue of work incentives. The issue is a manifestation of the traditional conflict between equity and efficiency; the redistribution of income from higher to lower income people typically leads to reduced incentives for both groups to supply labor to the market, or to exercise initiative. This conflict is also known as the "poverty trap"--with income transfer (welfare) programs in place, those with low earned income have a reduced incentive to seek and accept employment, and as a result appear trapped in poverty.This paper discusses the primary policy strategies for reducing poverty while maintaining work incentives that have been analyzed in the literature. These strategies have been presented in a context in which a structure of income support policies and labor market constraints already exists. Existing policies typically have two characteristics: they are categorical and piecemeal in their coverage, and they contain serious ... Réduire la pauvreté et accroître l'emploi : Considérations de base et projets sur les stratégies alternatives Les politiques visant à reduire la pauvreté ont souvent échouées à cause du besoin de ne pas diminuer les incitations à travailler. Il s’agit d’une illustration de la tension classique entre l’équité et l’efficience car la redistribution des revenus à partir des plus aisés en faveur de ceux plus modestes réduit les incitations aux deux groupes d’offrir leur main d’oeuvre ou de prendre des initiatives. Cette situation est souvent identifiée par le terme de "piège de la pauvreté" car la mise en place de mesures de transfert des revenues réduit les incitations à ceux dont les gains salariaux sont peu importants de rechercher un emploi et d’y rester avec la conséquence qu’ils paraissent figés dans la misère.L’étude considère les differentes strategies de base mise en avant dans la litterature visant à reduire la pauvreté tout en préservant les incitations au travail. Ces strategies sont présentées dans le cadre d’un système de soutien des revenues accompané des contraintes du marché ...

Suggested Citation

  • Robert Haveman, 1995. "Reducing Poverty while Increasing Employment: A Primer on Alternative Strategies, and a Blueprint," OECD Jobs Study Working Papers 7, OECD Publishing.
  • Handle: RePEc:oec:elsaac:7-en
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    File URL: http://dx.doi.org/10.1787/281684483135
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    Cited by:

    1. Muennig, Peter & Franks, Peter & Jia, Haomiao & Lubetkin, Erica & Gold, Marthe R, 2005. "The income-associated burden of disease in the United States," Social Science & Medicine, Elsevier, vol. 61(9), pages 2018-2026, November.
    2. Jan Boone & Ruud A. De Mooij, 2000. "Tax Policy in a Model of Search with Training," CESifo Working Paper Series 232, CESifo Group Munich.
    3. Bovenberg, A. Lans & Graafland, Johan J. & de Mooij, Ruud A., 2000. "Tax reform and the Dutch labor market: an applied general equilibrium approach," Journal of Public Economics, Elsevier, vol. 78(1-2), pages 193-214, October.
    4. Bijie Ren, 2008. "The regional effects of marginal wage subsidies," Psychometrika, Springer;The Psychometric Society, vol. 3(4), pages 598-626, December.
    5. Floro Ernesto Caroleo, 2000. "Le politiche per l'occupazione in Europa: una tassonomia istituzionale," STUDI ECONOMICI, FrancoAngeli Editore, vol. 2000(71).
    6. Robert Haveman & Barbara Wolfe, 2000. "Errata," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 7(3), pages 369-371, May.
    7. Primoz Dolenc & Milan Vodopivec, 2005. "Does work pay in Slovenia?," Financial Theory and Practice, Institute of Public Finance, vol. 29(4), pages 341-362.
    8. Sijbren Cnossen, 2002. "Tax Policy in the European Union: A Review of Issues and Options," CESifo Working Paper Series 758, CESifo Group Munich.

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