Low Pay and In-work Poverty: Preventative Measures and Preventative Approaches

May 2016

Low Pay and In-work Poverty

Poverty and social exclusion are often associated with long-term unemployment and household worklessness. Yet in today’s European labour market, a job is not always sufficient to provide a decent livelihood for workers and their families. In many Member States, in-work poverty is on the rise, driven by a combination of factors including low pay, low work intensity, instability of employment, and the way that tax-benefit systems work (or do not work) to redistribute market incomes and support households with additional needs. These factors are themselves shaped by the economy, the functioning of the welfare state, the balance of power and influence, and by choices made by individuals and families.

The antecedents of precarious working lives can often be traced back to childhood, meaning that an effective policy response must not simply tackle consequences but also address root causes, including education and childhood poverty. The immediate focus of the current review is not on childhood, but on measures that can be taken to prevent low pay and in-work poverty among today’s adults. But reducing poverty in these households would also reach children, creating a virtuous circle with consequences reaching far into the future.

This review pulls together the existing evidence from across the European Union on the effectiveness of different policy interventions aimed at reducing low pay and in-work poverty.

Client: European Commission – DG for Employment, Social Affairs and Inclusion

Authors: Abigail McKnight, Kitty Stewart, Sam Mohun Himmelweit & Marco Palillo 

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