Income Support Policies for the Working Poor

18 Pages Posted: 10 Apr 2017

See all articles by Sarah Marchal

Sarah Marchal

University of Antwerp

Ive Marx

University of Antwerp; IZA Institute of Labor Economics

Gerlinde Verbist

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.

Keywords: direct income support, minimum wages, in-work benefits, in-work poverty

JEL Classification: I38, J88, H75

Suggested Citation

Marchal, Sarah and Marx, Ive and Verbist, Gerlinde, Income Support Policies for the Working Poor. IZA Discussion Paper No. 10665, Available at SSRN: https://ssrn.com/abstract=2949101

Sarah Marchal (Contact Author)

University of Antwerp ( email )

Prinsstraat 13
Antwerp, Antwerp 2000
Belgium

Ive Marx

University of Antwerp ( email )

Prinsstraat 13
Antwerp, Antwerp 2000
Belgium

IZA Institute of Labor Economics ( email )

P.O. Box 7240
Bonn, D-53072
Germany

Gerlinde Verbist

University of Antwerp ( email )

Prinsstraat 13
Antwerp, Antwerp 2000
Belgium

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