Welfare Trap

The welfare trap theory asserts that taxation and welfare systems can jointly contribute to keep people on social insurance because the withdrawal of means tested benefits that comes with entering low-paid work causes there to be no significant increase in total income. An individual sees that the opportunity cost of returning to work is too great for too little a financial return, and this can create a perverse incentive to not work.

Read more about Welfare Trap:  Differential Definitions, Examples

Famous quotes containing the words welfare and/or trap:

    I have an intense personal interest in making the use of American capital in the development of China an instrument for the promotion of the welfare of China, and an increase in her material prosperity without entanglements or creating embarrassment affecting the growth of her independent political power, and the preservation of her territorial integrity.
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    We are not very much to blame for our bad marriages. We live amid hallucinations; and this especial trap is laid to trip our feet with, and all are tripped up first and last. But the mighty Mother who had been so sly with us, as if she felt that she owed us some indemnity, insinuates into the Pandora-box of marriage some deep and serious benefits, and some great joys.
    Ralph Waldo Emerson (1803–1882)