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:
“Borrow a child and get on welfare.
Borrow a child and stay in the house all day with the child,
or go to the public park with the child, and take the child
to the welfare office and cry and say your man left you and
be humble and wear your dress and your smile, and don’t talk
back ...”
—Susan Griffin (b. 1943)
“All Coolidge had to do in 1924 was to keep his mean trap shut, to be elected. All Harding had to do in 1920 was repeat “Avoid foreign entanglements.” All Hoover had to do in 1928 was to endorse Coolidge. All Roosevelt had to do in 1932 was to point to Hoover.”
—Robert E. Sherwood (1896–1955)