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)
“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)