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.
    William Howard Taft (1857–1930)

    And boys, be in nothing so moderate as in love of man, a clever
    servant, insufferable master.
    There is the trap that catches noblest spirits, that
    caught—they say—God, when he walked on earth.
    Robinson Jeffers (1887–1962)