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.
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Famous quotes containing the words welfare and/or trap:
“You can’t talk about a kind of democracy unless those who are affected by decisions make those decisions whether the institutions in question be the welfare department, the university, the factory, the farm, the neighborhood, the country.”
—Casey Hayden (b. c. 1940)
“The little lifting helplessness, the queer
Whimper-whine; whose unridiculous
Lost softness softly makes a trap for us.
And makes a curse.”
—Gwendolyn Brooks (b. 1917)