Benefit Systems and Work Incentives 1998

Unemployment and related welfare benefits help prevent those without work from falling into poverty but at the same time reduce the incentive to work; this is one of the main dilemmas of social policy. For the first time, this publication analyses the complicated interactions of tax and benefit systems for many different family types and labour market situations. This volume enables the reader to discover exactly what features of the tax and benefit system cause disincentives to work; it compares all the different benefits made available to those without work and the taxes they pay with potential in-work incomes. In-work incomes in some countries are little higher than benefits made available to those without work. Furthermore, some benefits are withdrawn as earnings rise, reducing the attraction of moving up the job ladder. Unemployed families who face these disincentives may become locked in unemployment and are at risk of exclusion from the labour market.

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