More Than Just Nickels and Dimes: A Cross-National Analysis of Working Poverty in Affluent Democracies

Abstract

Despite its centrality to contemporary inequality, working poverty is often popularly discussed but rarely studied by sociologists. Using the Luxembourg Income Study (2009), we analyze whether an individual is working poor across 18 affluent democracies circa 2000. We demonstrate that working poverty does not simply mirror overall poverty and that there is greater cross-national variation in working than overall poverty. We then examine four explanations for working poverty: demographic characteristics, economic performance, unified theory, and welfare generosity. We utilize Heckman probit models to jointly model the likelihood of employment and poverty among the employed. Our analyses provide the least support for the economic performance explanation. There is modest support for unified theory as unionization reduces working poverty in some models. However, most of these effects appear to be mediated by welfare generosity. More substantial evidence exists for the demographic characteristics and welfare generosity explanations. An individual's likelihood of being working poor can be explained by (a) a lack of multiple earners or other adults in one's household, low education, single motherhood, having children and youth; and (b) the generosity of the welfare state in which he or she resides. Also, welfare generosity does not undermine employment and reduces working poverty even among demographically vulnerable groups. Ultimately, we encourage a greater role for the welfare state in debates about working poverty.

Differences in the Patterns of in-work Poverty in Germany and the UK

“…We focus on the degrees of decommodification and regulation, strictness of employment protection, bargaining centralisation, and family policy orientation. Therefore, this study refers to measures that are treated as relevant in the aforementioned policy discourse and established as key macro variables for explaining economic micro-level outcomes (Brady et al 2010, Lohmann 2009, Baranowska and Gebel 2010. Table 1 compares Germany and the UK based on these measures.…”

“…In-work poverty has become an important issue across post-industrial countries and is widely viewed as a by-product of processes of globalisation and changing social-and labour market policies (Lohmann and Andress 2008, Brady et al 2010, Fraser et al 2011. In this paper, we argue that such policies have been implemented both in Germany and the UK, but affect different socio-economic groups in both countries.…”

The Rise of Precarious Employment in Germany

“…His major research interests are in social stratification and social inequality, labor markets and welfare states, and quantitative methods and causal inference. His work has been published or is forthcoming in the American Sociological Review, Journal of European Social Policy, and Socio-economic Review. workers and their families experienced heightened economic insecurity (Brady et al 2010;Gautie and Schmitt 2009;Lucifora et al 2005;Standing 2011). As we document below, there is also evidence of rising precarious employment in the forms of low-wage work, working poverty, and temporary employment.…”

“…First, certain demographic characteristics are closely associated with precarious employment (Brady et al 2010;Kalleberg 2007;Lohmann 2009). A shift in demographics on the labor market might therefore be responsible for the growth in precarious jobs.…”

“…For instance, single motherhood is associated with a higher likelihood of working poverty (Brady et al 2010;Lohmann 2009). In addition, the steady increase in female and maternal employment could be associated with precarious employment because women and mothers are overrepresented among involuntary part-time workers ( Second, rising precarious work could result from changes in education and skill.…”