Second Earners and In-Work Poverty in Europe

Tamayo, Holguer Xavier Jara; Popova, Daria

doi:10.1017/s0047279420000227

Cited by 9 publications

(3 citation statements)

References 16 publications

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“…Second and as widely discussed within the literature on labour market incentives for secondary earners (Jara Tamayo and Popova, 2020), familialization policies in the tax code potentially hinder female labour market participation. The tax code promotes a strong breadwinner model in most countries with joint filing and progressive income taxation due to lower marginal tax rates for the primary earner.…”

Section: Discussionmentioning

confidence: 99%

The Taxation of Families: How Gendered (De)Familialization Tax Policies Modify Horizontal Income Inequality

Schechtl

2021

J. Soc. Pol.

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A welfare state’s tax system does not solely redistribute from rich to poor (vertical) but also between family types (horizontal). Different types of families are treated differently due to gendered (de)familialization policies in the tax code, such as joint filing for spouses or single-parent relief. In this study I aim to examine the tax system’s modification of horizontal income inequality between the six most prevalent family types of non-retiree households. To answer my research aim I draw on harmonized data from 30 countries provided by the Luxembourg Income Study (LIS). I estimate pre- and post-fiscal income inequality measured as between-family-type Theil indices. Using multivariate linear regression, I examine the association of the percentage change in inequality and the prevalence of family type-related tax characteristics. The results show that welfare states with familialization tax policies reduce less horizontal income inequality compared to welfare states without familialization tax policies. As familialization tax policies provide additional benefits for breadwinners with dependents, they discourage labour market participation of secondary earners and might exacerbate gender inequalities.

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Section: Discussionmentioning

confidence: 99%

The Taxation of Families: How Gendered (De)Familialization Tax Policies Modify Horizontal Income Inequality

Schechtl

2021

J. Soc. Pol.

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“…There are concerns regarding the declining poverty reduction capacity of welfare states, especially for vulnerable households (Cantillon, 2018). The literature on in-work poverty highlights the limitations for jobs in fully protecting against poverty (Crettaz, 2013;Hick and Marx, 2022;Lohmann and Marx, 2019), discussing the role of low wages (Marchal and Marx, 2018;Salverda, 2019), precarious forms of work (Eurofound, 2017;Horemans, 2019), long-term unemployment spells (Halleröd et al, 2015) and the number of workers in the household (Hick and Lanau, 2017;Tamayo and Popova, 2021). The social investment policy paradigm emphasises human capital development and enabling services for labour market transitions, while acknowledging the role of minimum incomes schemes as stabilizing buffers during economic downturns (Hemerijck, 2018).…”

Section: Introductionmentioning

confidence: 99%

Unravelling the relationship between employment, social transfers and income poverty: Policy and measurement

Gábos,

Binder,

Branyiczki

et al. 2024

Journal of European Social Policy

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Despite the rise in employment, consistently high EU-average poverty rates continue to generate debates about the factors that explain the level and changes in the relative poverty rate, both within and across countries. Assuming a strong negative correlation between poverty and employment, the article investigates the role of four mechanisms responsible for this blurred relationship. Using decomposition analysis and macro-level regression analysis, we investigate the extent to which (i) the distribution of employment across households with different levels of work intensity, (ii) the expansion of non-standard work, (iii) the change in the effectiveness of social welfare systems, and (iv) the change in median income and the corresponding shift in the poverty threshold have contributed to changes in relative income poverty in the last decades. We found that employment growth benefits poverty reduction, but this positive effect was partially offset by the precarious characteristics of some newly created jobs. If the distribution of jobs had favoured the jobless more in the pre-crisis period, the relative income poverty rate would have been lower. Although the share of persons in jobless households decreased during the recovery years, their risk of poverty increased due to the retrenchment of social transfers during and after the Great Recession. Furthermore, the use of a floating threshold, which is linked to changes in median income, underestimates the strength of the relationships between poverty, employment and social transfers: when the poverty threshold is kept fixed, not only do the dynamics of poverty look different, but the estimated coefficients are considerably larger.

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“…Because entitlement is mostly based on individual employment, it is not targeted specically at households with low incomes. However, because job loss among a primary or secondary earner in a household is an important risk factor for in-work poverty (Lohmann and Crettaz 2018;Tamayo and Popova 2021), generous unemploy-ment compensation can be eective in reducing in-work poverty risks in particular in households with multiple adults. Finally, while welfare state research, including empirical studies on in-work poverty, often focus on benets to individuals out of work, the role of policies that support low earners is increasingly acknowledged (Cantillon et al 2020;.…”

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confidence: 99%

No one-size-fits-all solution. Effects of social policies on in-work poverty across household types.

Brülle

2023

Preprint

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The paper studies effects of social policies on in-work poverty risks, distinguishing between measures that either intervene in labour market processes -- i.e. predistribution policies -- or redistribute incomes towards those with low incomes. I argue that effects of different policies can be expected to vary across household contexts, due to the fact that the link between individual employment outcomes and in-work poverty is moderated by household type. The analyses uses data from EU-SILC and macro-level indicators from various sources to estimate general as well as household-type-specific effects using longitudinal methods. Results emphasize that labour market interventions and redistributive transfers impact in-work poverty risks through different mechanisms and also reveal important differences between specific policies: minimum wages contribute to reducing low-wage risks, whereas effects on in-work poverty are small and mainly restricted to single households where labour market outcomes and household income closely align. In contrast, there is a robust negative effect of strict employment protection legislation across almost all household types on in-work poverty, which is consistent with the positive role this measure plays for supporting higher earnings. With respect to redistributional policies, both unemployment benefits and benefits to low earners reduce poverty due to their contribution to public poverty-reduction. However, whereas unemployment benefits mainly reduce in-work poverty among couple households, benefits to low earners are the most effective measure to contribute to lower poverty risks among employed single parents.

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Second Earners and In-Work Poverty in Europe

Cited by 9 publications

References 16 publications

The Taxation of Families: How Gendered (De)Familialization Tax Policies Modify Horizontal Income Inequality

The Taxation of Families: How Gendered (De)Familialization Tax Policies Modify Horizontal Income Inequality

Unravelling the relationship between employment, social transfers and income poverty: Policy and measurement

No one-size-fits-all solution. Effects of social policies on in-work poverty across household types.

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