The dynamics of in-work poverty

In Spain, 70% of children in poverty live in households with one or more workers; equally, households with children make up the majority of households in in-work poverty (53%) despite representing only 27% of all households. However, in-work poverty and child poverty are often thought of as separate problems. Most analyses on in-work poverty in Spain use data from a single year and focus on working individuals. However, since households share needs and resources, understanding the factors that increase the risk of poverty requires studying households. In this work, carried out at the Demographic Studies Centre at the Autonomous University of Barcelona, we adopt a dynamic perspective to analyse the interrelationship between child and in-work poverty, and specifically the high in-work poverty rates in households with children and adolescents. Using longitudinal data from the Living Conditions Survey (2017-2020), we examine the role played by childbirth/adoption, the presence of children in the household and their age in the processes of impoverishment. We find that in 2020 only 4% of households entering in-work poverty experienced an increase in the number of children and adolescents in the household. In contrast, 37% of entrants experienced a decrease in income without decreasing the number of workers (for example, due to a temporary period of unemployment), and 29% a reduction in unemployment benefit income. Households with children tend to have greater difficulties in escaping poverty, which translates into longer periods in in-work poverty. We conclude that changes in employment status are more relevant than changes in household composition for understanding child and working poverty. Additionally, the role of risk factors such as temporary employment is compounded in households with children, further reducing their poverty exit rates. Reducing child poverty requires tackling in-work poverty and vice versa

[Background:] In-work poverty, a phenomenon that engenders social exclusion, is exceptionally high in the United States. The literature on in-work poverty focuses on occupational polarization, human capital, demographic characteristics, and welfare generosity. However, we have no knowledge on the effects of family demographic processes on in-work poverty across individuals' life courses. [Objective:] We estimate the risk of in-work poverty in the United States over the life course as a function of family demographic processes, namely leaving the parental home, union formation and dissolution, and the transition to parenthood. [Methods:] We use data from the 1979 National Longitudinal Survey of Youth (NLSY79) and fixed effects regression models with interactions between age and each family demographic process to estimate age-specific associations between these processes and the probability of in-work poverty. [Results:] In-work poverty is a common phenomenon across the life courses of our study cohort: 20% of individuals are at risk of in-work poverty at every age. However, the risk generally decreases for men and increases for women across the life course. Leaving the parental home, entering parenthood, and separation increase, while marriage decreases the risk of in-work poverty. While the associations between marital statuses and in-work poverty are stable over the life course, the associations between parental home leaving and fertility with in-work poverty vary by age. [Contribution:] Our findings demonstrate the importance of family demographic processes over and above traditional stratification factors for the risk of in-work poverty. Associations between family demographic processes and in-work poverty estimated for all age groups may be grossly underestimated.

The economic and financial crisis has resulted in a significant increase in the EU working poor. Nevertheless, the EU and its Member States have hardly coped directly with this phenomenon, adopting instead “traditional” social policies, aiming at increasing employment or combating poverty in general. However, in-work poverty is a complex issue, stemming from a variety of factors and requiring to be addressed specifically. The present paper offers an overview of in-work poverty in the EU from a labour and social security law point of view. Firstly, the concept of in-work poverty is delimited. Secondly, poor workers are identified according to the contractual typology. Thirdly, other in-work poverty factors are searched to understand if in-work poverty is exclusively linked to the labour market. Then, some examples of national working poor’s measures are analysed, as well as the EU policies in this regard. Finally, it is assessed if the EU actions are effective in order to solve the working poor problem and to coordinate the national anti-in-work poverty strategies chosen by the Member States.

There has been a widely accepted belief that employment growth is fundamental in the fight against poverty and social exclusion. The existence of working poverty proves that even if employment growth still represents the best way to avoid poverty risk it is not always enough, actions being needed to create not only more jobs, but also better jobs. The aim of this paper is to highlight the main causes and mechanism of working poverty in the EU countries, in the recent economic crisis and recovery period (2007–2012), in order to identify some possible measures that need to be taken so that in-work poverty reduces. The comparative analysis shows that the phenomenon of working poverty has been growing in sixteen EU countries and the prevalence of in-work poverty varies significantly across these countries. The correlation and regression analysis results suggest that gaps in the national human and economic development can be explained by disparities in working poverty rate. Vulnerable and precarious employment represents an important factor behind the high level of working poverty from the EU countries in the analysed period. By taking into consideration the cumulative influence of multiple socio-economic variables, for the 2007–2012 period, results of principal components analysis and cluster analysis highlight that there are common features and differences between the EU Member States according to their working poverty, employment performances, efficiency of welfare state system and the level of human and economic development. The findings of this study can be useful for policy makers in order to reduce the phenomenon of working poverty. DOI: http://dx.doi.org/10.5755/j01.ee.25.4.6339

Family demographic processes and in-work poverty: A systematic review.

Montenegro has the highest in-work poverty (IWP) rates among all ex-Yugoslav countries. Although the IWP rate in Montenegro is significantly below the average poverty rate for the entire population, it has increased substantially since 2013. Despite that, IWP is rarely discussed as an important topic in the media or by policymakers, although some policies do target the working population at risk. This article starts with the identification of factors that affect IWP and differences in IWP of specific population groups between Montenegro and selected ex-Yugoslav countries (Slovenia and Serbia). As low earnings and low wages from employment are the main causes of IWP, the article focuses on the analysis of policies that influence income: minimum wage policy, family policy and tax policy and their influence on IWP of specific population groups. We use SILC data to map trends of IWP, while further analysis is based on desk review and expert interviews. We conclude that the approach to IWP in Montenegro requires more integrated policies that should target population groups most exposed to IWP.

In-work poverty (IWP) is gaining interest in the public agenda. This article is a first contribution to the analysis of IWP dynamics in Latin America, based on the study of the Argentine case. Using one-year interval panel data, the paper analyzes the trigger events that produce entries and exits from IWP, short-term poverty trajectories and the determinants associated to transient and persistent poverty. Drawing on a decomposition analysis of mutually exclusive events, the article shows that labor market events are the most relevant triggers for both exits and entries into IWP. Based on a multinomial logistic regression, the paper concludes that low education, the presence of children in the household, and having a low-quality job are the three main factors explaining persistent-poverty.

This article seeks to evaluate how well the different welfare states of Europe perform in terms of preventing recurrent and persistent income poverty and what household and individual characteristics influence poverty duration. Because we use cross-national data on longitudinal poverty, we are able to increase our understanding of the effect of the institutional context within which poverty occurs. We show that country welfare regimes strongly influence long-run poverty, with social democratic countries reducing the level of persistent and recurrent poverty. Liberal and Southern European regime countries have both higher rates and longer durations of poverty. Despite their dissimilar patterns of poverty duration, European welfare states display rather similar patterns of exit from poverty, once we control for duration. There is some evidence that high initial exit rates from poverty in social democratic and corporatist countries decrease quickly whereas those in liberal and Southern European countries remain high, which could suggest lower levels of incentives in the former.

This book is the outcome of a collective research project undertaken within the Framework of the European Network of Excellence RECWOWE (Reconciling Work and Welfare in Europe). Editors and authors have been concerned to follow a clear pattern of increasing integration of research partners and activities. After an initial period of activity devoted to the completion of a comprehensive state-of-the-art survey on the tension between quantity and quality of work, in-work poverty (IWP) was seen as one specific and relevant dimension (Guillén, Gutiérrez and Peña-Casas, 2009). A second task was aimed at selecting and integrating research on five country cases - Spain, France, United Kingdom, Sweden, Poland - analysing in detail the relative performance of the country concerned on the basis of previous comparative analysis, with a special focus on the role of institutional and policy factors. In a third task the research focus was expanded to highlight specific factors of IWP, such as the influence of tax and benefit policies, on the persistence and dynamics of in-work poverty, on wage inequalities and household characteristics, on the gender dimension of in-work poverty, on migrants and in-work poverty.

Although the detrimental effects of poverty on child mental health are well established, questions remain as to which aspects of poverty matter most and which mechanisms account for the association. This study tested the relative influence of depth of current poverty and poverty duration on child anxiety/depression and antisocial behavior, then evaluated whether parenting practices mediated observed associations. Data come from four waves of the Canadian National Longitudinal Survey of Children and Youth (1994–2000), with analysis restricted to children who were aged 2 to 5 at initial interview and lived with both biological parents throughout (n = 1,901). Depth of current poverty was associated with child anxiety/depression, whereas persistent poverty was associated with child antisocial behavior. Parenting behaviors were significant predictors but did not mediate the association between poverty dynamics and child mental health. The research and policy implications of these findings are discussed.

This study examines how work-family trajectories of households with poverty experience relate to poverty persistence across their working-age life course, using data from the German Socioeconomic Panel from 2007 to 2020 (N=1,518). Work-family trajectories are conceptualised by considering individual- and household-level explanations of poverty. Taking a life course perspective, the study explores sequences of labour market attachment, the extent of low-wage receipt and the needs-to-resource ratio in households across eight years. Methods combine multichannel sequence analysis to identify four clusters of work-family trajectories, and linear regressions to link these clusters to the cumulated length of poverty experiences and the average distance from the at-risk-of-poverty threshold across eight years. Findings reveal that most work-family trajectories among working-age households with poverty experience are dominated by low household work intensity and the presence of children, with trajectories of low-wage receipt forming less prominent patterns. Household histories of low work intensity are linked to increased poverty duration and severity. This relation is even stronger for households that simultaneously experience a high needs-to-resource ratio or frequent low-wage receipt, emphasising the interplay between these two factors and household work intensity. High household work intensity reduces poverty persistence the most, with education identified as an important contextual factor mitigating poverty persistence. Findings suggest to reduce poverty persistence by supporting higher work intensity and regular employment in households with poverty experiences by addressing what prevents individual employment, such as upskilling or reskilling along individual strengths. Such initiatives are particularly important to decrease poverty persistence in families with children.

We examine the determinants, persistence, and dynamics of energy poverty using seven waves of the German Socio-Economic Panel (GSOEP). Employing a dynamic random effects probit model we find evidence of genuine state dependence effects in energy poverty with households being up to 7.5% more likely to face energy poverty if they were energy poor in the previous period. Energy poverty is associated with household composition, educational attainment, labour force status, energy-inefficient housing, and the heating system in place. We document common predictors of perceived and objectively measured energy poverty. Our results suggest that energy poverty in Germany is mostly a transitory state, with 78% of the energy poor households in our sample only temporarily facing energy poverty.

To explore single mothers’ labor market participation we analyze specific circumstances and dynamics in their life courses. We focus on the question which individual and institutional factors determine both professional advancement and professional descent. Due to dynamics in women’s life course identifying and analyzing restrictions and interruptions of employment requires a longitudinal research design. The German Socio-Economic Panel (1984-2009) provides all necessary information identifying episodes of single motherhood and employment during life courses. Since family statuses of single mothers are partially endogenous and can end in multiple ways, we use semi-parametric survival models. Competing risks estimations offer a detailed view by analyzing single mothers’ transition from not being employed to full-time or part-time work and vice versa simultaneously. Estimates show that occupational careers of single mothers are influenced by both individual factors and institutional circumstances. Whereas specific problems occur shortly after becoming a single mother, these problems seem to be dealt with over time. Enhancing labor market participation or maintaining full-time employment as a single mother can be achieved when certain challenges are met such as appointed and reliable working hours. Single mothers that do not have to rely on public childcare arrangements, but are capable of finding individual solutions are more likely to balance work and family life. Among institutional determinants welfare benefits have a negative effect on the market labor participation of women in low-paid jobs.

Objective: The association between a first, second, and third childbirth and in-work poverty in the short- and medium-term were assessed across age groups in the US and Germany. Background: Previous research on in-work poverty has concentrated on structural and ascriptive characteristics, while family processes - especially childbirths - received less attention. This gap was filled by adopting a processual life course approach. Method: Longitudinal data from the US and Germany were applied to between-within random effects models to estimate within-individual change in the probability of in-work poverty up to six years following a first, second, and third childbirth across age groups. Results: First, second, and third birth were associated with an immediate increase in the probability of in-work poverty (up to 10 and 5 percentage points in the US and in Germany, respectively). Among US adults aged 30 and younger probabilities increased in the medium term (from 9 to 15 percentage points for a first, 6 to 15 for a second, and 9 to 18 for a third birth), but remained unchanged for older adults in the US and all adults in Germany. Conclusion: There was no recovery in risk of in-work poverty in the medium-term following childbirth in the US and Germany. Increasing the labor market participation of adult household members via more and low-cost childcare options remains crucial. However, higher levels of income support and child benefits may be needed to avoid poverty.

Las relaciones entre el riesgo de pobreza y el empleo se han convertido en un problema de creciente interés en los últimos años. El grueso de la investigación disponible sobre este problema es de tipo transversal. El análisis dinámico de la pobreza laboral es particularmente interesante para la respuesta de varias cuestiones: ¿es el empleo suficiente para evitar la pobreza? ¿Es la pobreza laboral una situación temporal o permanente? En este trabajo se analiza la dinámica de la pobreza de los trabajadores en España; con el objetivo de conocer si las caídas en la pobreza laboral se producen solo temporalmente, si las personas caen varias veces en esta situación o si, de lo contrario, la pobreza laboral se configura como un fenómeno que produce atrapamiento y del cual es muy difícil salir. A su vez se pretende analizar los distintos perfiles de pobreza laboral en función de su duración.