Employment, Poverty and Globalization
Edited by Hans-Jürgen Andreß and Henning Lohmann
Chapter 1: The Different Faces of In-Work Poverty Across Welfare State Regimes
19 Development (OECD) countries. Their study analysed male wage inequality in the USA and in nine other OECD countries (Germany, Britain, Austria, Switzerland, Sweden, Norway, Australia, Hungary, Italy and Norway). They argued and demonstrated that labour market institutions – principally the comparatively decentralized wage-setting mechanisms in the USA – provide the most persuasive explanation for these patterns. Many other studies have tried to demonstrate that wage-setting institutions are associated with pay inequality, particularly changes in the distribution of pay (see, for example, Kahn, 2000; Lucifora, 2000). In addition to earnings, transfers represent a relevant part of the income package in working households. In France, for instance, more than onethird of the income of working poor households consists of transfers (Lagarenne and Legendre, 2000). Furthermore, a number of studies have shown that there are large diﬀerences between welfare states in the degree of poverty reduction which is achieved via transfers (see, for example, Atkinson et al., 1995; Moller et al., 2003). There is not as much speciﬁc evidence showing to what degree in-work poverty is reduced by transfers, although there is a broad discussion of so-called in-work beneﬁts (see OECD, 2005). However, there is evidence that in-work poverty is not only aﬀected by in-work beneﬁt programmes which are meant to supplement low earned incomes. Even in the UK – which has a long history of paying in-work beneﬁts – other types of transfers are a more important factor for the reduction of poverty among workers with low incomes (Gardiner...
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