Policymakers have adopted two main antipoverty approaches in the United States. First, they have emphasized developing human capital, enabling workers to earn higher wages. Second, transfer programmes have provided a safety net for low-income citizens. This chapter advocates an alternative approach: using social insurance programmes to reduce poverty without creating negative incentives. It then looks at programmes focusing on three different age groups: (1) child allowances and paid parental leave, (2) unemployment and disability insurance and (3) old-age pensions. It finds these programmes effective in reducing poverty throughout the developed world, especially in Nordic countries with generous social insurance benefits.
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