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Nina-Sophie Fritsch and Roland Verwiebe

In-work poverty has recently received a new degree of attention in many European countries. Picking up on this debate, the chapter focuses on Germany, Austria and Switzerland and addresses the relation between labor market flexibilization and changes in in-work poverty for dependently employed workers. Based on their analysis, the authors observe that in-work poverty has enlarged over the past 15 years in Germany and Austria for this group, whereas in-work poverty rates have slightly decreased in Switzerland. Yet what can these developments in in-work poverty be attributed to? What groups of dependently employed workers are confronted with particular risks of seeing their incomes fall below the in-work poverty threshold? Finally, they ask, what differences and similarities can be identified between Germany, Austria and Switzerland? These issues are covered by the chapter, which is based on German Socio-Economic Panel (SOEP) data for Germany, EU-SILC and European Community Household Panel (ECHP) data for Austria and Swiss Household Panel (SHP) data for Switzerland. Using regression and decomposition techniques, the authors focus their analyses on the period between 1996 and 2013. Their results show that certain groups in the German, Austrian and Swiss labor markets encounter increased in-work poverty risks. This is particularly true for young workers, migrants, individuals in lower occupational classes or for those involved in non-standard occupations, as well as employees in specific sectors; for example, in the hospitality industry. Changes in the composition of the labor market have, in part, enhanced this trend (a rise in part-time and temporary work), while counteracting it in other cases (an increase in highly qualified workers in the labor market), In general, the changing composition of the labor market has cushioned a yet stronger increase in in-work poverty rates, especially in Germany.