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Armando Barrientos and Vidhya Unnikrishnan

In-work poverty is widespread in low- and middle-income countries. This chapter examines the relationship between in work poverty, poverty and social assistance in developing countries. Low- and middle-income countries have experienced a sharp decline in poverty and in-work poverty in the last two decades, but in South Asia and sub-Saharan Africa the reduction of in-work poverty has lagged behind the decline in poverty. There is a strong correlation between in-work poverty and informality, rural location and work in agriculture. The expansion of social assistance programs in low- and middle-income countries has contributed to the decline in global in-work poverty. In theory, they could also contribute to higher in-work poverty to the extent that they encourage informal employment. High incidence of in-work poverty highlights the limitations of current development policy. In order to reduce in-work poverty it is important to share the benefits from economic growth with the disadvantaged groups. Policies aimed at sustained economic growth, investment in human development, and strengthened social protection will be effective in addressing in-work poverty.