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USING BUDGET CONSTRAINTS TO ILLUSTRATE POVERTY TRAPS: THE CASE OF YOUNG PART‐TIME WORKERS IN AUSTRALIA

USING BUDGET CONSTRAINTS TO ILLUSTRATE POVERTY TRAPS: THE CASE OF YOUNG PART‐TIME WORKERS IN... Although much is known about the incidence of unemployment in Australia over the recent past, the causes of unemployment remain controversial. Various explanations have been advanced, some of which focus on the unemployment benefits system. The present study examines the problem of high effective marginal tax rates faced by young social security recipients wishing to engage in part‐time employment, and the resultant emergence of so‐called ‘poverty traps’. We examine budget constraints for unemployed eighteen year olds, both singles and couples, for part‐time employment in four low income occupations; namely, brickie's labourer, public service clerk, stationhand and sales assistant. The results indicate that pervasive disincentive effects exist for young people seeking low wage employment. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Australian Journal of Social Issues Wiley

USING BUDGET CONSTRAINTS TO ILLUSTRATE POVERTY TRAPS: THE CASE OF YOUNG PART‐TIME WORKERS IN AUSTRALIA

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References (13)

Publisher
Wiley
Copyright
© Australian Social Policy Association
eISSN
1839-4655
DOI
10.1002/j.1839-4655.1997.tb01060.x
Publisher site
See Article on Publisher Site

Abstract

Although much is known about the incidence of unemployment in Australia over the recent past, the causes of unemployment remain controversial. Various explanations have been advanced, some of which focus on the unemployment benefits system. The present study examines the problem of high effective marginal tax rates faced by young social security recipients wishing to engage in part‐time employment, and the resultant emergence of so‐called ‘poverty traps’. We examine budget constraints for unemployed eighteen year olds, both singles and couples, for part‐time employment in four low income occupations; namely, brickie's labourer, public service clerk, stationhand and sales assistant. The results indicate that pervasive disincentive effects exist for young people seeking low wage employment.

Journal

Australian Journal of Social IssuesWiley

Published: May 1, 1997

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