POVERTY Discussion Group

Posts relating to POVERTY, giving an opportunity for general discussion to help with Continuous Professional Development.

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Why has in-work poverty risen?

In Britain, the headline relative in-work poverty rate steadily rose from 13.4% in 1994–95 to 18.4% in 2019–20. In the latest data (covering 2023–24), the in-work poverty rate stood at 18.0%.

In this article the Institute for Financial Studies (IFS) summarises a new research paper, published in the Oxford Bulletin of Economics and Statistics, which explains why the in-work poverty rate increased in the quarter-century prior to the pandemic.

Surprisingly, the effect of tax and benefit reforms between 1994–95 and 2010–11 was to reduce in-work poverty by 2.5 percentage points. Reforms over the 2010s – when benefits and taxes were both cut – increased in-work poverty by 1.9 percentage points.

The trouble with understanding issues like "relative" poverty is that increases in the income of a non-working group like pensioners can push up the "relative" poverty line.

The figures don't reflect recent changes in the…