Work

The Welfare versus Work Paradox

Year: 2025

Type: article

Abstract: How can countries balance work incentives and access to welfare without violating the principle that work shall always be strictly preferred to welfare? In a context in which wages stagnate or drop, and benefit levels are reduced due to austerity measures, the welfare versus work paradox arises. This research shows analytically that when both wages and benefits approach the subsistence level, welfare becomes preferable to work, violating the work incentive principle. The policy implication of this result is that, to maintain the validity of the work incentive principle, minimum wages must be kept above the subsistence threshold.

Source: PLoS ONE

DOI: 10.1371/journal.pone.0321564

Author: Roberto Iacono

Institutions: Norwegian University of Science and Technology, London School of Economics and Political Science

Language: English

Topic: Social Policy and Reform Studies

Subfield: Political Science and International Relations

Field: Social Sciences

Domain: Social Sciences

SDGs: Decent work and economic growth, Reduced inequalities, No poverty

Open Access status: gold

Estimated APC paid: $2,382