Principles of Microeconomics / Unit 14 MIC 1304 short lesson, about 20 seconds
The Poverty Trap
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The idea
If assistance falls a dollar for every dollar earned, working brings no gain: the poverty trap. It loosens when benefits fall by less than a dollar per dollar, or with work requirements and time limits.
In practice
A fifteen-thousand guarantee makes income flat at fifteen thousand whatever the hours.
Where people slip
A slower phase-out costs more, since benefits reach higher incomes; that is the price.
Your place on the trail
Every lesson rests on earlier ones and opens later ones. Tap any to jump.
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