Poverty Trap (Noun)
Meaning
A situation in which an increase in income results in a loss of benefits so that you are no better off.
Classification
Nouns denoting natural processes.
Examples
- The welfare system had created a poverty trap that discouraged people from working harder to improve their circumstances.
- Many low-income families remain stuck in the poverty trap, where increased earnings are offset by reduced government assistance.
- She was afraid to take on extra work because it would push her into a higher tax bracket and trigger a reduction in her benefits, effectively keeping her in the poverty trap.
- For those on government assistance, the poverty trap can be nearly impossible to escape due to the steep penalties imposed when attempting to climb the income ladder.
- The new tax reform aimed to eliminate the poverty trap by offering targeted support to low-income families while incentivizing them to increase their earnings.