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Poverty Trap

A situation in which there is little incentive for workers earning a low income to earn extra income, because it would result in having to either pay higher tax and/or losing some of their benefit payments.

The low-income poverty trap refers to the phenomenon in which people living in poverty have difficulty escaping poverty because of structural barriers that prevent them from earning enough income from a job to meet their basic needs. These barriers can include lack of access to education and training, lack of affordable housing and transportation, lack of affordable childcare, and discrimination in the labour market.

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