Combating poverty among new risk groups

Some social policies in advanced economies remain geared toward older segments of society, leaving the younger population at greater risk of poverty, according to the conclusions of a new study from the Luxembourg Income Study.

The paper looks at 18 OECD countries around the year 2004, analysing the effects of social policies on the incidence of poverty among low-skilled young women and men aged 18-30, and among those at risk of possessing obsolete skills (low-educated men aged 55-64).

Key findings

  • Active labour market policies are the most important predictor of a decrease in poverty levels among those with low skill levels.
  • The negative effect of passive labour market policies on poverty – policies providing income protection rather than directly promoting employability – is only significant for the older male group.
  • Family policies (such as childcare provision) are related to a reduction in poverty for both low-skilled young women and men.
  • Gross public social spending as a measure of overall welfare generosity is found to be associated with a reduction in poverty only of the older male group, but not that of the younger groups.

Source: Allison Rovny, The Capacity of Social Policies to Combat Poverty among New Social Risk Groups, Working Paper 605, Luxembourg Income Study

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