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Mainstream economic models assume people are rational. If those in poverty know they won't gain any advantage from working, they're incentivised to continue with government assistance.
When fewer people take on new jobs, the economy slows down, keeping people in poverty.
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Countries have tried various ways to circumvent the problem.
Some poverty traps are connected to a person's circumstances, such as lack of access to healthy food or education. Others affect entire nations, such as cycles of a corrupt government.
The irony of welfare traps is that they are the result of policies designed to fight poverty
Imagine you're out of work and a government benefit program helps you with your basic needs, such as rent, utilities and food.
When you finally get a job, you feel things are turning around, except that you are now disqualified from the benefit program and don't earn enough to cover the sa...
This life is what you make it.
Governmental welfare programs inadvertently reinforce generational poverty. Here’s how they attempt to fix it.
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