The Poverty Trap

In the Spring Term you, both upper and lower sixth economists, will all move away from microeconomics and start to look at macroeconomics.  Here is a good article about how government policy on tax and benefits will affect some of the poorest households.  Refered to as the poverty trap, it occurs when households are worse off working than they are staying on benefits.  Supply-side economists would argue that this creates terrible incentives.