The head of a low-income family is given the opportunity to earn extra money for the household by working additional hours full time. However, the boost to household income is reduced by an increase in income tax and health insurance deductibles. This is an example of ______.

Question

Quizplus · Accepted Answer

A poverty trap occurs when an increase in income leads to a situation where the benefits gained are offset by increases in costs or losses, such as higher taxes or health insurance deductibles, making it difficult for individuals or families to escape poverty.

The Head of a Low-Income Family Is Given the Opportunity