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Poverty Trap /'pä-vur-tê · 'trap/
An economic phenomenon whereby low-wage workers are unwilling to work themselves out of poverty because of the loss of government assistance. The poverty trap occurs during the “phase-out” range for benefits such as the EITC, food stamps and Section 8 housing. Workers face a disincentive to increased labor force participation because they will only realize a small portion of their increased income.
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