In-Work Poverty and COVID-19

The concept of in-work poverty (IWP), which is relatively new, reflects the unusual combination of (individual) employment and (household) income poverty. The phenomenon was tracked worldwide, in both developed and developing countries, and gained particular attention following the proclamation of the European Pillar of Social Rights (2017). It recognized the right of workers to wages that allow for a decent standard of living and satisfaction at both the individual and the household level. IWP then regained attention during the COVID-19 pandemic that began in 2020. The effects of this shock impacted both the definition of IWP (and its measurement) and its prevalence. This chapter critically discusses the definitions of IWP and the associated measurement issues. This is especially important in relation to COVID-19 due to the implications of the shock for the definition of employment and its effect on household income. Some calculations and comparisons across definitions of IWP are offered. The chapter also provides a review of the relationship between IWP, COVID-19, and working from home, which was one of the measures introduced and sometime enhanced to minimize the spread of the disease. A discussion of the employment, sectoral, occupational, and demographic characteristics of IWP is provided, pinpointing the effects of the shock. This is highly relevant as the effects of COVID-19 were heterogeneous according to employment characteristics and across sectors and occupations. Moreover, a description of labor market institutions, public programs, and social expenditure associated with the phenomenon of IWP and COVID-19 is offered. The chapter concludes by presenting a summary of the issues reviewed and investigated.