No one-size-fits-all solution. Effects of social policies on in-work poverty.

The paper studies effects of social policies on in-work poverty risks, distinguishing between measures that either intervene in labour market processes -- i.e. predistribution policies -- or redistribute incomes towards those with low incomes. I argue that effects of different policies can be expected to vary across household contexts, due to the fact that the link between individual employment outcomes and in-work poverty is moderated by household type. The analyses uses data from EU-SILC and macro-level indicators from various sources to estimate general as well as household-type-specific effects using longitudinal methods. Results emphasize that labour market interventions and redistributive transfers impact in-work poverty risks through different mechanisms and also reveal important differences between specific policies: minimum wages contribute to reducing low-wage risks, whereas effects on in-work poverty are small and mainly restricted to single households where labour market outcomes and household income closely align. In contrast, there is a robust negative effect of strict employment protection legislation across almost all household types on in-work poverty, which is consistent with the positive role this measure plays for supporting higher earnings. With respect to redistributional policies, both unemployment benefits and benefits to low earners reduce poverty due to their contribution to public poverty-reduction. However, whereas unemployment benefits mainly reduce in-work poverty among couple households, benefits to low earners are the most effective measure to contribute to lower poverty risks among employed single parents.