ABSTRACT

This chapter attempts to evaluate the evidence from the international literature concerning the effects of social security benefits on work incentives. This is a part of the wider debate regarding the effects of social security benefits on human behaviour. The chapter attempts to examine the twin notions of 'underclass' and 'dependency culture' as they are intrinsically linked to the work incentives of benefit claimants. The notion of 'dependency culture' has been widely used to describe the labour supply behaviours of different groups of benefit claimants namely, the unemployed, old age, disabled and lone parents. The low labour participation rates of the long-term unemployed and of lone mothers are largely structured by the welfare system and employment policy of the state. The social security policy overlooks the fact that unemployed people being a trade-off between the financial risks of moving off benefit and into work.