§ Mr. Worthington
To ask the Chancellor of the Exchequer what evidence he has that disincentive to work results from the poverty and unemployment traps.
§ Mr. Portillo
[holding answer 26 October 1987]: I have been asked to reply.
There is little doubt that the poverty and unemployment traps can influence decisions on work. In particular, the academic literature suggests that benefit levels can affect the time spent unemployed and that tax rates influence hours of work. The degree of such influence is a matter of continuing academic debate, but in general it appears that it varies according to a number of factors including age, gender and marital status. Up-to-date 71W information on some of these issues will be obtained from a study the Department is currently conducting of people who became unemployed in the spring of 1987.