“When unemployed people who receive benefits, either from the government or from private charity, are deterred from taking a new job because the reduction or removal of benefit if they do will make them worse off. Also known as the poverty trap, it can be addressed, to an extent, by continuing to pay benefit for a while to unemployed people returning to work” (The Economist).

Unemployment trap. (n.d.).  In Economics A-Z: Economic terms, topics and jargon. Retrieved October 7, 2009, from