Social benefits and risk of poverty in the working-age population: An analysis of the composition of household income in Spain

In the second decade of the 21st century in Spain, the relationship between poverty and labor participation has attracted growing interest due to the higher risk of poverty among the working -age population compared to the non -working population. The primary objective of this article is to analyze the poverty risk of working -age households in the country. The study describes poverty risk as a function of labor intensity and income composition and examines the effect of social benefits and other household characteristics on poverty reduction. To this end, microdata from the 2019 European Union Survey on Income and Living Conditions (EU-SILC) are used. The results show that the combination of labor income and social benefits constitutes one of the main strategies to avoid the risk of poverty: contributory benefits exert a greater effect due to their generosity and relation to previous employment history, underscoring the importance of employment and reflecting low progressivity. Conversely, family allowances and transfers from the minimum income system exhibit reduced effects, suggesting the need to reassess the design and amount of these benefits. In addition, household characteristics appear to be a key explanatory factor for analyzing poverty given that low labor intensity and the presence of children are associated with higher risks.