Working But Poor: An Analysis of In-Work Poverty Transitions in Spain

Spain has one of the highest in-work poverty rates in Europe and a high degree of job instability. Reducing in-work poverty requires an understanding of the entry and exit mechanisms specific to this situation, as well as the protective and risk factors involved. Based on data from the Spanish Living Conditions Survey (2017-2020), this paper shows that households with children are more likely to experience in-work poverty, and that in-work poverty is more persistent in these cases. That said, entry into and exit from poverty is mostly associated with employment-related events, and to a lesser extent, with changes in household composition. The concentration of in-work poverty in households with children results from a process of erosion and accumulated risks, whereby wage losses have a greater effect on the risk of poverty, and the social protection system appears to be insufficient.