2. THE DEFINITION AND MEASUREMENT OF IN-WORK POVERTY How we define and measure in-work poverty matters. Indeed, the measurement issues that arise in relation to in-work poverty are perhaps more significant than for many other social problems. This is for two reasons. The first is that measuring in-work poverty requires a two-part identification strategy, requiring us to define and measure ‘work’ and ‘poverty’ respectively. The second follows from the first: the measure that is constructed has proved to be the subject of much confusion in relation to what in-work poverty ‘is’ (i.e., the nature of the problem) and the possible policy solutions that may be adopted to tackle the problem. In a survey of international approaches, Lohmann (2018) outlines key differences between the measurement strategy utilised by the Bureau of Labor Statistics (USA), Eurostat (the statistical arm of the European Union) and the International Labour Organization (ILO). Table 1 provides a summary of information contained in Lohmann (2018, p. 12, Table 2.1), highlighting the key differences. When considering the definition of working, both Eurostat and the ILO focus on workers, while the Bureau of Labor Statistics focuses on those who are active (that is, either in work or looking for a job). In terms of the amount of work that must be performed in order to be classified as ‘working’, both the Bureau of Labor Statistics and Eurostat set the threshold at more than half of the year (to be precise, for the former it is at least 27 weeks, while for the latter it is seven or more months), while for the ILO the measure of work is broader, capturing anyone who is employed for at least one hour in the last week. The definition of poverty also varies. For the Bureau of Labor Statistics, it is based on a measure of income before taxes are deducted and before tax credits are included. This, of course, is particularly problematic given that it ignores the impact of the Earned Income Tax Credit – a prime policy instrument for tackling in-work poverty in the USA. In Europe, the income measure used by Eurostat is on a net basis – that is, after taxes have been deducted and social transfers added. In contrast, the ILO prefers a measure of poverty that is based on expenditure rather than income. One net effect of these different approaches to measurement is that one should not expect estimates which flow from one measure to be directly comparable to those preferred in another jurisdiction. Page 11