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The analysis presented in this paper considers the impact on poverty rates of the Labour government�s tax and benefit policy changes in combination with the introduction of the National Minimum Wage (NMW). It examines the contribution of the NMW to direct poverty reduction and to �making work pay�. It concludes that the main contribution made by the NMW to poverty reduction at the household level is probably through its role in underpinning the operation of in-work top-up benefits.
Holly Sutherland (2001) studied this question.