IntroductionMeans-tested benefits are designed to support basic needs such as food, health insurance, and child care for households with low incomes. When considering whether to take a new job opportunity that will increase their income, recipients of these benefits may be forced to consider trade-offs. For example:
Marginal Tax Rates & Program Cliffs
Reports
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Advanced SearchFact Sheet, Policy Brief
Understanding Economic Risk for Low-Income Families: Economic Security, Program Benefits, and Decisions about Work
This project explored how workers with low incomes who receive federal benefits weigh factors including marginal tax rates, benefit loss, ease of resuming benefits once lost, and job instability when deciding whether to accept an earnings increase.
Fact Sheet, Visualization
Earnings, Benefit Loss, and Job Instability: What Do People Receiving TANF Consider When Offered a Higher-Paying Job?
Infographic: Earnings, Benefit Loss, and Job Instability: What Do People Receiving TANF Consider When Offered a Higher-Paying Job?Related Products:
ASPE Issue Brief
Helping People with Low Incomes Navigate Benefit Cliffs: Lessons Learned Deploying a Marginal Tax Rate Calculator
This project developed a calculator to help people anticipate how a change in earnings from employment would affect their net income, and in so doing, provide public benefit recipients with their estimated effective marginal tax rate on new earnings.
Key Points:
Research Brief
Risks that Come with Increasing Earnings for Low-Income Workers Receiving Safety Net Programs: Perspectives of Working Parents
In focus group discussions with 44 working parents receiving assistance from one or more federal programs, many parents shared the view that increasing earnings involves a number of risks. Participants described the sequence of possible risk events as follows: