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HHS Logo Eagle IconU.S. Department of Health and Human Services

Understanding Economic Risk for Low-Income Families: Economic Security, Program Benefits, and Decisions about Work

Overview. This project explored how workers with low incomes who receive federal benefits weigh factors such as benefit loss, ease of resuming benefits once lost, marginal tax rates, and job instability when deciding whether to accept an earnings increase. The Office of the Assistant Secretary for Planning and Evaluation (ASPE) launched the project in 2021; in 2023, OPRE partnered with ASPE to sponsor the ongoing project. Mathematica was the contractor.

Key research questions. The key research questions examined by this project include:

  1. For workers with low incomes who receive benefits, how important are each of the following factors when deciding whether accept a higher-paying job?
    1. Whether the individual would lose their benefits, and if they do, how hard it would be to resume benefit receipt
    2. Marginal tax rate (the percentage of new earnings that are eroded by lost benefits) and net income increase (the difference between the dollar value of the earnings increase and the dollar value of the benefit loss)
    3. Stability of the new job opportunity
  2. Do the factors above have different impacts for the following types of subgroups?
    1. gender
    2. presence of children in the household
    3. race and ethnicity
    4. type of program receipt (i.e., Temporary Assistance for Needy Families [TANF], Child Care Development Fund [CCDF] subsidies, Medicaid, and Supplemental Nutrition Assistance Program [SNAP])

Methods. The study team fielded a discrete choice survey experiment to assess the impact of three factors - benefit loss and ease of reinstating benefits, marginal tax rates, and job stability - on benefit recipients’ potential willingness to accept a higher-paying job. The team identified survey respondents using both a probability sample from a national panel and a non-probability sample. In total, the team conducted the survey with 1,804 current and former benefit recipients.

Respondents were asked to consider vignettes describing fictional beneficiaries faced with a decision of whether to take a job opportunity that would result in higher earnings. For each vignette, respondents were asked to decide whether the person should or should not take the higher-paying job. These opportunities varied in regard to the factors described above, allowing the study team to quantify (using a Bayesian model) the impact of each of these factors on respondents’ decisions about whether to accept the higher-paying job.

Points of contact. Nina Chien (ASPE task lead, nina.chien@hhs.gov) and Clare DiSalvo (OPRE project liaison)

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