In a survey released this morning by Scioto Analysis, all 19 economists surveyed agreed that “benefits cliffs” caused by strict income requirements for public benefits create significant barriers to career advancement for low-income workers. The benefits cliff refers to the phenomenon where small increases in wage income can lead to large decreases in total income because people no longer qualify for benefits. For example, a low income worker might not want a raise or an increase in hours if those things would mean they no longer receive a valuable tax credit.
To address this problem, Ohio's Department of Job and Family Services announced earlier this month that they were introducing a new sliding scale for SNAP benefit levels in the state. ODJFS Director Matt Damschroder said "Fear of losing food benefits can be a deterrent to taking a new job, working more hours, or even accepting a promotion. Instead of an all-or-nothing approach, we are creating a sliding scale that encourages people to earn more by slowly reducing their benefits as their income grows. This provides an incentive to accept promotions and pay raises knowing they won’t immediately lose benefits."
When asked about this particular policy change, 13 economists agreed that the sliding scale will lower barriers to work for low-income people. The other six were either uncertain or had no opinion. As Curtis Reynolds from Kent State wrote “This should lower some barriers. More importantly, however, it would likely help people retain some SNAP benefits. Good research has shown that sharp work requirements lead some people to enter the labor market but cause a larger decrease in SNAP participation (see Harris, Timothy F. ‘Do SNAP Work Requirements Work?’)”
The Ohio Economic Experts Panel is a panel of over 40 Ohio Economists from over 30 Ohio higher educational institutions conducted by Scioto Analysis. The goal of the Ohio Economic Experts Panel is to promote better policy outcomes by providing policymakers, policy influencers, and the public with the informed opinions of Ohio’s leading economists. Individual responses to all surveys can be found here.