Public Benefits Cliffs Can Trap Low-Wage Workers

This Washington University study finds that nearly 22% of low-wage workers enrolled in public benefits — roughly 4 million people nationally — report limiting their own earnings or savings to preserve eligibility, a direct result of “benefits cliffs” where small income increases trigger the sudden loss of critical supports like childcare or healthcare. The researchers recommend gradual benefit phaseouts, higher asset limits, and simplified enrollment as concrete fixes. The study is co-authored by a UNC Chapel Hill researcher, giving it particular relevance for NC advocates making the case for benefits cliff reform.