Benefit Cliffs Can Undermine Workers’ Efforts To Get Ahead, Researchers Say
Posted by Spotlight on Poverty and Opportunity on November 3, 2026
For low-wage workers, earning more money can sometimes mean losing public benefits that help pay for food, housing, health care and child care. These “benefit cliffs” can leave families worse off financially despite working more hours or taking a higher-paying job. During a webinar hosted by the Institute for Research on Poverty at the University of Wisconsin-Madison Wednesday—and featured in this Spotlight Exclusive—researchers examining the effects of benefit cliffs said the problem is complicated. Although the most extreme cases, in which workers lose virtually all the gains from additional earnings, may be less common than some estimates suggest, benefit rules and administrative hurdles can still discourage work and undermine families’ financial stability. “Benefit phase outs do matter for low-income households,” said Matthew Unrath, an assistant professor at the University of Southern California’s Sol Price School of Public Policy, “Stacking these benefits on top of each other, even when folks aren’t paying much in the way of federal income taxes, really can serve as a work disincentive.”
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