It Pays to Work: Work Incentives and the Safety Net

This report from the Center on Budget and Policy Priorities provides evidence to dispute the idea that low-income assistance programs discourage work. Critics of assistance programs argue that people receiving assistance get more money from not working and receiving government benefits than they would from working. The authors found that working is almost always more financially beneficial than not working. Workers in poverty have a greater incentive to work more hours or at higher wages than other workers, since their marginal tax rate is lower. Even workers just above the poverty line still gain substantially from working additional hours. Work pays because social safety net programs have changed over the past two decades to reduce benefits for people who are not working, while increasing tax credits for people who are working.