Does Work Pay? An Analysis of the Work Incentives under TANF

Gregory P. Acs

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Gender, Labor, and Family Dynamics Labor market dynamics and wage inequality Social Policies and Family

Abstract

This analysis finds that working 20 hours per week at minimum wage increases income by an average of 50 percent over cash assistance in the 12 states studied. Public Policy contributes much to making work pay. The interaction of programs such as the Earned Income Tax Credit, and state decisions on cash benefits, earnings disregards, Food Stamps, access to child care, and health insurance create powerful economic incentives to work.

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