Ohio economists strongly agree that a sliding scale of government benefits is best • Ohio Capital Journal

This seems like it should be common sense: when you only provide benefits up to a certain, rigid level of income, it creates a cliff that disincentivizes a person from trying to earn more.

The Ohio Department of Job and Family Services recently took steps away from this approach, and a group of economists strongly agreed with the move.

Previously, Ohioans were eligible for the state’s Supplemental Nutrition Assistance Program (SNAP) only if their income was 130% or less of the federal poverty level. For a family of four, that’s $40,560.

Earlier this month, the Department of Jobs and Family Services adjusted that provision, reducing food stamp benefits on a sliding scale until a family reaches 200% of the federal poverty level, or $62,400 for a family of four.

“Fear of losing food benefits can be a deterrent to taking a new job, increasing work hours, or even accepting a promotion,” ODJFS Director Matt Damschroeder said in a statement announcing the change. “Instead of an all-or-nothing approach, we are creating a sliding scale that encourages people to earn more by gradually reducing their benefits as their income rises. This provides an incentive to accept promotions and pay increases knowing they won’t immediately lose benefits.”

A group of Ohio economists seemed to strongly agree, according to a poll released Oct. 28. They were asked about “benefit cliffing,” which is providing benefits at a certain level and then abruptly cutting them off once an income threshold is reached.

When asked whether benefit shocks “caused by strict income requirements for government benefits create serious barriers to career advancement for low-income workers,” all 19 economists agreed, according to a survey conducted by Scioto Analysis.

“People make the economically rational decision, at least in the short term, to forgo a raise or promotion, resulting in the loss of a much larger social benefit,” Regionomics’ Bill Lafayette said in the comments section of the survey.

Economists were somewhat more mixed when asked whether the changes adopted by ODJF would “reduce barriers to work for low-income people.”

Thirteen agreed and six were unsure or had no opinion.

“Closing the benefits cliff is an effective policy that reduces barriers to work,” writes Kevin Egan of the University of Toledo. “Furthermore, phasing out SNAP benefits is a fair policy change to ensure no household is left in this unfair position.”

But Kay Strong, an independent economist, says barriers to work go far beyond the benefits cliff.

“Barriers to employment for low-income workers are not just on the supply side,” she said. “Employers create barriers through the selection of workers, the scheduling of workers, and the willingness to help employees despite the occasional personal obstacle that gets in the way of workers.”