Safety Net Program Interactions and Impacts on Low-Income Families.

• Author: Schmidt, Lucie

The US safety net is a patchwork of interacting programs providing cash and in-kind transfers to low-income individuals and families. Our research investigates how these programs interact with one another and how the generosity of the full safety net package affects well-being, taking into account these interactions.

The United States has a long history of federalism in its means-tested tax and transfer programs, as in other domains. The safety net includes a number of federally funded or partially statefunded programs with rules surrounding eligibility and generosity that vary at the state level. Among programs offering cash assistance, Temporary Assistance for Needy Families (TANF), which provides cash transfers and other supports to low-income families with children, is one in which states have particularly wide latitude to determine parameters. Supplemental Security Income (SSI) is a federal transfer program for lowincome individuals with disabilities, but some states supplement the federal benefit with additional payments. Similarly, the Earned Income Tax Credit (EITC) is a federal refundable tax credit for lowincome working households, and more than half of states offer additional EITC support through the state income tax code. The upshot is that similarly situated families may end up receiving different levels of cash transfers depending on the state in which they live.

In-kind safety net programs also exhibit differences across states. For example, the Supplemental Nutrition Assistance Program (SNAP, formerly known as the food stamp program) has consistent eligibility and benefit formulas across the continental United States, but benefit amounts are affected by statevarying cash transfer program generosity. The Medicaid program (including the Children's Health Insurance Program, or CHIP) has varying income eligibility thresholds for public health insurance across states, partially driven by differential state expansion of eligibility under the 2010 Affordable Care Act (ACA).

Safety Net Generosity and the Relationships between Programs

Though each major safety net program has unique eligibility rules, there is considerable overlap in participation across programs, due in part to the fact that safety net programs target partially intersecting low-income populations. In addition, participation in one program may directly affect eligibility for others: recipients of one program may be categorically eligible for another program, or transfers received from one program may count as income in determining eligibility and benefits for another program. Programs may also incentivize or disincentivize labor supply, thereby affecting income and eligibility for other programs. Furthermore, the act of applying for one program may lower the information or transaction costs associated with applying to other programs, which may impact take-up conditional on eligibility.

Figure 1 illustrates the 2016 participation in major safety net programs for a sample of single-mother families in which the mother has a high school degree or a lower level of education. For participants in each program, we show the conditional participation in other programs reported in the Current Population Survey (CPS), as well as the probability of participating in none of the other programs considered. (We assume 100 percent take-up conditional on imputed eligibility for the refundable tax credits, EITC, and the Additional Child Tax Credit (ACTC), because the CPS does not report take-up for taxrelated benefits.) Among...