The Cliff Effect
Circles USA has chapters in more than 20 states that bring community volunteers into partnership with families who are committed to getting out of poverty. In 2014, the Circles network was asked what is the biggest barrier to getting out of poverty. The answer was unequivocally the Cliff Effect that is built into assistance programs. The Cliff Effect occurs when assistance programs like childcare subsidies and Medicaid remove benefits faster than people can earn enough income to replace them. By not pro-rating the exit ramp to these programs, the government creates a financial crisis for people as they earn more income.
Cliff Effect Resources
• PULSE REPORT: Outlining the Disincentives and Opportunity Costs for Working Mothers
Cliff Effect Demonstration