The mitigation of the cliff effect is essential to effectively foster economic mobility and to address systemic racism facing low-income mothers in Allegheny County. The Pittsburgh Foundation’s report A Qualitative Study of Single Mothers in Allegheny County: A 100 Percent Pittsburgh Project revealed that 41% of single mother households earn below the poverty line. The report found that the cliff effect – the reduction of public benefits resulting from wage increases – presented a significant barrier to escaping poverty.
This report explores cliff effects in Allegheny County, Pennsylvania. First, simulations were conducted to better understand the nature and types of benefit cliffs experienced by single women with children in Allegheny County. Only one simulation – the unlikely scenario where a family receives a full package of benefits – showed families making ends meet across all wage levels simulated. Four different types of financial situations were identified: actual loss of benefits (cliff), fear of benefit cliff, slow intermittent progress, and running in place. Next, to gain a better sense of the scope of the cliff effect in Allegheny County, an estimate of the number of single mother families who are at risk of benefits cliffs is derived. We estimate that 23,537 single mother families who access Pennsylvania Department of Human Services benefits are at risk of experiencing a real or perceived benefit cliff. Further, 11,010 single mother households access housing assistance in Allegheny County, and thus experience the “running in place” financial situation when their earnings increase. Third, a scan of efforts to address benefit cliffs is provided, including an analysis of how solutions map to financial situations of low-income families. Finally, policy and capacity building recommendations are offered to mitigate the cliff effect in Allegheny County.
The research and policy scan were completed prior to the Covid-19 pandemic. Nevertheless, the findings on the intersection of wages and benefit programs and recommendations remain valid assuming temporary policy measures are not extended beyond the pandemic.
Crandall, Susan; Beauregard, Brian; Eng, Sokha; and Karakilic, Emek, "Exploring Financial Situations and the Cliff Effect for Single-Mother Families in Allegheny County, Pennsylvania (Working Paper)" (2021). Center for Social Policy Publications. 87.