Benefits Cliffs as a Barrier to Career Advancement for Low-Income Adults: Insights from Employment Services Providers

Alexander Ruder, Julie Siwicki, Ellyn Terry and Tamilore Toyin-Adelaja

No 2020-02, FRB Atlanta Community and Economic Development Discussion Paper from Federal Reserve Bank of Atlanta

Abstract: How do employment service providers explain benefits cliffs to clients who want to advance in their careers? To answer this question, the authors conducted three focus groups with a range of employment service providers. Focus group participants report that counselors and clients struggle to manage benefits loss because of a lack of clarity on program rules and difficulty finding appropriate jobs that pay enough to outweigh the loss of benefits. When advising clients about career advancement, counselors use a range of intake processes to determine clients’ immediate needs and assess their skills and occupational interests. Career counseling activities typically focus on short-term goals and immediate needs rather than longer-term career planning, though participants acknowledge the value of labor market information that shows the long-term gains of advancing up career pathways. The authors conclude with several recommendations to help counselors manage complex benefits eligibility rules, the short-term needs of clients who face barriers to employment, and labor market information to guide training and employment decisions.

Keywords: career change; occupational mobility; social mobility; promotion; human capital; underemployment; unskilled; vocational education (search for similar items in EconPapers)
JEL-codes: J24 J62 (search for similar items in EconPapers)
Pages: 22
Date: 2020-03-01
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DOI: 10.29338/dp2020-02

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