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Sunday, January 15, 2017

Disability Assistance Programs Disincentivize the Working Poor

Disability-assistance programs discourage work by conditioning assistance on limited or no work.

A recent blog post by the Hamilton Project describes the poor population (as defined by the official definition of poverty, which does not include many government benefits) as mostly children, the elderly, the disabled, working people, or caregivers. The intimation is that policies designed to increase work (for example, addressing work disincentives and imposing work requirements in benefit programs) may not have much of an impact. The blog post concludes:

As with our analysis of poverty in 2014, this update suggests that when poor working-age adults are not employed full-time, they are often disabled, receiving education, or engaged in caregiving.”

Consistent with these findings, in a report last year, I found that most poor adults who do not work say that they are disabled or caring for family (57%). Similarly, among poor children, I found that only 32.8% lived with a full-time, working parent and the most common reason parents gave for not working was caring for children.

But the assumption that these poor adults either do not want to or cannot work deserves a more serious look. According to data from the Bureau of Labor Statistics, 10.7% of disabled adults age 16 and older in 2015 were unemployed, meaning that they wanted and looked for a job but were unsuccessful. This compared to an average of 5.3% for the general 16 and older population. Moreover, among the disabled, 30.7% of 16 to 19 year olds, 20.3% of 20 to 24 year olds, and 16.1% of 25 to 34 year olds were unemployed in 2015 – higher than almost any other demographic group.

Most parents in this country also work, and the assumption that work is not desired by low-income parents is untrue. According to a 2013 Pew study:

Among women who say they “don’t even have enough to meet basic expenses,” about half (47%) say the ideal situation for them is to work full time. Among unmarried mothers, about half (49%) say working full time would be their ideal. This is up dramatically from 26% who said the same in 2007.”

But our public policies actually work against people with disabilities and low-income parents who want to work. Disability-assistance programs discourage work by conditioning assistance on limited or no work, and government tries harder to move people onto assistance rather than helping them with employment. And a lack of childcare assistance for the lowest-income families (only one-third of poor, eligible-families receive assistance) likely contributes to low work levels among poor parents.

Rather than discounting a large share of poor individuals and families as incapable of work, policy efforts need to focus more intently on helping those individuals who may prefer employment were it not for bad public policies.

Reprinted from American Enterprise Institute.

  • Angela Rachidi is a research fellow in poverty studies at the American Enterprise Institute (AEI), where she studies poverty and the effects of federal safety net programs on low-income people in America.