Welfare Cliffs in the United States The concept of a “welfar…
Welfare Cliffs in the United States The concept of a “welfare cliff” occurs when a slight increase in an individual’s income leads to a disproportionate loss in benefits, making it financially disadvantageous to accept higher-paying jobs or work more hours. This can trap individuals in a cycle where accepting advancements can seem counterproductive. Question: How does the welfare cliff contribute to the poverty trap for individuals receiving government assistance? A) It can create a disincentive to earn more because the loss of benefits may outweigh the increase in income. B) It encourages individuals to work fewer hours. C) It leads to a significant increase in take-home pay. D) It simplifies the tax code to encourage higher earnings.