Source: The Daily Economy
by Vladimir Snurenco
“Benefit cliffs occur when earning slightly more — through a raise or extra hours — leaves people worse off because they lose government benefits. Many economists believe these cliffs can be ‘smoothed out’ through better program design. But this view overlooks a critical factor: human psychology. To truly address benefit cliffs, policymakers must move beyond formulas and graphs and consider how people actually think, feel, and behave. In some cases, benefit cliffs may not just be hard to eliminate — they may be impossible to fully remove.” (07/01/25)