Inclusive Economy Lab Illinois Benefits Cliffs

In mid-2020, the Illinois General Assembly passed the Intergenerational Poverty Act, a bold proposal to end intergenerational poverty by 2036. The legislation created a Commission on Poverty Elimination and Economic Security tasked with carrying out rigorous research on poverty and developing a portfolio of policies to stimulate intergenerational mobility in the state.

The University of Chicago Inclusive Economy Lab partnered with the Illinois Department of Human Services (IDHS), a lead agency within the Commission, to identify who is experiencing poverty in Illinois and to better understand the structural barriers that preclude economic mobility. Notable among these barriers are benefits cliffs, which occur when increases in income trigger a loss of public assistance that can leave families worse off financially. Benefits cliffs exist in the majority of public assistance programs and continue to be a deterrent to wage growth and wealth creation for many families across the United States.

In this policy brief, we analyze the benefits cliff produced by the phaseout of the Child Care and Development Fund (CCDF) subsidy, one of the largest benefits cliffs in Illinois and across the country.

Read the policy brief here.

Exploring Benefits Cliffs in Illinois: CCAP as a Case Study