Opportunities and Disincentives on the Road to Economic Independence

HRD-93-23: Published: Aug 6, 1993. Publicly Released: Aug 6, 1993.

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Pursuant to a legislative requirement, GAO examined how housing and social service policies affect beneficiaries receiving public assistance when they gain employment and experience an increase in income.

GAO found that: (1) the amount of income required to become economically independent varies greatly across programs and states; (2) only a small proportion of families with incomes below the poverty line remain poor or receive public assistance for long periods of time; (3) the rate of recidivism shows that even when families earn enough to become economically independent, their income may not be stable enough for them to become truly self-sufficient; (4) long-term beneficiaries of housing programs tend to be families headed by women; (5) training and employment programs are moderately effective in increasing the earnings of economically disadvantaged persons; and (6) as Aid to Families with Dependent Children (AFDC) benefit levels increase, there is a small decrease in the average hours of work by AFDC recipients.

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