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Using NCCP’s Family Resource Simulator to Improve Policies for Low-Income Families
Nancy K. Cauthen, PhD
Acting Deputy Director
NGA Center for Best Practices: Annual Retreat for Governors’ Human Services Policy Advisors
June 14, 2005
www.nccp.orgwww.nccp.org
Who We Are
• NCCP is a nonpartisan research and policy organization at Columbia University.
• We use research to identify strategies to reduce child poverty and to improve the lives of low-income families and their children.
National Center for Children in Poverty
www.nccp.orgwww.nccp.org
NCCP’s Family Resource Simulator
Why We Developed the FRS
In the late 1990s, there was an increased focus
on issues facing low-income working families…
www.nccp.orgwww.nccp.org
Why We Developed the FRS (cont.)
• More research about the inadequacy of the official poverty measure and what it actually takes to make ends meet.
– WOW’s Self-Sufficiency Standards
– EPI’s Basic Family Budgets
NCCP’s Family Resource Simulator
www.nccp.orgwww.nccp.org
Why We Developed the FRS (cont.)
• More research on policies that encourage and reward work (e.g., EITC, child care subsidies).
• Concern that cliff effects and high marginal tax rates mean that working more does not always improve a family’s financial well-being.
NCCP’s Family Resource Simulator
www.nccp.orgwww.nccp.org
Why We Developed the FRS (cont.)
Our Questions:
1. How do public benefits impact the ability of families to make ends meet as their earnings increase?
2. How well do existing policies—and combinations of policies—reward employment? How could they be improved?
NCCP’s Family Resource Simulator
www.nccp.orgwww.nccp.org
What the FRS Is
• An interactive, web-based tool that shows the aggregate impact of federal, state, and local policies on family resources and expenses as earnings increase.
NCCP’s Family Resource Simulator
www.nccp.orgwww.nccp.org
What the FRS Does
It demonstrates the interaction of:
• Earnings• Public benefits (cash and in-kind)• Taxes• Basic expenses
NCCP’s Family Resource Simulator
www.nccp.orgwww.nccp.org
NCCP’s Family Resource Simulator
Includes These Public Benefits
• Child care subsidies
• Food stamps
• Public health insurance
• Section 8 housing vouchers
• TANF cash assistance
www.nccp.orgwww.nccp.org
NCCP’s Family Resource Simulator
Includes These Tax Policies
• Federal, state, and local income taxes
• Federal income tax credits (EITC, child/dependent care credit, child tax credit)
• State and local income tax credits
• Federal payroll taxes
www.nccp.orgwww.nccp.org
NCCP’s Family Resource Simulator
Includes These Expenses
• Child care
• Food
• Health insurance
• Housing
• Transportation
• Other necessities
www.nccp.orgwww.nccp.org
NCCP’s Family Resource Simulator
How the FRS Works
The user creates a hypothetical family. Makes
choices about:
• City and state
• Family characteristics
• Child support income
• Assets
• Debts
www.nccp.orgwww.nccp.org
NCCP’s Family Resource Simulator
How the FRS Works (cont.)
The user also:
• Selects which public benefits the family receives when eligible.
• Makes choices about family expenses—including what happens when the family loses benefits.
www.nccp.orgwww.nccp.org
How the FRS Can Be Used
1. To calculate the level of resources available to families as earnings and public benefit receipt change.
NCCP’s Family Resource Simulator
www.nccp.orgwww.nccp.org
Hartford, CT: Single-Parent Family of 3Receiving All Benefits
www.nccp.orgwww.nccp.org
Boston, MA: Single-Parent Family of 3 Receiving All Benefits
www.nccp.orgwww.nccp.org
How the FRS Can Be Used (cont.)
2. To determine how much parents need to earn to cover basic expenses, taking public benefits into account.
NCCP’s Family Resource Simulator
www.nccp.orgwww.nccp.org
Atlanta, GA: Two-Parent Family of 4 Receiving Food Stamps, Public Health Insurance, Federal Tax Credits
www.nccp.orgwww.nccp.org
How the FRS Can Be Used (cont.)
3. To illustrate how well state policies encourage and reward employment and to indicate where improvements are needed.
NCCP’s Family Resource Simulator
www.nccp.orgwww.nccp.org
Chicago, IL: Single-Parent Family of 3 Receiving All Benefits Except Housing Vouchers
www.nccp.orgwww.nccp.org
Baltimore, MD: Two-Parent Family of 4 Receiving Food Stamps, Public Health Insurance, Federal Tax Credits
www.nccp.orgwww.nccp.org
States Available at www.nccp.org
Alabama Illinois
Connecticut Maryland
Delaware Massachusetts
District of Columbia Pennsylvania
Georgia
NCCP’s Family Resource Simulator
www.nccp.orgwww.nccp.org
States in Progress
New York
Texas
The Family Resource Simulator has been generously funded by the Annie E. Casey Foundation.
NCCP’s Family Resource Simulator
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