Work Requirements - An Ineffective Policy

Work requirements are often touted as a remedy to prevent the misuse of benefits. Instead, they only end up harming those who are most in need.

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Work requirements are stipulations incorporated into public assistance programs that necessitate individuals to engage in specific work-related activities to qualify for benefits from these programs. The primary justification for including work requirements in benefit programs is to motivate individuals to seek employment instead of depending on the assistance program.

Photo by Wesley Tingey on Unsplash

Many countries have different forms of work requirements. In the US, the Republican government recently passed additional work requirements on certain federal assistance programs, namely SNAP (Supplemental Nutrition Assistance Program) , which assists needy families with the purchase of food, and Medicaid (health insurance assistance for low income individuals/families).

As with any economic or social issue, we can ask – what is the impact of work requirements and do they achieve their aims?

Economic Treatment of Work Requirements

The topic of work requirements was best theoretically described by Besley and Coate (1992). A fundamental principle taught in nearly every introductory economics course is that individuals respond to incentives. In line with this, economic theory posits that if people receive certain benefits, such as money for food, below certain income thresholds,it may discourage them from seeking employment. The rationale is that when they start working and make sufficient income, they will no longer be eligible for the food assistance program. Therefore, they might try to ‘game’ the system by not working at all, as then they will receive the benefit. This is referred to as the screening issue of welfare programs – ensuring that the right individuals receive the benefit.

Another reason for work requirements is what Besley and Coate refer to as the deterrent effect. This issue focuses on the reason why individuals need assistance – is it due to circumstance and bad luck, or is it due to specific choices made during the individual’s life. If it is the latter, the concern is that individuals might not have incentives to prevent themselves from falling into poverty since they will receive benefits that will assist them. Work requirements render these benefits 'less appealing' since effort is still necessary to obtain assistance. Consequently, this will deter individuals from falling into poverty.

It is worth noting, and Besley and Coate stress this point as well, that the screening and deterrent effects are only described in terms of income and not utility (also known as welfare). The difference is that utility incorporates both income and leisure – work requirements will undoubtedly diminish leisure, which in turn reduces utility. However, the lens through which work requirements are usually assessed are via income, not utility. 

The Besley and Coate model gives many theoretical results about when work requirements are beneficial and when they are not. Interestingly, their theoretical results typically suggest that it is optimal to have either no work requirements whatsoever or exceedingly high work requirements. Which of the two policies is optimal depends on what factors are easily observable, such as a person’s earnings and ability. 

Beyond theoretical considerations, what does the data tell us about work requirement impacts?

Work Requirements – The Data

One of the most recent studies to look at work requirements for SNAP recipients was done by Gray et al. (2021). Prior to discussing the findings of their analysis, it is crucial to explain the challenges associated with assessing the impact of work requirements.

Data Reliability Issues

Most previous studies that looked at the impact of work requirements used survey data. As we discussed previously, survey data has a lot of issues, including lack of incentive to respond honestly, lack of responses, or individuals failing to participate in follow up surveys.

Another challenge is determining what is the appropriate sample of individuals to be studied. For instance, focusing only on individuals that receive the SNAP benefit already, excludes all individuals that are eligible for the benefit. Moreover, individuals might pre-emptively react prior to the implementation of work requirements and increase their labor in order to not lose access to the benefit. Thus, depending on the timing of the study, we might wrongly assume that people aren’t responding to work requirements, but that’s because they already have responded by increasing how much they work. Some have argued that this is why the economic literature has not found many benefits of work requirements, such as this analysis by Rachidi and Doar at the American Enterprise Institute. 

Resolving Data Reliability Issues

Gray et al. deal with these issues by following a specific set of individuals over multiple years. Prior to 2009, the state of Virginia had a work requirement for SNAP participation for able-bodied adults without dependents (ABAWDs) below the age 50. After the age of 50, the work requirements were less stringent. Due to the Great Recession of 2008, the Federal Government suspended state work requirements. From 2009 to 2013, work requirements for SNAP eligibility were suspended. All ABAWDs that were enrolled in SNAP during this time were the sample of individuals Gray et al. analyzed. As there were no conditions, besides being low income, this is a good proxy for all individuals that would choose to enroll into SNAP.¹ After 2013, the work requirements were reinstated by Virginia.

Since the sample of individuals that used SNAP is thorough given anyone below a certain income could participate, the reinstatement of work requirements will allow us to determine how these individuals respond to the change in laws. Do they work more? Do they drop out of SNAP?

Work Requirements – Results

The reinstatement of work requirements can impact individuals in three different ways. First, individuals might choose to fulfill the work requirement to maintain access to the SNAP benefit. Second, individuals might not be able to satisfy the work requirement and drop out of SNAP. Lastly, individuals that are unable to satisfy the work requirement, might still choose to increase work hours in order to make-up for the loss of the benefit. 

Due to the nature of the Virginia policy change, a natural experiment occurred.² After 2013, some individuals that were just below the age of 50, now faced strict work requirements, while other individuals that were above 50 did not. Gray et al. were able to track outcomes of both of these groups and determine whether any of the effects occurred due to the reinstatement of the work requirements. Their key results were:

1. Work requirements dramatically reduced SNAP participation. Within 18 months, participation of individuals just below the 50 year age cutoff dropped by 53%.

2. The impact on employment is limited – the estimated impact of work requirements on employment was zero.³

Visually, the drop in SNAP participation can be seen in the graph below:

The graph tracks the individuals that were enrolled in SNAP and what proportion of these individuals remained in SNAP. SNAP work requirements had a 6 month exception period – for the first 6 months the work requirements were paused, which is why the red cutoff line is shown between 5 and 6 months. As can be seen, right after the work requirements became binding, the difference in participation rates of individuals above 50 (the individuals that work requirements did not impact much) and individuals below 50 years old (individuals for whom work requirements were bindings), significantly widened.

Vulnerable Individuals are Hurt Most

Moreover, regarding SNAP participation, the individuals that stopped participating were also some of the most vulnerable. Individuals that were homeless or had no income prior to the reinstatement of the work requirements were most likely to stop participating in the program. In contrast, individuals that had disabilities, and therefore were exempt from work requirements, did not exit from SNAP. Since for individuals with disabilities, work requirements have no impact, as they can receive a waiver, this result is entirely expected. This serves as a test of the data – since we observed something that was expected, it is unlikely for there to have been data collection issues with the study. 

A Repeated Result

The result from the above study regarding employment impact is not unique. Studies, including Stacy et al. (2018) and Ritter (2018), have looked at the impact of work requirements of SNAP and found that there is usually no labor response of the individuals, but SNAP participation rates drop. At most, studies such as Harris (2018) and Han (2022) have found work requirements in SNAP increasing labor participation rates of 1 to 2 percentage points (this effect is mainly concentrated on individuals closest to the cutoffs - numerically this would increase employment by approximately 76,000, which is similar to the number of newly unemployed every week). At the same time Goldin et al (2024) found that the removal of work requirements for child tax credit eligibility did not influence mothers' decisions to exit the labor force.

More recently, Cook and East (2025) found that the main cause of falling SNAP enrollment due to work requirements is the heightened administrative burden. Cook and East saw a 23% decline in SNAP benefits amounts that households received when a new administrative burden was placed, with minimal or no increases in employment or earnings. Moreover, Cook and East found that individuals who were on SNAP and had the highest earnings prior to the implementation of the new administrative requirements were able to get exemptions from the administrative requirement and thus not lose SNAP eligibility. This meant that the people with lower incomes were most adversely impacted by the new administrative burdens.

Work Requirements - A Policy That Should Be Set Aside

The SNAP work requirements have no economic merit – they do not lead to an increase in labor participation. Instead, they decrease participation in SNAP, particularly among those who are most vulnerable and in dire need of assistance.

The above studies, however, have not fully addressed the impacts of work requirements, as research on the deterrence effect (that is, with the work requirements, there is no social safety net to assist them when they’re poor, so individuals are more likely to act differently throughout their life) is limited. 

Nonetheless, even if work requirements do deter people from falling into poverty, the above studies have also not included the additional costs and indirect effects work requirements cause. Verifying work requirements is costly, which requires additional administrative burden. Furthermore, families and individuals that lose SNAP benefits (or do not receive them in the first place) result in significant costs to society as well. This is because impacted individuals may need to rely on other assistance programs in the future, which could be far more expensive than the support provided by SNAP.⁴

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Interesting Reads from the Week

1. Article: Recent data on return to office mandates suggests that they have not actually increased the number of days spent in office:

   The most revealing finding? While policy requirements for office attendance have jumped 10% since early 2024, actual attendance has barely moved, increasing less than 2% during the same period based on data collected by Stanford Professor Nick Bloom and his team.

2. Overview of the “Big Beautiful Bill”: In a 5-part series,

   Econ With Dr. A
   discusses some key takeaways from the bill regarding additional administrative burdens, the new higher education provisions, changes to medicaid, the tax cuts and why we need more actual economics.

3. Article:

   Joan DeMartin
   gives a first-hand account of the administrative burden imposed by work requirements, as well as a description of the ‘efficacy’ of these requirements in Georgia:

   Georgia spent close to $100 million in federal funds to implement its program with over $55 million of the money going to consultants and IT staff to set up the digital platform necessary to administer the program. Yet, “as of May 2025, [only] approximately 7,500 of the nearly 250,000 eligible Georgians were enrolled, even though state statistics show 64% of that group is working.” Despite its massive investment in the platform, technical glitches, like crashing systems, turned away many applicants.

1. People who did not enroll in SNAP, even if they could have, are typically referred to as ‘never-takers’. That is people who will not participate in a program regardless of how easy or difficult it is to enroll. Since these people will never enroll into SNAP, changing SNAP policies will have no impact on their behavior.

2. In the hard-sciences (e.g. biology, chemistry), an experiment is when we take two groups and treat one of them with an intervention (for example, a medicine) and argue that any difference of outcomes between the groups is due to the treatment. That is because there shouldn’t be any difference in the group prior to the treatment if the enrollment into the groups was random. In social sciences (e.g. economics, psychology), such experiments are usually not allowed for ethical reasons or not feasible. However, they tend to occur naturally due to laws and regulations that arbitrarily divide people into two groups. For example, two groups with no discernible difference between them: one that receives government intervention and one that doesn’t.

3. To be conservative, the authors also add that, from a statistical perspective, the range of statistically significant employment effects cannot be greater than 3.5 percentage points.

4. As we showed before, early childhood investment is critical for development and has tremendous benefits to society. Removing nutrition benefits can adversely impact the development of children. SNAP has also been shown by Carr and Packham (2019) to reduce crime. This was true for grocery thefts, which were shown to spike when SNAP benefits run out.