Guarding Public Coffers or Trapping the Poor? The Role of Public Assistance Asset Limits in Program Efficacy and Family Economic Well-Being

Devolution of the American welfare state over the last 40 years means that states have more control to set eligibility criteria in public assistance programs. One such criterion, limits on participant assets, is designed to improve program efficiency by allocating scarce public resources only to the truly needy, but it presents a unique set of barriers to financial independence for low-income families. In this article, we present the historical policy context for asset limits in the primary cash assistance, food assistance, health, and disability programs in the United States and discuss the theoretical implications for program participation and efficiency, household assets, and the labor market. Finally, we provide a review of the existing empirical literature in each of these areas and recommendations for future research and policy development.