Career Ladder Identifier and Financial Forecaster (CLIFF)
Some working families experience financial barriers to economic mobility. One significant barrier occurs when career advancement puts a family above the income eligibility threshold for public assistance programs. Due to the gradual or sudden loss of these programs, career advancement opportunities can result in the family being financially worse off (a benefits cliff) or no better off (a benefits plateau) than before the wage increase.
This loss of means-tested public assistance is an effective marginal tax rate on income gains. High effective marginal tax rates mean that some workers have a financial disincentive to invest in their own human capital and advance from lower-wage work to jobs that lead to economic self-sufficiency.
Federal Reserve Bank of Atlanta Tools
The complexity of public assistance programs means that many workers may struggle to understand the timing and magnitude of benefits loss. Coupled with economic insecurity, this uncertainty can prevent individuals from actively seeking opportunities for career advancement. Further, individuals who do advance without knowledge of when assistance will end can find themselves in situations where their standard of living doesn't improve, or even declines.
The Federal Reserve Bank of Atlanta has developed two tools designed to provide information about benefits loss along a career path.
The CLIFF Dashboard is an informational dashboard that shows how public assistance losses intersect with local in-demand career paths. The dashboard shows the financial tradeoffs associated with career advancement and the net gains to the taxpayer when workers advance. It also simulates policy and programmatic solutions.
See a demo of the CLIFF dashboard and visit the Community and Institutional Partnerships page to learn more about the dashboard and see how Atlanta Fed partners are using their dashboards.
The CLIFF Planner is a career path planner and budgeting tool that shows how public assistance losses intersect with local in-demand career paths. The planner allows the user to compare career choices and provide individualized results in more detail than with the CLIFF Dashboard. It also allows the user to create a budget that will mitigate financial barriers to career advancement.
To learn more, see a demo of the CLIFF Planner.