Each year more than one-quarter of all Americans rely on means-tested benefits for basic needs such as food, health insurance, housing, and child care. Recipients of these benefits have to consider trade-offs when deciding to accept a new, higher-paying job opportunity: Will the greater income outweigh the potential loss of benefits when their earnings increase? People who lose benefits most often have to start the application process from scratch. In addition to the burden of reapplying, there is a risk that their application will be rejected, or they may have to spend weeks or months without needed benefits while waiting for their application to be approved. Given this risk and uncertainty, people might be reluctant to take higher-paying jobs that push their income above the eligibility thresholds for their benefits—especially if the recipient views the job opportunity as unstable and likely to end unexpectedly, at which point they would need benefits again.

To understand how benefit recipients consider new opportunities, we conducted a discrete choice experiment with recipients of four means-tested benefit programs. Respondents considered five vignettes describing fictional people benefit recipients who were faced with a decision of whether to take a higher-paying job. For each vignette, we asked respondents to decide whether the person should or should not take the higher-paying job. We varied the vignettes in three ways:

• Benefit loss and ease of resuming benefits
• Amount of monthly earnings increase and benefit loss
• Job instability (risk of job loss)

We analyzed results using a Bayesian framework which increased the power of the survey to produce meaningful findings. Our results highlight the importance of all three factors in the decisions of survey respondents.