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Tuesday, February 10, 2009

Public programs that ensure economic security can have a big influence on family budgets, as evidenced by an online tool that simulates the effects of work supports on the budgets of hypothetical families.

The Budget and Policy Center has partnered with the National Center for Children in Poverty (a think tank based at Columbia University's School of Public Health) on a "Family Resource Simulator" for Washington State. An updated version of the FRS was released this morning.

The Family Resource Simulator demonstrates the impact of work supports such as the Earned Income Tax Credit, child care subsidies, and public health insurance on a family budget. It allows the user to choose a location within the state, a marital status, the number and age of children in the family, debts, and assets. You can also decide which work supports you would like to consider. The calculator comes preloaded with typical expenses for areas such as transportation and health insurance, but also allows you to enter your own assumptions.

When you've entered all your choices, the simulator produces graphs that indicate how public supports would intersect with family budgets and how expenses and resources change as wages increase.

The example below shows the budget for a single mom with two young children living in Pierce County if she had no access to any work supports. According to the calculator, she would have to earn a considerable salary before resources are sufficient to meet expenses (over $50,000).

This next graph considers the same family, but allows access to work supports in cases where the family is eligible.* Under this scenario, resources cover expenses at a much lower income level (about $24,000).

* The two graphs (generated by the FRS) have different scales - the top one goes from $0 to $60,000 and the bottom goes from $0 to $70,000.

Note that the FRS is a public policy analysis tool. It shouldn't be used to determine a real family's eligibility for public assistance.

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