Our sample families participate in food stamps and TANF and are subject to a higher
effective marginal tax rate than applies to those in the more universal system or in practice
than applies to families who, while eligible, do not participate in the food stamp program.
Outside of our model, we add an indicator of Medicaid eligibility, based on
previously published information. We assign a value for this insurance equal to the
average cost the government pays. As noted, certainly there is debate over the true
value of Medicaid, and we show calculations with and without our assumed value. For
simplicity, we do not add the costs of working (such as child care and transportation),
though Leguizamon (2012) points out child care costs can be another important source
of variation in net gains from work.