By André Victor D. Luduvice and Cornelius Johnson

Figure 4 offers a breakdown of the portfolio composition of households’ assets into all categories of our data except for primary residence and debt. Maintaining our focus on households for which testing constraints have a higher probability of being binding, we restrict our attention to the bottom 40% of the income distribution. We find that recipients allocate a larger part of their assets into categories that are less liquid and not as frequently tested by programs as cash. In particular, the allocation of a larger share of recipients’ wealth into retirement accounts or business equity can be related to the less-strict testing of such asset types in the rules of transfer programs. For instance, there is substantial diversity in the way states test and exempt vehicle values in both SNAP and TANF, a fact widely studied and documented by the literature (Gehr, 2018).

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