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Report questions work or welfare; says Minn. 14th most generous state

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A study from the Washington, D.C.-based CATO Institute is questioning whether people are better off working or being on welfare, KSTP-TV reports.

The findings were released Monday by the Libertarian think tank, which updated its 1995 study "The Work Versus Welfare Trade-Off: An Analysis of the Total Level of Welfare Benefits State By State."

In the updated 2013 study, CATO finds that Minnesota is the 14th most generous state in the country when it comes to welfare benefits. Hawaii is first, followed by Washington, D.C., Massachusetts, Connecticut and New Jersey.

North Dakota ranks 17th on the list, while South Dakota comes in at No. 21. Wisconsin is No. 35 on the list of most generous states for welfare benefits.

Mississippi is the least generous state for welfare benefits, the CATO study says.

In the study, author Michael Tanner questions if people are favoring higher-paying government aid over low-paying job opportunities.

"If you look at all those overlapping programs, people can accumulate a great many benefits, and those benefits act as a disincentive to work," Tanner told KSTP.

As an example, the report finds, the maximum amount of aid a Minnesota parent with two children can get in aid per year is $12,060, and with federal benefits including housing and healthcare factored in, the amount totals $31,603 in tax-free dollars. The amount is an increase of $3,738 over the 1995 level of $27,865 -- an amount CATO adjusted for inflation.

By contrast, a parent who works full-time earning Minnesota's minimum-wage of $7.25 per hour earns $15,080 a year before taxes are taken out.

The findings of the report has led the local conservative think tank, the MN Freedom Foundation, to call for reform and strengthen work requirements.

Annette Meeks of the foundation tells KSTP that only 56 percent of welfare recipients are working right now. The state Department of Human Services requires parents to have a job or look for one.

The state Department of Human Services said 41,000 Minnesotans were on welfare in 2012 and 71 percent of the recipients are children, KSTP reported. There's a 60-month lifetime limit in the welfare program in the state.

Read the CATO study here.

See KSTP's report on the CATO Institute study below.

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