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Are Two Carrots Better Than One? The Effects of Adding Employment Services to Financial Incentive Programs for Welfare Recipients

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  • Philip K. Robins
  • Charles Michalopoulos
  • Kelly Foley

Abstract

The Self-Sufficiency Project (SSP) was a social experiment conducted in two Canadian provinces during the 1990s that tested a generous financial incentive program for welfare recipients. A little-known subsidiary experiment, called SSP Plus, had a three-way design that tested the incremental effect of adding employment services to the generous financial incentive program. Employment services are viewed by many welfare analysts as an important component of an overall strategy for helping welfare recipients escape poverty and achieve stable employment. This paper presents the results of the SSP Plus experiment. Adding employment services encouraged more people to take up the earnings supplement, and it appeared to have long-term effects on full-time employment and welfare receipt. This might be because the services improved the jobs people obtained. Compared to program participants who lacked the added services, SSP Plus members had higher earnings and wage rates, and also appear to have held more sustainable jobs.

Suggested Citation

  • Philip K. Robins & Charles Michalopoulos & Kelly Foley, 2008. "Are Two Carrots Better Than One? The Effects of Adding Employment Services to Financial Incentive Programs for Welfare Recipients," ILR Review, Cornell University, ILR School, vol. 61(3), pages 410-423, April.
    • Handle: RePEc:sae:ilrrev:v:61:y:2008:i:3:p:410-423
    DOI: 10.1177/001979390806100308
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    References listed on IDEAS

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    1. Card, David & Robins, Philip K., 2005. "How important are "entry effects" in financial incentive programs for welfare recipients? Experimental evidence from the Self-Sufficiency Project," Journal of Econometrics, Elsevier, vol. 125(1-2), pages 113-139.
    2. Robert A. Moffitt, 2003. "Means-Tested Transfer Programs in the United States," NBER Books, National Bureau of Economic Research, Inc, number moff03-1, March.
    3. Wolfgang Ochel, 2001. "Financial Incentives to Work - Conceptions and Results in Great Britain, Ireland and Canada," CESifo Working Paper Series 627, CESifo.
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    Cited by:

    1. Dorsett, Richard, 2014. "The effect of temporary in-work support on employment retention: Evidence from a field experiment," Labour Economics, Elsevier, vol. 31(C), pages 61-71.
    2. Alexander Spermann, 2015. "How to fight long-term unemployment: lessons from Germany," IZA Journal of Labor Policy, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 4(1), pages 1-15, December.
    3. Christopher J. O'Leary, 2015. "Use of Unemployment Insurance and Public Employment Services after Leaving Welfare," Upjohn Working Papers 15-235, W.E. Upjohn Institute for Employment Research.
    4. Nathan Berg & Todd Gabel, 2013. "Effects of New Welfare Reform Strategies on Welfare Participation: Microdata Estimates from Canada," Working Papers 1304, University of Otago, Department of Economics, revised Feb 2013.
    5. Dr Richard Dorsett, 2013. "Can Post-Employment Services Combined with Financial Incentives Improve Employment Retention for Welfare Recipients? Evidence from the Texas Employment Retention and Advancement Evaluation," National Institute of Economic and Social Research (NIESR) Discussion Papers 409, National Institute of Economic and Social Research.
    6. Richard Hendra & James Riccio & Richard Dorsett & Philip Robins, 2015. "Breaking the low pay, no pay cycle: the effects of the UK Employment Retention and Advancement programme," IZA Journal of Labor Policy, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 4(1), pages 1-32, December.
    7. Stephen A. Wandner, 2016. "Wage Insurance as a Policy Option in the United States," Upjohn Working Papers 16-250, W.E. Upjohn Institute for Employment Research.
    8. Dr Richard Dorsett, 2013. "Can Post-Employment Services Combined with Financial Incentives Improve Employment Retention for Welfare Recipients? Evidence from the Texas Employment Retention and Advancement Evaluation," National Institute of Economic and Social Research (NIESR) Discussion Papers 409, National Institute of Economic and Social Research.

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    More about this item

    JEL classification:

    • I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply

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