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Reforming the Financial Incentives of the Welfare System

  • Card, David

    ()

    (University of California, Berkeley)

This paper summarizes the findings from the Self Sufficiency Project: a large scale social experiment that is being conducted in Canada to evaluate the effect of high-powered financial incentives for full time work among former welfare recipients. The experimental results confirm the importance of financial incentives in the welfare participation and work decisions of low-income single mothers. Enhanced incentives induce a significant fraction of welfare recipients to leave the program and enter work. They also have a relatively large anti-poverty effect. Moreover, when incentives are offered to relatively short-term recipients, they can actually save the government money.

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File URL: http://ftp.iza.org/dp172.pdf
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Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 172.

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Length: 61 pages
Date of creation: Jul 2000
Date of revision:
Handle: RePEc:iza:izadps:dp172
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  1. Bruce D. Meyer & Dan T. Rosenbaum, 1998. "Welfare, the Earned Income Tax Credit, and the Labor Supply of Single Mothers," JCPR Working Papers 32, Northwestern University/University of Chicago Joint Center for Poverty Research.
  2. David Card & Philip K. Robins & Winston Lin, 1998. "Would Financial Incentives for Leaving Welfare Lead Some People to Stay on Welfare Longer? An Experimental Evaluation of 'Entry Effects' in the SSP," NBER Working Papers 6449, National Bureau of Economic Research, Inc.
  3. Charles Michalopoulos & Philip K. Robins & David Card, 2000. "When Financial Incentives Pay for Themselves: Early Findings from the Self-Sufficiency Project's Applicant Study," JCPR Working Papers 133, Northwestern University/University of Chicago Joint Center for Poverty Research.
  4. repec:mpr:mprres:2635 is not listed on IDEAS
  5. Philip K. Robins, 1985. "A Comparison of the Labor Supply Findings from the Four Negative Income Tax Experiments," Journal of Human Resources, University of Wisconsin Press, vol. 20(4), pages 567-582.
  6. Blank, Rebecca M. & Card, David & Robins, Philip K., 1999. "Financial Incentives for Increasing Work and Income Among Low-Income Families," Department of Economics, Working Paper Series qt2f15x7sg, Department of Economics, Institute for Business and Economic Research, UC Berkeley.
  7. Card, D. & Michalopoulos, C. & Robins, P.K., 2001. "Measuring Wage Growth Among Former Welfare Recipients," Papers 2001-5, Gouvernement du Canada - Human Resources Development.
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