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Title: Do Financial Incentives Encourage Welfare Recipients to Work? Early Findings from the Canadian Self Sufficiency Project
Authors: Card, David
Robins, Philip
Keywords: welfare
social experiment
labor supply
Issue Date: 1-Mar-1996
Citation: SDRC, February, 1996, Research in Labor Economics, forthcoming
Series/Report no.: Working Papers (Princeton University. Industrial Relations Section) ; 359
Abstract: This paper presents results from an experimental evaluation of an earnings supplement program offered to long-term welfare recipients in two Canadian provinces. The program -- known as the Self-Sufficiency Project - provides a supplement equal to one-half of the difference between an earnings target ($2,500 or $3083 per month, Canadian dollars, depending on the province) and the individual's actual earnings. The supplement is similar to a negative income tax with two important differences: (1) eligibility is limited to long-term welfare recipients who find a full-time job (30 hours per week or more); and (2) the supplement payment is based on individual earnings rather than family income. The evaluation is based on a randomized design that will follow 6,000 individuals for five years. Early findings for a first cohort of 2,000 individuals observed over 18 months of program eligibility suggest that the financial incentives of the Self-Sufficiency Program significantly increase labor market attachment and significantly reduce welfare participation.
Appears in Collections:IRS Working Papers

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