Do Financial Incentives Encourage Welfare Recipients to Work? Evidence from a Randomized Evaluation of the Self-Sufficiency Project / David Card, Philip K. Robins.

Format:

Book

Author/Creator:

Card, David.

Contributor:

National Bureau of Economic Research.

Robins, Philip K.

Series:

Working Paper Series (National Bureau of Economic Research) no. w5701.

NBER working paper series no. w5701

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 1996.

Summary:

This paper reports on a randomized evaluation of an earnings subsidy offered to long-term welfare recipients in Canada. The program -- known as the Self-Sufficiency Project (SSP) -- provides a supplement equal to one-half of the difference between a target earnings level and a participant's actual earnings. The SSP 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; and (2) the payment depends on individual earnings rather than family income. Our evaluation is based on a classical randomized design: one half of a group of single parents who had been on welfare for over a year were eligible to receive the SSP supplement, while the other half were assigned to a control group. Results for an early cohort of SSP participants and controls suggest that the financial incentives of the Self-Sufficiency Program increase labor market attachment and reduce welfare participation.

Notes:

Print version record

August 1996.