Institutional Affiliation: U. of Miami
|The Limits to Wage Growth: Measuring the Growth Rate of Wages For Recent Welfare Leavers|
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We study the rate of wage growth among welfare leavers in the Self Sufficiency Program (SSP), an experimental earnings subsidy offered to long-term welfare recipients in Canada. Single parents who started working in response to the SSP incentive are younger, less educated, and have more young children than those who would have been working regardless of the program. They also earn relatively low wages in their first few months of work: typically within $1 of the minimum wage. Despite these differences, their rate of wage growth is similar to other welfare leavers. We estimate that people who were induced to work by SSP experienced real wage growth of about 2.5 - 3 percent per year - a rate consistent with conventional measures of the return to experience for similar workers.
|Financial Incentives for Increasing Work and Income Among Low-Income Families|
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This paper investigates the impact of financial incentive programs, which have become an increasingly common component of welfare programs. We review experimental evidence from several such programs. Financial incentive programs appear to increase work and raise income (lower poverty), but cost somewhat more than alternative welfare programs. In particular, windfall beneficiaries -- those who would have been working anyway -- can raise costs by participating in the program. Several existing programs limit this effect by targeting long-term welfare recipients or by limiting benefits to full-time workers. At the same time, because financial incentive programs transfer support to working low-income families, the increase in costs due to windfall beneficiaries makes these programs more effe...
Published: Finding Jobs: Work and Welfare Reform, Blank, Rebecca and David Card,eds., New York: Russell Sage, 2000.
|Would Financial Incentives for Leaving Welfare Lead Some People to Stay on Welfare Longer? An Experimental Evaluation of 'Entry Effects' in the SSP|
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The Self-Sufficiency Project (SSP) is a large scale social experiment being conducted in Canada to evaluate the effects of an earnings supplement (or subsidy) for long-term welfare recipients who find a full-time job and leave income assistance. The supplement is available to single parents who have received income assistance for a year or more, and typically doubles the gross take-home pay of recipients. A critical issue in the evaluation of SSP is whether the availability of the supplement would lead some new income assistance recipients to prolong their stay on welfare in order to gain eligibility. A separate experiment was conducted to measure the magnitude of this effect. One half of a group of new applicants was informed that they would be eligible to receive SSP if they stayed on ...
|Do Financial Incentives Encourage Welfare Recipients to Work? Evidence from a Randomized Evaluation of the Self-Sufficiency Project|
with : w5701
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. ...
Published: Card, David and Philip K. Robins. "How Important Are 'Entry Effects' In Financial Incentive Programs For Welfare Recipients? Experimental Evidence From The Self-Sufficiency Project," Journal of Econometrics, 2005, v125(1-2,Mar-Apr), 113-139.