welfare

Abstract

The Self-Sufficiency Project (SSP) is a large-scale social experiment being conducted in Canada to
evaluate the effects of an eamings 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. An important concern 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 with new welfare recipients to measure the magnitude of this effect. One
half of a group of new recipients were informed that would be eligible to receive SSP if they stayed on
income assistance for a year; the other half were randomly assigned to a control group. Our analysis
indicates a very modest "delayed exit" effect among the treatment group relative to the controls.

Year of Publication
1997
Number
380
Date Published
05/1997
Publication Language
eng
Citation Key
8085
Robins, P., Lin, W., & Card, D. (1997). Would Financial Incentives for Leaving Welfare Lead Some People to Stay on Welfare Longer? An Experimental Evaluation of 'Entry Effects' in the Self-Sufficiency Project. Retrieved from http://arks.princeton.edu/ark:/88435/dsp01ft848q625 (Original work published 05/1997AD)
Working Papers
Abstract

This paper empirically examines the role of social networks in welfare participation. Social theorists from across the political spectrum have argued that network effects have given rise to a culture of poverty. Empirical work, however, has found it difficult to distinguish the effect of networks from unobservable characteristics of individuals and areas. We use data on language spoken to better infer an individual’s network within an area. Individuals who are surrounded by others speaking their language have a larger pool of available contacts. Moreover, the network influence of this pool will depend on their welfare knowledge. We, therefore, focus on the differential effect of increased contact availability: does being surrounded by others who speak the same language increase welfare
use more for individuals from high welfare using language groups? The results strongly confirm the
importance of networks in welfare participation.
We deal with omitted variable bias in several ways. First, our methodology allows us to include
local area and language group fixed effects and to control for the direct effect of contact availability; these controls eliminate many of the problems in previous studies. Second, we instrument for contact availability in the neighborhood with the number of one’s language group in the entire metropolitan area. Finally, we investigate the effect of removing education controls. Both instrumentation and removal of education controls have little impact on the estimates.

Year of Publication
1998
Number
405
Date Published
10/1998
Publication Language
eng
Citation Key
The Quarterly Journal of Economics, Vol. 115, No. 3, Aug., 2000
Bertrand, M., Mullainathan, S., & Luttmer, E. (1998). Network Effects and Welfare Cultures. Retrieved from http://arks.princeton.edu/ark:/88435/dsp019g54xh665 (Original work published 10/1998AD)
Working Papers
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.

Year of Publication
1996
Number
359
Date Published
03/1996
Publication Language
eng
Citation Key
SDRC, February, 1996, Research in Labor Economics, forthcoming
Robins, P., & Card, D. (1996). Do Financial Incentives Encourage Welfare Recipients to Work? Early Findings from the Canadian Self Sufficiency Project. Retrieved from http://arks.princeton.edu/ark:/88435/dsp01t148fh15n (Original work published 03/1996AD)
Working Papers
Abstract

Recent efforts to expand unemployment insurance (UI) eligibility are expected to increase low-earning workers’ access to UI. Although the expansion’s aim is to smooth the
income and consumption of previously ineligible workers, it is possible that UI benefits simply displace other sources of income. Standard economic models predict that UI delays reemployment, thereby reducing wage income. Additionally, low-earning workers are often eligible for benefits from means-tested programs, which may decrease with UI benefits. In this paper, we estimate the impact of UI eligibility on employment, means-tested program participation, and income after job loss using a unique individual-level administrative data set from the state of Michigan. To identify a causal effect, we implement a fuzzy regression discontinuity design around the minimum earnings threshold for UI eligibility. Our main finding is that while UI eligibility increases jobless durations by up to 25 percent and temporarily lowers receipt of cash assistance (TANF) by 63 percent, the net impact on total income is still positive and large: In the quarter immediately following job loss, UI-eligible workers have 46-61 percent higher incomes than ineligibles.

Year of Publication
2015
Number
591
Date Published
09/2015
Publication Language
eng
Citation Key
9246
Leung, P., & O’Leary, C. (2015). Should UI Eligibility Be Expanded to Low-Earning Workers? Evidence on Employment, Transfer Receipt, and Income from Administrative Data. Retrieved from http://arks.princeton.edu/ark:/88435/dsp01kw52jb45x (Original work published 09/2015AD)
Working Papers