Financial Incentives for Increasing Work and Income Among Low-Income Families

David Card and Philip K. Robins Rebecca M. Blank
Authors registered in the RePEc Author Service: David E. Card, Rebecca M. Blank and Philip Kenneth Robins ()

No E99-264, Economics Working Papers from University of California at Berkeley

Abstract: 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 effective at alleviating poverty and raising incomes. Evidence also indicates that combining financial incentive programs with job search and job support services can increase both employment and income gains. Non-experimental evidence from the Earned Income Tax Credit (EITC) and from state Temporary Assistance to Needy Families (TANF) programs with enhanced earnings disregards also suggests that these programs increase employment, and this evidence is consistent with the experimental evidence on the impact of financial incentive program.

New Economics Papers: this item is included in nep-pbe and nep-pub
Date: 1999-02-01
View citations in EconPapers

Downloads: (external link)
http://econwpa.wustl.edu/eprints/hew/papers/9902/9902002.abs link to EconWPA (text/html)

Related works:
Working Paper: Financial Incentives for Increasing Work and Income Among Low-Income Families (1999)
Working Paper: Financial Incentives for Increasing Work and Income Among Low- Income Families (1999)
Working Paper: Financial Incentives for Increasing Work and Income Among Low-Income Families (1999)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: http://EconPapers.repec.org/RePEc:ucb:calbwp:e99-264

Ordering information: This working paper can be ordered from
IBER, F502 Haas Building, University of California, Berkeley CA 94720-1922

Access Statistics for this paper

More papers in Economics Working Papers from University of California at Berkeley
Address: University of California at Berkeley, Berkeley, CA USA
Contact information at EDIRC.
Series data maintained by Christopher F. Baum ().