Reforming the Financial Incentives of the Welfare System

David Card

No 172, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: This paper summarizes the findings from the Self Sufficiency Project: a large scale social experiment that is being conducted in Canada to evaluate the effect of high-powered financial incentives for full time work among former welfare recipients. The experimental results confirm the importance of financial incentives in the welfare participation and work decisions of low-income single mothers. Enhanced incentives induce a significant fraction of welfare recipients to leave the program and enter work. They also have a relatively large anti-poverty effect. Moreover, when incentives are offered to relatively short-term recipients, they can actually save the government money.

Keywords: Welfare reform; financial incentives (search for similar items in EconPapers)
JEL-codes: I38 (search for similar items in EconPapers)
Pages: 61 pages
Date: 2000-07
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Citations: View citations in EconPapers (13)

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