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NATIONAL BUREAU OF ECONOMIC RESEARCH

NBER Working Papers by Winston Lin

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March 1998Would Financial Incentives for Leaving Welfare Lead Some People to Stay on Welfare Longer? An Experimental Evaluation of 'Entry Effects' in the SSP
with David Card, Philip K. Robins: w6449
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 ...

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