Self-Sufficiency Project (SSP) – Estimating the Effects of a Time-Limited Earnings Subsidy for Welfare-Leavers

Date
February 2005
Type(s)
Project

Summary

SSP program group members would receive an earnings subsidy that could last as long as three years if they began working full time within 12 months of their random assignment to the program group. Consequently, SSP generated two distinct incentives: an initial entitlement incentive to find a job and leave welfare within a year of random assignment, and a post-entitlement incentive to continue to choose work over welfare. The estimates provided in this paper suggest that approximately half of the peak impact of SSP was attributable to the entitlement incentive. Despite the additional employment engendered by the program’s incentives, SSP had no long-term impact on wages, and little or no long-term effect on welfare participation.

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