This working paper focuses on the impact of the Self-Sufficiency Project (SSP) Applicant study on IA participation. It shows that the Applicant study created three incentives:
(1) an eligibility incentive for everyone in the program group to remain on welfare for a year to become eligible for the subsidy,
(2) an establishment incentive for members of the treatment group who satisfied the waiting period requirement to find a job and leave welfare within the next 12 months, and
(3) an entitlement incentive for those who established SSP eligibility to work full time and remain off welfare in the three-year period during which subsidy payments were available.
Nearly all of the delayed exiters — people who delayed their exit from IA in response to the supplement — left IA within two to three months of the end of the waiting period and became entitled for the SSP subsidy. The paper estimates that roughly two thirds of the peak impact of SSP on welfare participation was attributable to the time-limited entitlement feature of SSP.
Those who received subsidy payments tended to remain off welfare, even after the subsidy payments ended. About 60 to 90 per cent of the entitlement incentive effects experienced by members of the treatment group during their three-year period of subsidy eligibility persisted in the immediate post-entitlement period, though the effect faded relatively quickly.
Published: February 2006
Policy Area: Income Security - Welfare and Employment
Population: Social Assistance Recipients - Women - Communities and Families - EI Recipients - Low-income Populations - Low-skilled Workers
Type: Working paper