An analysis of the impact of the self-sufficiency project on wages

We measure the impact of the Self-Sufficiency Project (a randomized welfare-to-work experiment in Canada; henceforth, SSP) on relative wage progression. SSP provided a generous 3-year earnings supplement to treatment group members who found a full-time job within a year of the start of the experiment (take-up group). We estimate the treatment on the treated for two sub-groups of the take-up group: the incentivized and non-incentivized groups. Using an econometric model of wage determination, we find evidence of large and significant relative wage progression of approximately 9 percentage points during the 3-year supplement period for the incentivized group. The impact for the non-incentivized group is much smaller (at most 3 percentage points). There is also some limited information that the non-incentivized group in New Brunswick and the incentivized groups in both New Brunswick and British Columbia continued to work more after the 3-year supplement period ended. Copyright Springer-Verlag 2013