Using Financial Incentives to Encourage Welfare Recipients to BecomeEconomically Self-Sufficient

[...]One of the primary goals of TANF is to move welfarerecipients into work and economic self-sufficiency. Althoughstates were given much flexibility in how to achieve this goal, thefederal government imposed some guidelines in the form ofrequirements that welfare recipients be participating in a workrelatedactivity (“work participation requirements”) and timelimits on length of welfare receipt. The focus of this paper is onalternative financial incentive schemes that are being used orcould be used to help states meet the work participationrequirements specified by the federal legislation. In particular,the paper considers whether an earnings supplementconditioned on full-time work would encourage more people towork than the enhanced earnings disregards currently beingused or tested by many states.[...]