Magazine article Nation's Cities Weekly

State Pay Incentives Move People from Welfare to Work

Magazine article Nation's Cities Weekly

State Pay Incentives Move People from Welfare to Work

Article excerpt

Data from a new study by the Manpower Demonstration Research Corporation (MDRC), a national research and evaluation firm, suggest that local officials should advocate for state welfare-to-work policies that combine time limits with financial incentives "to make work pay."

Researchers presented findings from a review of welfare reform efforts in seven states: Arizona, Connecticut, Delaware, Vermont, Florida, Indiana, and Wisconsin. MDRC presented highlights from their study in November at a briefing in Washington, D.C. that was cosponsored by the Welfare Information Network (WIN).

Dan Bloom, MDRC senior research Associate, noted that there is a wide variation in the way states have implemented time limits. The concept of time limits is among the more controversial provisions of the federal welfare reform law, passed by Congress in 1996. Federal law states that a person cannot receive cash benefits through Temporary Assistance to Needy Families (TANF) for more than five years over a lifetime. But states can set time limits shorter than five years.

Some states, like California and New York, have no time limits. Other states, including Connecticut and Florida, have time limits of less than three years. MDRC found that recipients who knew about time limits increased their effort to find a job. But overall, shorter state time limits did not decrease the number of people receiving welfare.

Many people continued to receive benefits while they worked.

Gordon Berlin, vice president of MDRC, discussed the role of work incentives in moving people off welfare into jobs. Work incentives are intended to show TANF recipients that they can be better off by working, even in a low-wage job. States are using incentives in two ways: (1) by not counting a certain percentage of income against welfare benefits (this is called an earned income disregard); or (2) by giving additional payment to recipients who go to work a certain number of hours a week. …

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