Earnings supplements for long-term welfare recipients who find full-time work and leave welfare.
The Canadian Self-Sufficiency Project, administered by the provincial governments of British Columbia and New Brunswick, provided monthly cash payments (“earnings supplements”) to long-term recipients of income assistance (Canadian equivalent to U.S. welfare), contingent on their finding full-time employment and leaving the income assistance program. Canadian Self-Sufficiency Project participants had one year to find full-time employment, and thus become eligible for the supplements. Participants could receive supplements for up to three years as long as they continued to work full-time.
The earnings supplements were sizeable. As an illustrative example — based on the experiment’s formula for determining the size of a supplement payment, a single mother in New Brunswick who worked full-time for a year and earned $23,400 would receive monthly supplements totaling around $5,900 for that year.*
The program cost approximately $6,000-$9,500 per year per welfare recipient offered an earnings supplement (the precise cost depended on the specific welfare population to which it was offered). However, as discussed below, the program’s net costs to the government were much lower than this amount because the program substantially increased income tax revenues and reduced government welfare payments.
*Throughout this summary, all monetary amounts are converted to 2017 U.S. dollars.