WRP Incentives Only provided financial incentives to work and supportive services for single parents and for two-parent families with a disabled or unemployed parent receiving cash assistance. The goal of WRP Incentives Only was to encourage employment and reduce reliance on welfare.

WRP Incentives Only provided financial incentives to work and supportive services for single parents and for two-parent families with a disabled or unemployed parent receiving cash assistance. The goal of WRP Incentives Only was to encourage employment and reduce reliance on welfare.

WRP Incentives Only was one of the demonstration projects made possible by Section 1115 waivers to the rules in effect at the time for the Aid to Families with Dependent Children (AFDC) program. These Section 1115 waivers allowed states to test new approaches to advance the objectives of the AFDC program.

WRP Incentives Only provided financial incentives to encourage and reward work. First, WRP Incentives Only allowed participants to earn more and have more of certain assets. All WRP Incentives Only participants were subject to these rule changes upon entry into the program. Next, families that transitioned from welfare to work were eligible for expanded support from Medicaid and transitional child care assistance. AFDC applicants and current recipients were eligible for WRP Incentives Only. WRP Incentives Only did not place a time limit on receipt of cash assistance for participants.

While the WRP Incentives Only program was implemented in all 12 of Vermont's welfare districts, the study focused on 6 of these regions. The evaluation of the WRP Incentives Only also tested the effectiveness of a variation of the WRP that combined work incentives with a work requirement, and it evaluated the effectiveness of WRP Incentives Only compared with the variation of WRP that included a work requirement.

Year evaluation began: 1994
Populations and employment barriers: Cash assistance recipients, Parents
Intervention services: Case management, Financial incentives, Health services, Supportive services, Work readiness activities
Setting(s): Tested in multiple settings

Effectiveness Rating and Effect By Outcome Domain

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Outcome domain Term Effectiveness rating Effect in 2018 dollars and percentages Effect in standard deviations Sample size
Increase earnings Short-term Little evidence to assess support favorable $230 per year 0.01 2856
Long-term Little evidence to assess support unfavorable $-42 per year 0.00 4886
Very long-term Little evidence to assess support favorable $523 per year 0.03 4466
Increase employment Short-term Little evidence to assess support favorable 0% (in percentage points) 0.01 2856
Long-term Little evidence to assess support favorable 1% (in percentage points) 0.01 4886
Very long-term Little evidence to assess support favorable 1% (in percentage points) 0.04 4466
Decrease benefit receipt Short-term Little evidence to assess support unfavorable $140 per year 0.05 2856
Long-term Little evidence to assess support favorable $-140 per year -0.05 4886
Very long-term Supported favorable $-297 per year -0.11 0
Increase education and training All measurement periods No evidence to assess support

Sample Characteristics

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State or region: Vermont

Implementation Details

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Dates covered by study

WRP Incentives Only provided services to participants from July 1994 to June 2001. The study randomly assigned cash assistance applicants and existing recipients to study group from July 1995 to December 1996. Participant impacts were measured for six years after random assignment.

Organizations implementing intervention

The Vermont Department of Social Welfare (DSW), later called the Department of Prevention, Assistance, Transition, and Health Access, implemented WRP Incentives Only.

Populations served

WRP Incentives Only served single- and two-parent families applying for or receiving cash assistance welfare. Participation was mandatory.

Of participants in single-parent families, 93 percent were female, and the average age was 31. Seventy-three percent held high school diplomas or GEDs. Of the single-parent families, 89 percent had at least one child younger than age 13, and 37 percent had a child younger than age 3.

The study did not discuss the overall demographic statistics of two-parent families. However, it did present statistics for two-parent families with a disabled parent, which show that the parents in 87 percent of such families were married. Of two-parent families with a disabled parent, 83 percent had at least one child younger than age 13, and 30 percent had a child younger than age 3.

Description of services implemented

WRP Incentives Only was created under the federal Section 1115 waivers to test new approaches to achieving AFDC’s goals. WRP Incentives Only’s aim was to encourage work and increase self-sufficiency for individuals receiving cash assistance welfare through financial incentives. Both single-parent and two-parent families were eligible for cash assistance regardless of their recent work history. Unmarried families that lived and had a child together were treated as a family unit. WRP Incentives Only did not have a time limit for cash assistance. Two-parent families with able-bodied adults were required to participate in Reach Up, Vermont’s welfare-to-work program, immediately. The primary earner was required to search for and accept employment. Financial incentives included the following:

  • Enhanced earnings disregard: The first $150 of a participant’s earnings, plus 25 percent of remaining earnings, was not considered in determining benefit eligibility.

  • Asset limits: Participants could own a car of any value without it counting toward asset limits that might make a family ineligible for benefits, which allowed participants the opportunity to have reliable transportation.

  • Child support: Custodian parents received the full child support payments, rather than receiving only the first $50 a month and the state keeping the remainder. Payments less than $50 were not counted as income so were not counted against their cash assistance benefits.

  • Medicaid: Participants received transitional Medicaid coverage for three years and child care subsidies for one year if their family income did not exceed 80 percent of the Vermont median income.

Service intensity

Forty-five percent of single-parent families in WRP Incentives Only participated in an employment-related activity, including education and training, in the six-year follow-up period.

Comparison conditions

Individuals who were randomly assigned to the comparison group were subject to Vermont’s existing AFDC program, which meant they could receive cash assistance without financial incentives to work.

Partnerships

The Vermont Department of Employment and Training (DET) operated Reach Up job search classes.

Staffing

Eligibility specialists and family services case managers provided services at DSW. Staff at DET provided Reach Up services. The study authors did not include information on the number of staff or their training, degrees, or certifications.

Local context

While WRP Incentives Only was implemented in all 12 of Vermont’s welfare districts, the study focused on 6 of these regions. The welfare districts in the study included about two-thirds of Vermont’s cash assistance caseload.

Fidelity measures

The study did not discuss any tools to measure fidelity to the intervention model.

Funding source

DSW and the U.S. Department of Health and Human Services funded the intervention, with DSW funding case management and local providers funding employment and training services.

Cost information

A cost–benefit analysis estimated that single-parent family participants gained more in earnings, fringe benefits, tax credits, and supportive services than they lost in public assistance, tax payments, and medical assistance, by about $130 (in 2000 dollars) per person. The government incurred a cost of about $300 per person. The study defined government cost as the amount the government spent on participants in WRP Incentives Only relative to the amount the government saved from reduced public assistance benefits. Taken together, that represented a cost of about $170 to society.

Studies of this Intervention

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Study Quality Rating Study Counts per Rating
High High 3