MFIP used financial work incentives and mandatory employment and training activities to increase employment and reduce poverty among Aid to Families with Dependent Children (AFDC) recipients.

MFIP used financial work incentives and mandatory employment and training activities to increase employment and reduce poverty among Aid to Families with Dependent Children (AFDC) recipients.

MFIP was one of the demonstration projects made possible by Section 1115 waivers to the rules in effect at the time for the AFDC program. These Section 1115 waivers allowed states to test new approaches to advance the objectives of the AFDC program.

MFIP was evaluated with single-parent families, two-parent families, and families in Ramsey County(MFIP-R). The MFIP program for single-parent and two-parent families was implemented in three urban Minnesota counties (Hennepin, Anoka, and Dakota) and four rural Minnesota counties (Lacs, Morrison, Sherburne, and Todd), and the MFIP-R program was implemented in Ramsey County, MN. MFIP used the following strategies to encourage AFDC recipients to find employment and reduce their dependence on public assistance:

  • MFIP provided financial incentives for work by (1) increasing the basic AFDC grant by 20 percent if participants worked; (2) reducing AFDC benefits by only 62 percent for every earned dollar (rather than dollar for dollar); and (3) eliminating the work history requirements and the 100-hour rule for two-parent families, which had required that two-parent family work less than 100 hours per month to remain on welfare.
  • MFIP made it easier for families to receive benefits by combining families’ AFDC, Food Stamps (provided in cash, rather than coupons), and Family General Assistance (a state-funded cash assistance program) into one monthly payment.
  • MFIP paid child care costs directly to providers rather than reimbursing parents for costs paid out of pocket.
  • Long-term welfare recipients were required and others could volunteer to participate in employment and training activities that focused on rapid entry into employment. Long-term welfare recipients were single-parent families that had received AFDC for two of the past three years; two-parent families that had received AFDC for more than six months; Ramsey County single-parent families that had received AFDC for more than one year; and Ramsey County two-parent families that had received AFDC for more than six months.
  • Single-parent or two-parent families had the option to choose from various MFIP employment and training activities, which included job search, education and job training programs, and case management to develop plans for employment, whereas Ramsey County families were required to partake in a one-week job skills workshop that was followed by seven weeks of guided job search and group activities.
  • Participants were exempt from employment and training activities if they were working at least 30 hours per week, had a child younger than 1, or met “good cause” criteria. Participants who did not participate in employment and training activities could have their benefits reduced by 10 percent.

The financial incentives remained in effect as long as clients remained in MFIP. All AFDC, Food Stamps, or Family General Assistance applicants and recipients were eligible to participate in MFIP.

The study also evaluated the MFIP Incentives Only program.

Year evaluation began: 1994
Populations and employment barriers: Parents
Intervention services: Academic instruction, Financial incentives, Sanctions, Supportive services, Training, 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 $0 per year 0.000 0
Long-term Little evidence to assess support $0 per year 0.000 0
Very long-term Little evidence to assess support $0 per year 0.000 0
Increase employment Short-term Little evidence to assess support 0% (in percentage points) 0.000 0
Long-term Little evidence to assess support 0% (in percentage points) 0.000 0
Very long-term Little evidence to assess support 0% (in percentage points) 0.000 0
Decrease benefit receipt Short-term Little evidence to assess support $0 per year 0.000 0
Long-term Little evidence to assess support $0 per year 0.000 0
Very long-term Little evidence to assess support $0 per year 0.000 0
Increase education and training All measurement periods No evidence to assess support

Participant race and ethnicity
Black or African American
25%
White
62%
Hispanic or Latino of any race
3%
American Indian or Alaska Native
6%
Unknown, not reported, or other
5%

Implementation details

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Dates covered by study

MFIP began in April 1994, and individuals were included in the evaluation if they had newly enrolled in or recertified for MFIP between April 1 and December 31, 1994. Outcomes were measured at 18 months and 3 years after enrollment. MFIP is still running today, but MFIP Incentives Only does not appear to be currently active.

Organizations implementing intervention

MFIP was implemented by the Minnesota Department of Human Services, with services provided at the county level.

Populations served

All AFDC, Food Stamps, or Family General Assistance applicants and recipients were eligible to participate in MFIP. In comparison, MFIP Incentives Only focused on single-parent households that were either current recipients of AFDC or new program applicants.

At the time of random assignment, three-fourths of participants were living in an urban county, with the majority of them living in Minneapolis in Hennepin County, MN. Nearly all of the participants were female. About half were White, not Hispanic, and around a third of the participants were Black, not Hispanic. About half of the participants had never been married, and about a quarter of them were divorced. More than half of the participants had either a GED or a high school diploma. The average age of participants was between 29 and 30 years old.

Description of services implemented

MFIP was created under the federal Section 1115 waivers to test new approaches to achieving AFDC’s goals. MFIP provided financial incentives for work through the following:

  • Adjusting AFDC policies. MFIP increased the basic AFDC grant by 20 percent if participants worked; reduced AFDC benefits by only 62 percent for every earned dollar (instead of reducing benefits by a dollar for every dollar earned); and eliminated the work history requirements and the 100-hour rule for two-parent families, which had required that two-parent family work fewer than 100 hours per month to remain on welfare.
  • Making it less burdensome for families to receive benefits. MFIP combined families’ AFDC, Food Stamps, and Family General Assistance (a state-funded cash assistance program) into one monthly cash payment.
  • Paying child care costs directly. MFIP paid child care costs directly to providers rather than reimbursing parents for costs paid out of pocket.

Long-term welfare recipients were required—and others could volunteer—to participate in employment and training activities that focused on rapid entry into employment. Long-term welfare recipients were single-parent families that had received AFDC for two of the past three years or two-parent families that had received AFDC for more than six months. The MFIP employment and training activities were designed to be shorter than Minnesota’s AFDC education and training program (known as STRIDE) to motivate individuals to find work.

Participants could choose from various MFIP employment and training activities, which included job search, education and job training programs, and case management to develop plans for employment. Three types of job search activities were available: job search classes, job search club, or individual job search. Participants were exempt from employment and training activities if they were working at least 30 hours per week, had a child younger than 1, or met good cause criteria. Long-term recipients who did not participate in employment and training activities could have their benefits reduced by 10 percent.

Service intensity

MFIP financial workers spent about an hour completing initial eligibility interviews (or recertification interviews, if the individual was already enrolled in the state welfare system), and up to 14 minutes of this time was dedicated to discussing employment and training options. Financial workers also spent this time explaining how the participant’s grant would change for the better if the participant found work. Financial workers were supposed to contact their clients every 90 days, but in practice, they contacted about 58 percent of their caseload every 3 months.
Case managers typically contacted their clients once a month, either in person or by phone. They reiterated the financial incentives for finding work to their clients and suggested education or training that would suit the client.

Job search classes ran for one to two weeks. Job clubs did not have a unified structure throughout the state and did not require individuals to contact a specific number of employers or answer a certain number of ads. In one county, the job club ran for two hours a day for two days a week, whereas another county had the job club run for two days a week but only required attendance for one day per week.

Nearly 60 percent of the MFIP long-term recipients participated in any employment and training activity, with the most popular activities being career workshops and job searches. Almost half of MFIP short-term recipients participated in any employment and training activity, with the most popular activities being job searches and postsecondary education.

The financial incentives remained in effect as long as clients remained in MFIP.

Comparison conditions

MFIP Incentives Only participants were eligible for all the financial incentives and changes to benefits made under MFIP, but MFIP Incentives Only participants could not receive MFIP employment and training services. They could, however, participate voluntarily in employment and training under Minnesota’s welfare-to-work program if they (1) had been receiving AFDC benefits for 36 of the previous 60 months, (2) were younger than 24 without a high school diploma or GED or without significant work experience, or (3) were within 2 years of becoming ineligible for AFDC benefits because their youngest child was age 16 or older. Although MFIP required long-term welfare recipients to participate in employment and training activities, no MFIP Incentives Only participants faced this mandate.

Partnerships

Some employment and training services were provided by STRIDE. STRIDE is a mainly voluntary program for individuals who receive AFDC benefits. STRIDE, similar to MFIP, was implemented by the Minnesota Department of Human Services.

Staffing

Financial workers determined a family’s eligibility to receive government assistance, calculated benefits, and processed grants.

Case managers had relatively small caseloads (an average of 40 individuals) and discussed the MFIP financial incentives, benefits, and education and training opportunities available to their clients.

The study authors did not include information on the number of staff or their training, degrees, or certifications.

Local context

MFIP was implemented in seven counties in Minnesota: three urban counties (Hennepin, Anoka, and Dakota) and four rural counties (Mille Lacs, Morrison, Sherburne, and Todd).

Fidelity measures

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

Funding source

MFIP is funded by the Minnesota Department of Human Services.

Cost information

The study reported costs for subgroup of single-parent, long-term recipients. The cost of running MFIP was, on average, $1,736 per year per family over five years, compared with the average cost of $1,705 per MFIP Incentives Only family. Over five years, the average family enrolled in MFIP saw an average financial gain of $2,044 per year in 1996 dollars, compared with the average financial gain of $1,578 experienced by an MFIP Incentives Only family.

Studies of this intervention

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Study quality rating Study counts per rating
Low Low 2
High High 2