Minnesota Family Investment Program (MFIP) (as compared with MFIP Incentives Only)

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 used several strategies to encourage AFDC recipients to find employment and reduce their dependence on public assistance.

First, 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 families work less than 100 hours per month to remain on welfare. Second, MFIP made it less burdensome for families to receive benefits by combining families’ AFDC, Food Stamps, and Family General Assistance (a state-funded cash assistance program) into one monthly cash payment. Third, MFIP paid child care costs directly to providers rather than reimbursing parents for costs paid out of pocket. Finally, long-term welfare recipients were required—and others could volunteer—to participate in employment and training activities that focused on rapid entry into employment.

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

The effectiveness of MFIP when compared with the effectiveness of MFIP Incentives Only indicates the effect of being referred to the set of services that includes those unique to MFIP—or in other words, how much better the offer of MFIP meets participants’ needs than the offer of MFIP Incentives Only does. 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 the state's usual employment and training program for AFDC recipients. Although MFIP required long-term welfare recipients to participate in employment and training activities, no MFIP Incentives Only participants faced this mandate. The evaluation comparing MFIP with MFIP Incentives Only also tested the effectiveness of MFIP and MFIP Incentives Only compared with usual services (individuals receiving AFDC and STRIDE, Minnesota's welfare-to-work program, or individuals receiving only AFDC). The evaluation also examined the effectiveness of a version of MFIP implemented in Ramsey County, MN, that used a more work-first approach.