Tuesday, September 6, 2011

Supporting Working Families: Supplemental Income

The most recent poverty numbers (2009) indicate that the official poverty rate was 14.3 percent, or 1 in 7 Americans, and that there were 8.8 million families living in poverty. Even with work supports such as child care and transportation assistance, the Earned Income Tax Credit and the Supplemental Nutrition Assistance Program (food Stamps) many working American families still struggle to meet their basic needs. In response to this need, states have implemented programs or enacted policies that provide an additional supplement to individuals’ earnings. These provide cash assistance to working individuals, usually on a monthly basis, to supplement their earnings and raise their income. Typically, these programs are targeted at low-income parents who are unemployed and the supports are provided when they begin working; earnings supplements are designed to encourage employment and increase the payoff of low-wage work. These supports can also provide an important incentive for a parent to stay employed. A brief, Providing Earning Supplements to Encourage and Maintain Employment, by MDRC presents their findings, and lessons for policy and practice, from studies of five programs that provided earnings supplements and that have been rigorously evaluated: The Canadian Self-Sufficiency Project (SSP), the Minnesota Family Investment Program (MFIP), Milwaukee’s New Hope Project, the Texas Employment Retention and Advancement (ERA) program, and the United Kingdom Employment Retention and Advancement (UK ERA) program.

Through these evaluations, MDRC developed lessons learned including:

  • Earnings supplements substantially increased employment and income and, in many cases, employment retention.
  • For the most part, the earnings supplement programs had limited effects on employment advancement.
  • The increased income that individuals typically obtained through the earnings supplement programs improved the well-being of families and their children.
  • Earnings supplements, when combined with employment services, have larger effects than earnings supplements alone.

As well as specific lessons for policy and practice, including:

  • Consider strategies to lengthen the period that individuals receive supplements, and provide additional supports after the supplements end.
  • Market earnings supplements aggressively.
  • Establish relatively straightforward service and eligibility rules and nonwork requirements to maximize take-up rates.

To read the remainder of MDRC’s lessons learned and for additional information on earning supplements or the programs evaluated review Providing Earning Supplements to Encourage and Maintain Employment.

For additional strategies to ensure that Children Grow Up in Safe, Supportive and Economically Successful Families visit