“The findings — based on field observations and interviews, staff surveys, surveys of families in MFIP and AFDC, and administrative records data — indicate that MFIP was implemented as intended and produced important changes in the way benefits and services are provided to new welfare applicants (those applying for welfare when they entered the study) and recipients (those already receiving welfare when they entered the study). In addition, after 18 months MFIP did meet its goals for single parents living in urban areas who were long-term welfare recipients when they entered the program. These individuals, who were receiving welfare for at least 24 of the prior 36 months when they entered the study, represent the most disadvantaged segment of the welfare caseload and one that has traditionally been hard to help”(3).

Interim Impact Findings

“For these long-term recipients, MFIP’s combination of financial incentives and mandatory services substantially increased employment and earnings; 18 months after random assignment, the proportion of recipients in the MFIP program who were employed was nearly 40 percent higher than among recipients in the AFDC program. In addition, the financial incentives allowed working families to supplement their earnings with partial welfare grants. The net result over the 18-month period was a 13 percent increase in total family income and a 16 percent reduction in poverty among these families, although it came at the cost of an 8 percent increase in welfare payments”(3).

“MFIP was not as successful for single parents in urban areas who were applying for welfare when they entered the program (applicants). Because participation in MFIP’s employment services is mandatory only for people who have received welfare for two or more years, these new applicants received only MFIP’s financial incentives for their first 18 months in the program. The financial incentives had only a modest effect on their employment behavior, with no significant effect by the end of follow-up, most likely because many of them would have worked anyway. Furthermore, MFIP increased welfare payments by 27 percent, primarily because the enhanced incentives enabled families to continue to receive benefits while working. When families were allowed to combine work with some welfare benefits, their total income increased by nearly 7 percent and the incidence of poverty declined by more than 6 percent”(3).

“MFIP was also not as successful among long-term welfare recipients in rural areas. It had no lasting effects on their employment or earnings — although it increased welfare receipt because, again, families were allowed to combine welfare and work, and the increase in benefits substantially reduced poverty”(3).

“To date, the results suggest that the increases in income and reductions in poverty come, in large part, from MFIP’s financial incentives. Adding a mandate to participate in employment-focused activities along with a reinforced "it pays to work" message is primarily responsible for generating the employment and earnings gains. Thus, it is the combination of these two policies that achieves the multiple goals of increased employment and earnings and reduced poverty for long-term recipients”(3).

For single-parent long-term recipients — a major focus of the program and the evaluation — MFIP had strikingly consistent positive effects across a range of adult, child, and family outcomes. It also led to some increase in welfare receipt and welfare costs.

For two-parent recipient families, MFIP reduced the financial pressure for both parents to work and increased marital stability.

MFIP had more mixed effects — generally positive but smaller — on single-parent recent applicants than on single-parent long-term recipients.

For welfare applicants in two-parent families, MFIP had similar effects on employment and earnings as for recipients in two-parent families. However, MFIP did not increase family income for these applicants, who typically leave welfare quickly and were less likely to be significantly affected by the program.

Because MFIP increased support for working families — through financial incentives and, for two-parent families, less restrictive eligibility rules — the program cost between $1,900 and $3,800 more per family per year than did the AFDC system.

• MFIP decreased divorce by 3.5 percentage points, or by about 25 percent, seven years after study entry. Effects on divorce primarily occurred late in the follow-up period, even after June 1998, when the MFIP pilot study ended and a statewide MFIP evaluation was implemented.
• For two parent recipients who were married at study entry, MFIP increased marriage stability by decreasing divorce.
• Among cohabitating couples-- coupled parents who shared a biological child at study entry -- the cumulative rate of ever marrying during the seven-year follow-up period was similar for the MFIP and AFDC (control) groups.
• However, MFIP cohabitating couples were 66% less likely than AFDC couples to get divorced in the follow-up period.
• MFIP's effects on marriage stability were most pronounced among black recipient families, reducing rates of divorce among black married couples by over 70%.
  

• Within the AFDC (control group), two parent family applicants were more likely to divorce and less likely to marry than two parent recipient families.
• MFIP had no cumulative effect on divorce among two parent applicant families, but did somewhat increase divorce late in the follow up period.

• For the full sample of single-parent families, MFIP increased employment, earnings, welfare receipt, and income up through Year 4 of the follow-up period, after which MFIP’s effects on economic outcomes dissipated. In two-parent families, through Year 4 of the follow-up period, MFIP reduced employment among second earners, usually women; however, the reduction in family earnings was offset by higher welfare benefits, resulting in no effects on family income.
• MFIP’s economic effects persisted up until Year 6 for several of the most disadvantaged groups of single parents, including those with little employment history, long-term welfare receipt, and no high school diploma or General Educational Development (GED) certificate and those with a combination of these characteristics.
• Among the full sample of single-parent families, MFIP had no overall effect on the elementary school achievement of very young children, but, in line with results for parents, positive effects did occur for several subgroups of young children for whom data are available — notably children of long-term recipients and of the most disadvantaged families. The program had no effect on elementary school achievement of young children in two-parent families.
• By Year 6, marriage rates were similar for MFIP and AFDC single-parent families overall, but the small positive effect MFIP had at the three year point did persist for some subgroups of single-parent families. For two-parent families, MFIP’s effects on divorce varied by the prior welfare history of the two-parent family, with small reductions occurring among recipient families and an opposite pattern occurring among newer applicants, leading to no overall effect.