Con a voluntary workfare program change the behavior of welfare recipients? new evidence from washington state's family independence program (FIP)

This article examines a voluntary workfare demonstration program in Washington state—the Family Independence Program (FIP)—designed to encourage longer-term investments in employment and training (E&T) activities, with the ultimate objective of achieving economic self-sufficiency for welfare recipients. A unique longitudinal data set is used to compare E&T enrollment and the labor market and welfare outcomes for a sample of FIP clients and a comparison group of Aid to Families with Dependent Children (AFDC) recipients subject to the state's mandatory workfare requirements. Correcting for self-selection, the estimates obtained indicate that FIP's combination of financial incentives, enhanced support services, and a more client-centered environment results in an E&T enrollment rate that is from 9 to 12 percentage points higher during the post-FIP June 1989 to May 1990 period than the rate for respondents subject to the state's workfare program. Relative to the enrollment rate calculated for nonparticipants, FIP net impact estimates in this range represent a 33 to 44 percent increase in E&T enrollment. These results offer a more positive assessment of the potential of a voluntary workfare program to affect the behavior of welfare recipients than does the large-scale FIP evaluation carried out by the Urban Institute. However, both the evidence presented here and the Urban Institute's evaluation suggest that FIP had little impact on employment and earnings but significantly increased welfare receipt and the level of welfare benefits.