Building Better Programs

Providing Earnings Supplements to Encourage and Sustain Employment: Lessons from Research and Practice

Earnings supplements provide a monetary payment to working individuals, usually on a monthly basis, to supplement their earnings and raise their income. Typically targeted to low-income parents who are unemployed and provided when they start working, earnings supplements are designed to encourage employment and increase the payoff of low-wage work. They can also provide an important incentive for individuals to stay employed. While the earnings supplement can be a critical component of programs, it is also generally combined with a range of other employment and support services. This brief presents findings, and lessons for policy and practice, from MDRC-conducted studies of five programs that provided earnings supplements and that have been rigorously evaluated using a random assignment research design: the Canadian Self-Sufficiency Project (SSP), the Minnesota Family Investment Program (MFIP), Milwaukee’s New Hope Project, the Texas Employment Retention and Advancement program (ERA), and the United Kingdom Employment Retention and Advancement program (UK ERA). The evaluations all produced positive impacts on employment and were primarily targeted to single parents.  SSP, MFIP, and New Hope operated some time ago (primarily in the 1990s), but long-run follow-up data are available only recently. In addition, more recent evaluation results are available from Texas ERA and UK ERA programs operated in the early 2000s.

MDRC Brief – Providing Earnings Supplements to Encourage and Sustain Employment