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Summary

The Minnesota Family Investment Program (MFIP) used financial work incentives and mandatory employment and training activities to increase employment and reduce poverty among Aid to Families with Dependent Children (AFDC) recipients.

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 was evaluated with single-parent families, two-parent families, and families in Ramsey County(MFIP-R). The MFIP program for single-parent and two-parent families was implemented in three urban Minnesota counties (Hennepin, Anoka, and Dakota) and four rural Minnesota counties (Lacs, Morrison, Sherburne, and Todd), and the MFIP-R program was implemented in Ramsey County, MN. MFIP used the following strategies to encourage AFDC recipients to find employment and reduce their dependence on public assistance:

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 family work less than 100 hours per month to remain on welfare.
MFIP made it easier for families to receive benefits by combining families’ AFDC, Food Stamps (provided in cash, rather than coupons), and Family General Assistance (a state-funded cash assistance program) into one monthly payment.
MFIP paid child care costs directly to providers rather than reimbursing parents for costs paid out of pocket.
Long-term welfare recipients were required and others could volunteer to participate in employment and training activities that focused on rapid entry into employment. Long-term welfare recipients were single-parent families that had received AFDC for two of the past three years; two-parent families that had received AFDC for more than six months; Ramsey County single-parent families that had received AFDC for more than one year; and Ramsey County two-parent families that had received AFDC for more than six months.
Single-parent or two-parent families 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, whereas Ramsey County families were required to partake in a one-week job skills workshop that was followed by seven weeks of guided job search and group activities.
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. Participants 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.

The study also evaluated the MFIP Incentives Only program.

1037.1037.02-Study of Minnesota F

Populations and employment barriers: Public benefits recipients, Cash assistance recipients, Parents

1037.1037.01-Study of Minnesota F

Populations and employment barriers: Public benefits recipients, Cash assistance recipients, Unemployed, Parents, Single parents

3148.3148.02-Study of Minnesota F

Populations and employment barriers: Public benefits recipients, Cash assistance recipients, Adults (age 25+), Parents

3148.3148.01-Study of Minnesota F

Populations and employment barriers: Public benefits recipients, Cash assistance recipients, Parents, Single parents

Implementation at a glance

Primary service

Earned income disregards

Program services

Case management, Childcare and/or early education, Earned income disregards, Education and Training, Job readiness, Job search assistance, Performance- or behavior-based financial incentives, Transportation assistance, Work supports

Review services terms

Setting(s)

Tested in multiple settings

Year evaluation began

1994

Implementing organization(s)Minnesota Department of Human Services

Effectiveness rating and effect by outcome domain

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Outcome domain	Term	Effect in 2024 dollars and percentages	Effect in standard deviations	Sample size
Increase earnings	Short-term	$0 per year	0.000	0
	Long-term	$0 per year	0.000	0
	Very long-term	$0 per year	0.000	0
Increase employment	Short-term	0% (in percentage points)	0.000	0
	Long-term	0% (in percentage points)	0.000	2256
	Very long-term	0% (in percentage points)	0.000	0
Decrease benefit receipt	Short-term	$0 per year	0.000	0
	Long-term	$0 per year	0.000	0
	Very long-term	$0 per year	0.000	0
Increase education and training	All measurement periods

Effectiveness ratings

Well- supported
Supported
Mixed support
Not supported
Insufficient evidence
Cannot assess support

Studies of this program

Study quality rating	Study counts per rating
Low	2
High	2

Program cost

No cost information available.

Cost results

	Estimates (in 2024 dollars)	Quality of cost analyses that produced the estimates
Total program cost, per participant	$88,658	Outstanding quality
Net benefit to participants, per participant	$962–$18,270	Outstanding quality

Cost information

How much did the program cost per participant?

The average total cost per participant was $88,658 in 2024 dollars. This figure is based on cost information reported in one cost study reviewed by Pathways to Work (for details, see the FAQ). This cost estimate was for an analysis of the single-parent long-term recipients in urban counties group. (Study analyses of single-parent applicants, two-parent recipients, and two-parent applicant groups only reported the net cost [difference in cost between the program and comparison group] and not the total program cost.) This study received a rating of Outstanding quality for the cost analysis.

How much did the program cost relative to the benefits it generated?

A cost-benefit analysis was conducted in the cost study reviewed, with the study receiving a rating of Outstanding quality. Cost-benefit analysis estimates were presented separately for the following four groups: single parents who were long-term recipients of AFDC (single-parent recipients), single-parents who were recent applicants to AFDC (single-parent applicants), two-parent families who were long-term recipients of AFDC (two-parent recipients), and two-parent families who were recent applicants to AFDC (two-parent applicants). The study also provided subgroup estimates for urban and rural single-parent recipients and applicants, which are not reported here.

The net benefit to participants ranged from $962 to $18,270 per participant in 2024 dollars as follows: two-parent applicants ($962), two-parent recipients ($12,662), single-parent applicants ($14,337), single-parent recipients ($18,270). This means that the net program benefit to participants (difference in benefits between the program and comparison group) ranged from $962 more than the net cost of the program to participants in the two-parent applicants group to $18,270 more than the net cost of the program to participants in the single-parent recipients group. The estimate is expressed as the net present value, which accounts for differences in the timing of when benefits and costs occurred. In addition, the net benefit to government ranged from -$35,367 to -$17,888 per participant in 2024 dollars as follows: two-parent recipients (-$35,367 per participant), two-parent applicants (-$23,576 per participant), single-parent recipients (-$18,032 per participant), single-parent applicants (-$17,788 per participant). The net benefit to society ranged from -$21,822 to -$44 per participant in 2024 dollars as follows: two-parent recipients (-$21,822 per participant), two-parent applicants (-$21,523 per participant), single-parent recipients (-$3,510 per participant), single-parent applicants (-$44 per participant). The net benefit to taxpayers ranged from -$34,484 to -$17,846 per participant in 2024 dollars as follows: two-parent recipients (-$34,484 per participant), two-parent applicants (-$22,485 per participant), single-parent recipients (-$18,314 per participant), single-parent applicants (-$17,847 per participant).

Cost information is not directly comparable across programs due to differences in the categories of costs reported and program length. Cost information is not an official price tag or guarantee.

Implementation details

Dates covered by study

MFIP began in April 1994, and individuals were included in the evaluation if they had newly enrolled in or recertified for MFIP between April 1 and December 31, 1994. Outcomes were measured at 18 months and 3 years after enrollment. MFIP is still running today, but MFIP Incentives Only does not appear to be currently active.

Organizations implementing program

MFIP was implemented by the Minnesota Department of Human Services, with services provided at the county level.

Populations served

All AFDC, Food Stamps, or Family General Assistance applicants and recipients were eligible to participate in MFIP. In comparison, MFIP Incentives Only focused on single-parent households that were either current recipients of AFDC or new program applicants.

At the time of random assignment, three-fourths of participants were living in an urban county, with the majority of them living in Minneapolis in Hennepin County, MN. Nearly all of the participants were female. About half were White, not Hispanic, and around a third of the participants were Black, not Hispanic. About half of the participants had never been married, and about a quarter of them were divorced. More than half of the participants had either a GED or a high school diploma. The average age of participants was between 29 and 30 years old.

Description of services implemented

MFIP was created under the federal Section 1115 waivers to test new approaches to achieving AFDC’s goals. MFIP provided financial incentives for work through the following:

Adjusting AFDC policies. MFIP increased the basic AFDC grant by 20 percent if participants worked; reduced AFDC benefits by only 62 percent for every earned dollar (instead of reducing benefits by a dollar for every dollar earned); and eliminated the work history requirements and the 100-hour rule for two-parent families, which had required that two-parent family work fewer than 100 hours per month to remain on welfare.
Making it less burdensome for families to receive benefits. MFIP combined families’ AFDC, Food Stamps, and Family General Assistance (a state-funded cash assistance program) into one monthly cash payment.
Paying child care costs directly. MFIP paid child care costs directly to providers rather than reimbursing parents for costs paid out of pocket.

Long-term welfare recipients were required—and others could volunteer—to participate in employment and training activities that focused on rapid entry into employment. Long-term welfare recipients were single-parent families that had received AFDC for two of the past three years or two-parent families that had received AFDC for more than six months. The MFIP employment and training activities were designed to be shorter than Minnesota’s AFDC education and training program (known as STRIDE) to motivate individuals to find work.

Participants could 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. Three types of job search activities were available: job search classes, job search club, or individual job search. 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.

Service intensity

MFIP financial workers spent about an hour completing initial eligibility interviews (or recertification interviews, if the individual was already enrolled in the state welfare system), and up to 14 minutes of this time was dedicated to discussing employment and training options. Financial workers also spent this time explaining how the participant’s grant would change for the better if the participant found work. Financial workers were supposed to contact their clients every 90 days, but in practice, they contacted about 58 percent of their caseload every 3 months.
Case managers typically contacted their clients once a month, either in person or by phone. They reiterated the financial incentives for finding work to their clients and suggested education or training that would suit the client.

Job search classes ran for one to two weeks. Job clubs did not have a unified structure throughout the state and did not require individuals to contact a specific number of employers or answer a certain number of ads. In one county, the job club ran for two hours a day for two days a week, whereas another county had the job club run for two days a week but only required attendance for one day per week.

Nearly 60 percent of the MFIP long-term recipients participated in any employment and training activity, with the most popular activities being career workshops and job searches. Almost half of MFIP short-term recipients participated in any employment and training activity, with the most popular activities being job searches and postsecondary education.

The financial incentives remained in effect as long as clients remained in MFIP.

Comparison conditions

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 Minnesota’s welfare-to-work program if they (1) had been receiving AFDC benefits for 36 of the previous 60 months, (2) were younger than 24 without a high school diploma or GED or without significant work experience, or (3) were within 2 years of becoming ineligible for AFDC benefits because their youngest child was age 16 or older. Although MFIP required long-term welfare recipients to participate in employment and training activities, no MFIP Incentives Only participants faced this mandate.

Partnerships

Some employment and training services were provided by STRIDE. STRIDE is a mainly voluntary program for individuals who receive AFDC benefits. STRIDE, similar to MFIP, was implemented by the Minnesota Department of Human Services.

Staffing

Financial workers determined a family’s eligibility to receive government assistance, calculated benefits, and processed grants.

Case managers had relatively small caseloads (an average of 40 individuals) and discussed the MFIP financial incentives, benefits, and education and training opportunities available to their clients.

The study authors did not include information on the number of staff or their training, degrees, or certifications.

Fidelity measures

The study did not discuss any tools to measure fidelity to the program model.

Funding source

MFIP is funded by the Minnesota Department of Human Services.

Local context

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

Characteristics of research participants
Black or African American	25%
White, not Hispanic	62%
Another race	5%
American Indian or Alaska Native	6%
Hispanic or Latino of any race	3%

State(s) where implemented

West North Central, Minnesota

Pathways to Work refers to programs by the names used in study reports or manuscripts. Some program names may use language that is not consistent with our style guide, preferences, or the terminology we use to describe populations.

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Highlights

Program description

Evaluation

Effect on long-term earnings

Cost per Participant