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Summary

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

MFIP Incentives Only 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 Incentives Only used financial incentives to encourage AFDC recipients to work and reduce their dependence on public assistance.

First, MFIP Incentives Only increased the basic AFDC grant by 20 percent if participants worked and reduced AFDC benefits by only 62 percent for every earned dollar (rather than dollar for dollar). MFIP Incentives Only also made it less burdensome for families to receive benefits by combining families’ AFDC, Food Stamps, and Family General Assistance (a state-funded cash assistance program) into one monthly cash payment. Finally, MFIP Incentives Only paid child care costs directly to providers rather than reimbursing parents for costs paid out of pocket. Clients could receive MFIP Incentives Only services as long as they remained enrolled in AFDC. All AFDC, Food Stamps, or Family General Assistance applicants and recipients were eligible to participate in MFIP Incentives Only. The MFIP Incentives Only program was implemented in three urban Minnesota counties (Hennepin, Anoka, and Dakota). The evaluation of MFIP Incentives Only, which focused on single-parent households that were either recent applicants to MFIP or long-term recipients, was part of a larger evaluation of MFIP. The larger evaluation also tested the effectiveness of MFIP, a version of the program that included a work requirement for long-term recipients, and compared the effectiveness of MFIP Incentives Only and MFIP.

3147.3147.04-Study of Minnesota F
Populations and employment barriers: Public benefits recipients, Cash assistance recipients, Parents, Single parents
3147.3147.03-Study of Minnesota F
Populations and employment barriers: Public benefits recipients, Cash assistance recipients, Unemployed, Parents, Single parents

Implementation at a glance

Primary service
Earned income disregards
Program services
Childcare and/or early education, Earned income disregards, Performance- or behavior-based financial incentives, Transportation assistance
Review services terms
Setting(s)
Urban only
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 Effectiveness rating Effect in 2024 dollars and percentages Effect in standard deviations Sample size
Increase earnings Short-term Little evidence to assess support $0 per year 0.000 0
Long-term Little evidence to assess support unfavorable $-1,640 per year -0.045 4882
Very long-term Cannot assess support
Increase employment Short-term Supported favorable 2% (in percentage points) 0.041 4882
Long-term Supported favorable 2% (in percentage points) 0.045 4882
Very long-term Cannot assess support
Decrease benefit receipt Short-term Little evidence to assess support $0 per year 0.000 0
Long-term Little evidence to assess support $0 per year 0.000 0
Very long-term Cannot assess support
Increase education and training All measurement periods Cannot assess support

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
High High 2
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Program cost

No cost information available.

Cost results

Estimate (in 2024 dollars) Quality of cost analysis that produced the estimate
Total program cost, per participant $79,654
Outstanding quality
Net benefit to participants, per participant $14,572
Outstanding quality

Cost information

How much did the program cost per participant?

The average total cost per participant was $79,654 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 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. The net benefit to participants was $14,572 per participant in 2024 dollars. This means that the net program benefit to participants (difference in benefits between the program and comparison group) was $14,572 more than the net cost of the program to participants. The estimate also accounts for differences in the timing of when benefits and costs occurred. In addition, the net benefit to government was -$15,747 per participant in 2024 dollars. The net benefit to society was -$1,171 per participant in 2024 dollars. The net benefit to taxpayers was -$14,743 per participant in 2024 dollars.

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.

 

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Implementation details

Dates covered by study

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

Populations served

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 participants had a GED or a high school diploma.

Description of services implemented

MFIP Incentives Only was created under the federal Section 1115 waivers to test new approaches to achieving AFDC’s goals. MFIP Incentives Only increased the basic AFDC grant by 20 percent if participants worked. It also reduced AFDC benefits by only 62 percent for every earned dollar instead of reducing benefits by one dollar for every dollar earned. MFIP Incentives Only made it less burdensome 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. Finally, MFIP Incentives Only paid child care costs directly to providers rather than reimbursing parents for costs paid out of pocket. Although MFIP Incentives Only participants could not receive MFIP employment and training services, they could volunteer to receive employment and training services from STRIDE (Minnesota’s AFDC welfare-to-work program). MFIP Incentives Only participants were eligible for STRIDE services 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.

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 STRIDE employment and training options. They also spent this time explaining how a 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 per quarter. Individuals could receive MFIP Incentives Only as long as they remained enrolled in AFDC.

Comparison conditions

Individuals in the evaluation were randomly assigned to one of four groups: MFIP, MFIP Incentives Only, AFDC, or AFDC/No Services. The MFIP group received financial incentives and was also required to participate in MFIP employment and training services. The AFDC group received typical services and benefits from Minnesota’s AFDC program and could voluntarily participate in STRIDE employment and training services. The AFDC/No Services group received typical services and benefits from Minnesota’s AFDC program but could not participate in STRIDE employment and training services.

Partnerships

Some employment and training services were provided by STRIDE STRIDE is a mainly voluntary employment and training program for individuals that 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.

STRIDE case managers had relatively small caseloads (an average of 40 individuals). The case manager’s knowledge of the MFIP program was sometimes limited because there were few MFIP Incentives Only cases in each STRIDE case manager’s caseload.

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 Incentives Only is funded by the Minnesota Department of Human Services.

The information contained here reflects how the program was implemented at the time of the evaluation.

Local context

MFIP Incentives Only was implemented in three urban counties in Minnesota: Hennepin, Anoka, and Dakota. All three counties are located in the Minneapolis-St. Paul metropolitan area.

Characteristics of research participants
Black or African American
28%
White, not Hispanic
61%
Another race
3%
American Indian or Alaska Native
6%
Hispanic or Latino of any race
2%

The race and ethnicity categories may sum to more than 100 percent if the authors reported race and ethnicity separately; in these cases, we report the category White, rather than White, not Hispanic.

State(s) where implemented

AL AK AZ AR CA CO CT DE DC FL GA HI ID IL IN IA KS KY LA ME MD MA MI MN MS MO MT NE NV NH NJ NM NY NC ND OH OK OR PA RI SC SD TN TX UT VT VA WA WV WI WY Canada

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