Self-Sufficiency Project — Canada

Summary

The Self-Sufficiency Project is one of the most rigorous tests of whether financial incentives alone can permanently alter employment behavior. The answer was clear and sobering: they can change behavior while the incentive is in place, but the change largely reverses when the incentive ends. During the supplement period, SSP participants worked substantially more and relied less on welfare — a genuine policy success by conventional measures. But five years out, two years after the supplement ended, the treatment and control groups had converged. Participants had not acquired new skills, credentials, or employer relationships during the supplement period that would sustain employment afterward. The contrast with skills-based programs like Year Up — which also change employment rates but produce lasting effects — suggests that what matters for durable self-sufficiency is not just the financial incentive to work, but the acquisition of specific human capital that raises the returns to working.

Research question

"Does a time-limited financial supplement — available only to long-term welfare recipients who find full-time work within one year — increase employment and reduce welfare dependency permanently?"

Methodology

Result

Mixed

During supplement period (year 1–3): employment +14 pp; welfare exit substantially higher; earnings higher. At 5-year follow-up (2 years after supplement ended): employment difference shrank to +2 pp (statistically insignificant); welfare receipt converged to control levels; permanent self-sufficiency not achieved for majority of participants

Evidence strength

Strong

Randomized controlled trial with large sample.

Replication status

Open for replication