Financial incentives to work: A quasi-experimental analysis of in-work cash benefits for single mothers

This study examined the effectiveness of a voluntary welfare-to-work programme nationally implemented in Israel in 2003 and 2004. The programme included temporary in-work benefits in the form of cash bonuses for single mothers who were receiving Income Support Benefits in 2003, when a far reaching change in the Income Support Scheme was implemented. The study focused on the effect of the bonuses on employment rate, earnings, earnings improvement and welfare exit. Based on administrative data and Propensity Score Matching, the evaluation included all single mothers who participated in the voluntary programme and a comparison group of eligible single mothers who did not participate. The programme had a positive long-term effect on employment, earnings and earnings improvement among single mothers. However, it had no effect on their rate of exit from the Income Support Programme.