Summarizes interventions that use financial incentives and sanctions to improve employment outcomes of low-income adults, as described in rigorous studies conducted from 1990 to mid-2014, and provides suggestions for future research to more thoroughly understand the impact of financial incentives and sanctions.

The Office of Planning, Research, and Evaluation (OPRE) in the Administration for Children and Families (ACF) sponsored the Employment Strategies for Low-Income Adults Evidence Review (ESER)--a systematic review of the literature published from 1990 to mid-2014 on the effect of employment and training programs and strategies for low-income individuals. This brief is one in a “series of briefs [that] offers a synthesis of the findings of ESER for policymakers, practitioners, and officials who seek to improve the employment and earnings outcomes of low-income adults through research-based interventions. This brief focuses on financial incentives and sanctions interventions…from 1990 to mid-2014” (p.1).

“Trained reviewers examined the strength of the causal evidence for each study…then rated each study based on its rigor (not on the effectiveness of the intervention).…The ESER team identified a ‘primary strategy’ for each intervention[:]…the service most treatment group members received and most comparison group members did not.…The team determined the primary strategy for each intervention by having two reviewers independently read the description of each intervention, identify a primary strategy, compare their assessments, and discuss until they reached agreement” (p.2). The team only reviewed studies that used “randomized controlled trials or comparison group designs” (p.1).

“This brief describes 12 interventions identified by ESER that featured financial incentives or sanctions as their primary strategy and their impacts on employment and earnings” (p.1). “It also profiles four promising interventions and their impacts in more detail, including impacts on the receipt of public benefits” (p.1). Lastly, the authors provide recommendations for future studies (p.10).

“Of the 12 interventions identified by ESER as primarily using financial incentives and sanctions, most were delivered to parents receiving public benefits. Eight of the interventions were exclusively delivered to people who were public benefits clients, either applicants or participants. Typically, these clients were single mothers. The other 4 interventions were delivered to a broader group of low-income people” (p.2).

“Eleven of the 12 interventions provided incentives to help participants work more or earn more money. Fewer than half of the interventions established both incentives and sanctions. The most common approach was to establish a higher earnings disregard”(p.3).

(Abstractor: Author and Website Staff)