The Minnesota Family Investment Program (MFIP) is a welfare reform initiative based on enhancing welfare recipients' incentives to get a job and requiring long-term welfare recipients to participate in employment-focused activities. The effects of the MFIP were compared to those of the Aid to Families with Dependent Children (AFDC) program through an analysis of data on the employment, earnings, and welfare receipt of more than 9,000 individuals who had been randomly assigned to the MFIP or the traditional AFDC program during an 8-month period. Data were collected from field observations and interviews, staff surveys, surveys of families in both programs, and administrative records. After 18 months, the MFIP program resulted in the following: a 40% higher employment rate; a 13% increase in total family income; and a 16% reduction in poverty (albeit at an 8% increase in welfare payments). (Sixty tables/figures are included. Appended are the following: selected characteristics, opinions, and attitudes of MFIP report sample members; MFIP 12-month survey response analysis; additional implementation findings; expected impacts of MFIP's enhanced financial incentives; short-term recipient findings; evaluation of the STRIDE Program in Hennepin County, Minnesota; and 26 additional tables/figures. Contains 16 references.) (MN)