National Evaluation of Welfare-to-Work Strategies

Evaluating Two Approaches to Case Management:
Implementation, Participation Patterns, Costs, and Three-Year Impacts of the Columbus Welfare-to-Work Program

Chapter 1:
Introduction

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Contents

1. Policy Context of the Columbus Programs
2. Historical Context of Integrated and Traditional Case Management
3. Integrated and Traditional Programs in Columbus
4. Evaluation of the Programs in Columbus
   1. Research Questions and Hypotheses
   2. Research Design
5. Key Characteristics of the Program Environment and the Sample Members
   1. Program Environment
   2. Sample Members
6. About This Report
   1. Data Sources, Samples, and Time Frame for the Analysis
   2. Organization of the Report

Endnotes

Welfare program case management is usually organized in one of two ways. Under traditional case management, welfare recipients interact with two separate workers: one worker who deals with welfare eligibility and payment issues, often called income maintenance, and one who deals with employment and training issues. Under integrated case management, welfare recipients work with only one staff member who handles both the income maintenance and employment and training aspects of their case. Although both strategies have certain advantages — for example, the traditional structure allows staff members to specialize in one particular role, and the integrated structure allows staff members to quickly emphasize the importance of employment and eliminates failures in communication between staff members — little information exists on the effects of the two approaches.

This report presents results of a study designed to evaluate the two case management approaches. The study was conducted in Columbus, Ohio,⁽¹⁾ as part of the National Evaluation of Welfare-to-Work Strategies (NEWWS Evaluation), a large-scale study of welfare-to-work programs in seven sites across the nation. The evaluation is being conducted by the Manpower Demonstration Research Corporation (MDRC), under contract to the U.S. Department of Health and Human Services (HHS), with support from the U.S. Department of Education.⁽²⁾ For the study, Columbus ran two separate welfare-to-work programs: one that used integrated case management, referred to in this report as the integrated program, and one that used traditional case management, referred to as the traditional program. Apart from the case management difference, the welfare-to-work programs were the same: They required welfare recipients to participate in activities designed to enhance their skills before looking for work, provided child care and other services to support this participation, and penalized those who did not follow program rules by decreasing their cash grant.

This report provides information on how the integrated and traditional programs were implemented, how the programs affected participation in employment-related activities, and the costs of providing employment-related services in the two programs. It also discusses program effects, measured three years after people entered the programs, on employment, earnings, and welfare receipt.⁽³⁾ (A future NEWWS Evaluation report will follow Columbus sample members for five years and present a comparison of the programs' benefits and costs.)

The evaluation's rigorous research design (discussed later in this chapter) allows researchers to determine the effects of each program, as well as the relative effects of the two programs. In other words, the report provides two types of information. First, it describes and evaluates the effects of two mandatory, education-focused welfare-to-work programs relative to the effects of no special welfare-to-work program. The Columbus programs are different from many previously studied programs that emphasized skills-building. Others have engaged most participants in basic education classes; the Columbus programs engaged many people in basic education but also engaged others in post-secondary education, primarily at two-year colleges. (After the follow-up period covered in this report, Columbus's welfare-to-work program changed its focus to quick entry into the labor market. The next section briefly describes the reformed program.)

Second, this report compares the effectiveness of a welfare-to-work program that used integrated case management with the effectiveness of one that used traditional case management. For example, the report discusses which program engaged more recipients in program activities, which produced larger welfare receipt reductions, and which generated larger earnings increases. Because all features of the two programs were identical, except for their case management approach, these comparisons indicate the relative effectiveness of the two case management approaches.

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I. Policy Context of the Columbus Programs

Columbus's integrated and traditional programs were operated under the Family Support Act (FSA) of 1988. The FSA required states to provide education, employment, and support services to Aid to Families with Dependent Children (AFDC) recipients, who were, in turn, required to participate in the Job Opportunities and Basic Skills Training (JOBS) program created by the act to equip them for work. (The abbreviated AFDC and JOBS are used throughout this report.)

In 1996, Congress passed the Personal Responsibility and Work Opportunity Reconciliation Act (PRWORA), which replaced AFDC with a block grant program, Temporary Assistance for Needy Families (TANF). The law limits most families to five years of federal assistance and created financial incentives for states to run mandatory, work-focused welfare-to-work programs. States must meet work program participation rates that are higher than those under the FSA or face reductions in their TANF block grant amount. Although the PRWORA substantially reformed the nation's welfare policies, its overarching goal is similar to the goal of the FSA: to foster the economic self-sufficiency of welfare recipients through increased employment and decreased welfare receipt.

Columbus (and the rest of Ohio) began operating its TANF program in October 1997, after the follow-up period covered in this report. Ohio Works First, as the name suggests, shifted the focus from building welfare recipients' skills through education to quickly engaging them in jobs. Among other changes, the program limits recipients to three years of cash benefits (with up to two additional years of benefits available under certain circumstances) and increased the severity of penalties for noncompliance with program requirements. At the same time, Columbus began to use integrated case management for all TANF recipients.

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II. Historical Context of Integrated and Traditional Case Management

The idea of administering income maintenance together with employment services and other social services is not new.⁽⁴⁾ After the Social Security Amendments of 1962, which increased federal compensation to state welfare agencies for administrative costs related to social services, most states adopted what was called a casework model. Welfare departments hired caseworkers to review applications for welfare and to attempt to "rehabilitate" recipients so that they would become self-supporting.⁽⁵⁾ Proponents of the casework model believed that it would let welfare staff show concern for recipients during the course of income maintenance discussions and respond to problems, and make it easier for recipients to request services.

Critics of the model questioned its effectiveness and philosophical underpinnings.⁽⁶⁾ In many states, staff members hired to perform casework were not professionally trained and did not know what to look for or how to confront recipients about the problems they observed. Few "hard" services, such as job training, placement assistance, or substance abuse treatment, were provided. Professional social workers argued that "the money function disables or overwhelms the social services."⁽⁷⁾ Conservative lawmakers in Congress feared that liberal caseworkers authorized benefits to which individuals were not entitled. Welfare rights and civil rights groups objected to the assumption that welfare recipients needed rehabilitation and attacked the home visits as an invasion of privacy. Responding to these criticisms, in 1967 the U.S. Department of Health, Education, and Welfare (HEW) issued a directive that urged states to reorganize the administration of their welfare programs by creating separate line agencies to determine welfare eligibility and provide social services.⁽⁸⁾

The 1967 Work Incentive (WIN) program directed some AFDC recipients to participate in employment-related activities and provided funding for services including job counseling and placement, work experience, and on-the-job training. The WIN program fostered the separation of income maintenance and employment services because of its joint administration by HEW and the U.S. Department of Labor. This administrative structure was replicated at the state and local levels in all but two states, resulting in a system in which welfare staff generally referred recipients outside the income maintenance office to employment security agencies for WIN assessment and services.⁽⁹⁾

By the 1970s, the separation of social services and employment services from income maintenance left most welfare offices focused on determining eligibility, authorizing welfare grants, and distributing welfare checks. Many agencies that once recruited college graduates to do casework downgraded the income maintenance role to a clerical level. A goal of minimizing AFDC payment errors replaced the previous decade's goal of rehabilitating welfare recipients. The federal and state governments invested in automated systems that could calculate grant amounts, approve benefits, and send out checks and other notices. Although many welfare agencies became efficient at these tasks, the welfare system remained unpopular with most recipients, taxpayers, and politicians.⁽¹⁰⁾ The WIN program was also criticized for failing to provide effective employment-related services and to enforce a meaningful participation requirement.⁽¹¹⁾

During the 1980s, Congress and HHS attempted to increase work among welfare recipients and reduce welfare receipt but did not try to change or redefine the role of the line worker in local welfare agencies.⁽¹²⁾ To the contrary, the federal government gave state welfare agencies more authority to determine how their welfare-to-work programs would be administered. The Omnibus Budget Reconciliation Act of 1981 gave state welfare agencies the option of running their WIN programs themselves rather than in cooperation with employment security agencies.⁽¹³⁾ The FSA of 1988, which created the JOBS program, made state welfare agencies directly accountable for enrolling welfare recipients in education and work-related services. Under the JOBS program, states were required to develop a coordinated system of service delivery that would involve many public institutions working together on behalf of welfare recipients: welfare agencies, employment security offices, Job Training Partnership Act systems, public schools, and community or state colleges.

Because JOBS involved a brokered model of service delivery and states had to meet minimum participation rates among JOBS-mandatory welfare recipients, case management emerged as a central feature of most states' programs. Typical case management responsibilities included the following: assessing welfare recipients' employability, placing recipients in appropriate services, arranging support services such as child care, overseeing participation in JOBS activities, and initiating financial sanctions for those who did not follow JOBS rules.⁽¹⁴⁾ Most states continued to separate income maintenance and employment-related services, although a 1992 survey found that 17 states operated programs in which JOBS case managers performed an integrated income maintenance and JOBS role.⁽¹⁵⁾ (As this report was being prepared, information was not yet available on the number of states that have elected to combine or separate income maintenance and employment services under the PRWORA.)

Both case management approaches can be argued to have certain advantages and disadvantages. The separation of income maintenance from employment and training tasks allows each staff member to specialize in a particular role. It can also allow the employment services case managers to develop a distinct and often more prestigious professional identity. Common criticisms of this model are that a lack of coordination between income maintenance and employment and training services may prevent the quick enrollment of welfare recipients in work activities or may hinder the imposition of penalties on individuals who do not comply with work participation requirements.

By combining the income maintenance and employment and training roles in one position, the integrated approach eliminates failures in communication between staff members. Integration also allows staff to quickly emphasize the importance of employment. Two prominent welfare scholars have suggested that integration may change the "eligibility-compliance culture" of the average welfare office to a "self-sufficiency culture" — that is, one that structures "interactions and expectations around work and preparation for work, with most of the attention of clients and workers devoted to moving off welfare rather than to validating the credentials for staying on it."⁽¹⁶⁾ A common criticism of integrated case management, however, is that the two functions may overwhelm staff members, and, because they must deal with welfare payments each month, this may lead them to pay less attention to employment and training.

III. Integrated and Traditional Programs in Columbus

MDRC researchers, Ohio and Franklin County welfare officials, and HHS officials developed the integrated and traditional programs in Columbus. As noted earlier, the integrated program relied on one type of staff member, integrated case managers, to perform both the income maintenance and employment and training tasks for welfare recipients. The traditional program, in contrast, employed two types: income maintenance (IM) workers and JOBS case managers.

The program developers planned that integrated case managers would carry relatively small caseloads, so they could work closely with all of their clients. In practice, as discussed in more detail in Chapter 2, integrated caseloads were somewhat larger than the designers had intended. In fact, the overall recipient-to-staff ratio in the integrated program was similar to that in the traditional program (every two integrated case managers worked with approximately the same number of welfare recipients as every two staff members in the traditional program). Because the evaluation in Columbus is comparing the effectiveness of integrated and traditional case management approaches with the same recipient-to-staff ratios, any differences that exist between the programs' outcomes can be attributed to the case management approach.

Beyond the case management difference, the major facets of the integrated and traditional programs were identical. They both required welfare recipients to participate in program activities or face a reduction in their cash grant. Both programs aimed to build sample members' skills before requiring them to look for work and engaged people in a wide array of services, including basic education, post-secondary education (primarily classes at two-year colleges), work experience, and job search activities. They provided child care assistance, transportation assistance, and other services to support participation in these activities, and both programs benefited from an unusually rich array of administrative supports. (Chapter 2 provides more detail on the implementation of the programs.) Furthermore, participants in the programs were subject to the same public assistance eligibility and payment system.

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IV. Evaluation of the Programs in Columbus

A. Research Questions and Hypotheses

This report answers several research questions about the integrated and traditional programs in Columbus:

• How did the integrated and traditional programs operate and what were the differences between them?
• How did the programs affect involvement in employment and training activities and how did they deal with people who did not comply with program requirements? Did one program engage more recipients in program activities than the other?
• What were the costs of employment-related services in the programs and how do those costs compare?
• What were the effects of the programs, relative to the experience of a control group, on employment, earnings, and welfare receipt and payments? How do the effects of the integrated and traditional programs compare?

As the questions above indicate, one of the main purposes of the evaluation in Columbus is to compare the integrated and traditional case management approaches. Following are the four key hypotheses about the differences between the programs that the evaluation designers developed at the beginning of the study.

1. The integrated case management structure would allow case managers to deliver program services more efficiently and effectively and to more closely monitor welfare recipients' situations than the traditional structure.

   The evaluation designers assumed that integrated case management would operate more efficiently than traditional case management because each recipient would work with only one staff member. This would reduce time spent on communication among staff, as well as reduce delays between case events. They also thought that integrated staff would have closer relationships with recipients. Because integrated case managers handle both eligibility and employment services, they would see recipients more often and have a more complete picture of their situation.

2. The integrated approach would engage more people in the program than the traditional approach.

   The evaluation designers hypothesized that the integrated program would lead to a higher attendance rate at JOBS orientation and subsequently to a higher participation rate in JOBS activities, and thus would better enforce the "social contract" idea that people who receive welfare should be engaged in employment-focused services. This hypothesis was based primarily on the belief that welfare recipients would take the threat of financial sanction more seriously from an integrated case manager who could impose the sanction herself than from a traditional case manager who had to rely on another staff member, an IM worker, to impose the sanction. In addition, the evaluation designers thought that recipients might have more difficulty avoiding participation requirements if they had to deal with one worker who knew their whole situation, rather than two workers who each had limited information about their JOBS and welfare statuses.

3. The integrated program would produce larger increases in employment and earnings than the traditional program.

   The architects of the study believed that if, as suggested above, the integrated program exposed more people to the program messages and services (by engaging more people in the program), and more efficiently and effectively delivered services, it also would produce larger effects on employment and earnings.

4. The integrated program would produce larger decreases in welfare receipt and payments than the traditional program.

   This hypothesis was based on two factors. First, if the integrated program increased employment and earnings more than the traditional program, as discussed above, that, in turn, would likely have resulted in larger welfare reductions. Second, evaluation designers expected that the integrated structure would engender more effective eligibility case management than the traditional structure. Integrated case managers might find out about employment and welfare status changes more quickly than traditional staff because they would see their clients more often. They would also be able to respond more quickly to status changes because they could reduce a grant amount or close a grant themselves rather than requesting another staff member to do so. It is also possible that the closer contact between integrated case managers and recipients could help these staff members learn about eligibility changes that traditional staff might not.

B. Research Design

The study in Columbus uses an unusually strong research design, a random assignment experiment, to estimate program effects. In this design, welfare applicants and recipients were assigned, at random, to one of three groups:

• the integrated group, whose members were required to participate in the integrated program or face a reduction in their cash grant (a financial sanction);
• the traditional group, whose members were required to participate in the traditional program or face a financial sanction; or
• the control group, whose members were neither required nor eligible to participate in any special welfare-to-work program. (Control group members could seek out employment-related services available in the community, and if they did, they could receive child care assistance from the welfare department.)

Because people were assigned to the three groups through a random process, any differences that emerge over time between the groups' outcomes, such as average earnings or welfare payments, can reliably be attributed to the programs.

The three-way design allows researchers to make two types of rigorous comparisons. First, estimates of the net effects of each program can be made by comparing outcomes of the integrated group with outcomes of the control group and by comparing outcomes of the traditional group with outcomes of the control group. (The integrated and traditional groups are also referred to as program groups in this report.) Second, estimates of the differential effects of the programs can be made by comparing outcomes of the integrated group with outcomes of the traditional group. All of these differences in outcomes are referred to as impacts.

In Columbus, 7,242 single-parent welfare applicants and recipients, who were determined to be JOBS-mandatory, were randomly assigned for the evaluation. During the period studied, Columbus mandated participation in the JOBS program from all recipients whose youngest child was at least 3 years old and who did not meet federal exemption criteria. These included working 30 hours or more per week, being ill or incapacitated or caring for an ill or incapacitated household member, being of advanced age, being in at least the second trimester of pregnancy, or living in a remote area that made program activities inaccessible.

The steps leading to random assignment are depicted in Figure 1.1. Between September 1992 and July 1994, IM workers identified new AFDC applicants and ongoing AFDC recipients (who were single parents aged 21 or over) who were JOBS-mandatory. Once an individual was approved to receive welfare, she was randomly assigned to either the integrated, traditional, or control group.⁽¹⁷⁾ People in the integrated group were assigned to an integrated case manager; people in the traditional group were assigned to an IM worker and a traditional JOBS case manager; and people in the control group were assigned to an IM worker (but not to a JOBS case manager). Then, the integrated and traditional JOBS case managers were responsible for sending a letter to each person scheduling her for an orientation session.⁽¹⁸⁾ (See Chapter 3 for more information on the programs' orientation process.)

The fact that random assignment occurred at the welfare office when individuals were referred to JOBS affects how the results in this report should be interpreted. In this design, sample members who did not show up for a JOBS orientation are included in the research sample, and their outcomes, such as earnings and AFDC payments, are averaged together with those of orientation attenders. Since orientation is the gateway to program services, people who did not attend an orientation session could not receive any services. In most of the other sites in the NEWWS Evaluation, random assignment occurred during a JOBS orientation, and thus orientation nonattenders were excluded from the sample. Whereas the evaluations in these other sites test only the effects of the program services and mandates, the evaluation in Columbus captures these program effects plus the effects of a referral to a mandatory welfare-to-work program and any follow-up relating to this referral, such as sanctioning for failing to attend an orientation session.⁽¹⁹⁾

Figure1.1
Steps Leading From Income Maintenance to Random Assignment

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V. Key Characteristics of the Program Environment and the Sample Members

A. Program Environment

Table 1.1 summarizes some key aspects of the Columbus environment. Between 1992 and 1997, the period covered in this report, Columbus was a growing metropolitan area with a population of close to 1 million. The labor market was robust: the unemployment rate was low and decreased throughout the follow-up period, and employment grew by 8 percent.

The number of people receiving cash assistance was relatively stable at the start of the study period and began to decrease after 1994.⁽²⁰⁾ Over the follow-up period the caseload decreased by 31 percent. In 1993, a family of three could receive up to $341 per month through the AFDC program, slightly less than the national median of $367, and up to $292 worth of Food Stamps.

Under the FSA, all states were required to disregard some earned income when calculating a family's AFDC grant. During the first four months of employment, $120 and an additional one-third of the remainder of monthly earnings were disregarded. During the next eight months of employment, a flat $120 was disregarded. After one year of work, the disregard fell to $90. In addition, recipients could disregard child care expenditures, up to $175 per child aged 2 and over and $200 per child under age 2.⁽²¹⁾ In July 1996, Ohio increased the amount of earned income that would be disregarded to $250 and 50 percent of the remainder of monthly earnings for 12 months. This increased disregard was expanded to 18 months with the implementation of the state's TANF plan in October 1997.⁽²²⁾

B. Sample Members

Table 1.2 shows some characteristics of the research sample in Columbus, measured immediately prior to random assignment.⁽²³⁾ Most people in the sample were women; their average age was 32; roughly half were white and half were black; and they had two children on average.

Typical sample members had limited experience in the labor market: Fewer than half reported that they had ever worked full time for six months for one employer, and fewer than one-third reported that they had worked for pay in the year before random assignment. Nearly three-fifths of the sample had received a high school diploma or GED certificate. Almost three-fourths of the sample had received AFDC for at least two years, and a substantial proportion were living in public, subsidized, emergency, or temporary housing. The Columbus sample is among the most disadvantaged of all the samples in the other NEWWS Evaluation sites.⁽²⁴⁾

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VI. About This Report

A. Data Sources, Samples, and Time Frame for the Analysis

This report draws data from several sources. The accompanying text box describes the data sources used for each analysis and presents the sample sizes that correspond to each source. To facilitate cross-program comparisons, the participation and cost analyses for Columbus cover a two-year period, as did the analogous analyses of other programs that were presented in earlier NEWWS reports. Analyses of the integrated and traditional programs' impacts on employment, earnings, and welfare receipt, however, cover three years of follow-up (because three years of employment and welfare data were available when the analysis was conducted).⁽²⁵⁾

As mentioned earlier, the follow-up period covered in this report preceded the implementation of the state's TANF program. It is worth noting, however, that when Ohio Works First began in October 1997, the "embargo" on control services was lifted. In other words, control group members who were receiving welfare or who reapplied for assistance could then be mandated to participate in the state's welfare-to-work program. In addition, at this time all sample members — in the control, integrated, and traditional groups — began receiving integrated case management. (Future reports whose follow-up period extends past October 1997 will address this issue.)

B. Organization of the Report

The report is divided into five chapters. After this introductory chapter, Chapter 2 describes the implementation of the integrated and traditional programs in Columbus, focusing on issues such as the employment-preparation strategy used and various case management practices. Chapter 3 presents findings on integrated and traditional group members' involvement in employment-related activities as part of their respective programs. The chapter also compares the activity levels of integrated and traditional group members with those of their control group counterparts to determine the net effect of the two programs on participation. Chapter 4 provides estimates of the cost of employment-related services in each program, and Chapter 5 presents the programs' effects on employment, earnings, and cash assistance receipt.

Endnotes

1.  This study draws its sample and data from Franklin County, Ohio. For ease of reference, the name of the county's largest city, Columbus, will be used throughout this report.

2.  Child Trends, as a subcontractor, is conducting analyses of outcomes for young children in three of the sites. Columbus is not included in this substudy.

3.  This report draws on an earlier paper prepared as part of the NEWWS Evaluation (Brock and Harknett, 1998b); a revised version of this paper was published in Social Service Review (Brock and Harknett, 1998a). An earlier NEWWS report (Hamilton and Brock, 1994) discusses the early implementation of the Columbus programs and the other programs in the evaluation, and a recent report (Freedman et al., 2000) presents two-year impacts for all the programs.

4.  This section is slightly modified from Brock and Harknett, 1998a.

5.  Bell, 1983; Bane and Ellwood, 1994.

6.  Bell, 1983; Bane and Ellwood, 1994.

7.  Hamilton, 1962, p. 128.

8.  Bane and Ellwood, 1994.

9.  Nightingale and Burbridge, 1987.

10.  Bell, 1983; Bane and Ellwood, 1994.

11.  Rein, 1982; Mead, 1986.

12.  See, for example, Gueron and Pauly, 1991; Rein, 1982.

13.  Nightingale and Burbridge, 1987.

14.  Hagen and Lurie, 1994.

15.  American Public Welfare Association, 1992.

16. Bane and Ellwood, 1994, p. 7.

17.  Thirty-five percent of the individuals were assigned to the integrated group, 35 percent to the traditional group, and 30 percent to the control group.

18.  This sequence of staff contact differs from what normally occurs in a program using integrated case management. To accommodate the random assignment process in Columbus, all applicants and recipients first met with a worker at the IM office; integrated group members did not see an integrated case manager until a later date when they attended a JOBS orientation. Normally, in a program using integrated case management, the integrated case manager is the first and only person to see a recipient, which allows the staff member to immediately address employment issues.

19.  To allow a separate study of the deterrence effects of a participation mandate and of reasons for not attending program orientation sessions, random assignment in the Grand Rapids and Riverside sites occurred at two points: at the point of referral to JOBS and at JOBS orientation. See Knab et al., 2001, for more details.

20.  Some of the annual caseload counts differ somewhat from those presented in Freedman et al., 2000, because a different data source was used.

21.  Greenberg, 1992.

22.  Gallagher et al., 1998.

23.  The table presents characteristics for the entire Columbus sample: the integrated, traditional, and control groups.

24.  See Freedman et al., 2000, for baseline characteristics for the samples in the other six NEWWS Evaluation sites.

25.  The follow-up period covers different dates for each sample member, depending on the date she or he was randomly assigned. As noted above, random assignment occurred between September 1992 and July 1994. Thus, the inclusive dates for the two-year follow-up period are September 1992 to July 1996, and the dates for the three-year follow-up period are September 1992 to July 1997.

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