Private Employers and TANF Recipients:

Chapter 6:
Conclusions and Priorities

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Contents

• 6.1 Conclusions
• 6.2 Priorities

This chapter summarizes the findings of the study and offers recommendations for research that would build on this project.

6.1 Conclusions

Based on the available research, we are able to describe many important aspects of the demand for TANF recipients in the labor market, including some that are particularly significant to ASPE:

• Employer interest in TANF recipients. Employer demand for labor from TANF recipients has been high in recent years. However, the research indicates that this demand has been concentrated in companies with three characteristics: The companies tend to be large, in the service sector, and located in cities. In addition, much of this demand is for employees willing to work irregular hours, at low pay, and on a temporary or short-term contractual basis.
• Employer reasons for hiring TANF recipients. Research studies have consistently shown that the hiring of welfare recipients is a business decision. Employer demand for welfare recipients and other low-skill workers is strongly influenced by economic conditions. Also, because minimizing the frequency and cost of job turnover is a key business objective, employers subject recipients and other job applicants to multiple forms of screening before hiring them.
• Employer reasons for not hiring TANF recipients. Employers are often skeptical that welfare recipients possess the necessary attitudes toward work and soft skills. They also are concerned that barriers, such as lack of transportation and child care, limit recipients' productivity in the workplace.
• Challenges presented by TANF recipients. The same barriers that lead employers not to hire TANF recipients — poor job skills, lack of soft skills, limited work experience, poor academic preparation, transportation and child care problems, and relative prevalence of mental illness, domestic violence, and drug and alcohol abuse — can cause problems on the job. While their job performance is generally good, TANF recipients are prone to absenteeism and interpersonal difficulties.

The existing research literature does not permit meaningful assessment of the practices used by employers that hire TANF recipients. Knowledge of what employers do to hire and employ TANF recipients is limited to a few areas, notably recruitment and applicant screening. The research evidence suggests that, while employers who hire current and former welfare recipients use various recruitment methods, most rely more on word of mouth and advertising than on referrals from employment agencies. However, the research provides little basis for determining whether these or other methods are effective, whether partnering with labor market intermediaries produces different outcomes, or what could be done to improve recruitment practices.

Once individuals have been recruited, employers focus on screening potential candidates. Again, however, it is difficult to evaluate specific screening methods or tools, or whether employers screen applicants more effectively on their own or with the help of intermediaries. Based on the very limited information available on the supports and services provided by employers, it appears that many employers find it difficult to provide the range of services often needed by TANF recipients. Few employers devote substantial resources to training low-skill workers, and most of the training is concentrated in a few skill areas and provided by large companies.

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6.2 Priorities

The findings of the literature review and the advice of the project's expert panel both suggest that rigorous impact research is needed to evaluate the effectiveness of different approaches used by employers and intermediaries. Such research should be carefully designed and implemented to identify the relative effectiveness of several important practices, especially the use of labor market intermediaries.

However, it would be difficult to implement such experiments in the near future, largely because not enough is currently known about the characteristics and prevalence of specific employer practices, the extent to which hiring and employment functions are performed by labor market intermediaries, and which employer or intermediary practices are likely to be most critical to the key employment outcomes for TANF recipients. For these reasons, we recommend that additional research be undertaken in the short run and that, once more is learned about employer and intermediary practices, the feasibility of experiments be assessed.

The optimal way to obtain much of the needed information is to conduct a national survey of employers and the labor market intermediaries with whom they partner. Such a survey would provide comprehensive knowledge of recruitment, hiring, and employment practices for different types of employers and intermediaries. It also would provide a basis for identifying critical points in the hiring and employment process. More generally, such a survey would inform decision making by policymakers, government agencies, employers, and other institutions for years to come.

Other types of research are also attractive. One is additional analysis of data from the telephone survey of employers directed by Harry Holzer in the late 1990s. It would be particularly helpful to analyze the survey's data on labor market intermediaries. Another appealing research option is to analyze data from the Abt Associates survey of intermediaries that was conducted in the same period. Finally, natural experiments might be conducted in localities where TANF work-activity assignments are random or nearly random. Before undertaking such studies, however, research would need to identify potential sites, assess differences between the service providers to which TANF recipients are assigned, and determine the extent to which assignment is truly random. All three of these research options would be relatively inexpensive and potentially very valuable. In addition, they would inform consideration and design of future random assignment experiments, and could be designed with this in mind.

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