MEAN NUMBEROF MONTHS UNTIL WtW ENROLLEES’ FIRST JOB AFTER PROGRAM ENTRY
Reference: Exhibit B.7, Fraker et al. 2004
EXHIBIT IV.2
EMPLOYMENT RATES AND EARNINGS BEFORE AND AFTER PROGRAM ENTRY: ALL WtW
ENROLLEES
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This chapter describes employment outcomes of WtW enrollees in the two years after they entered the program, focusing mostly on the second year after program entry.(34) This study did not attempt to estimate the net impacts of WtW-funded programs. Hence, the outcomes reported in this chapter and the next cannot be attributed to the programs and differences in outcomes across the study sites should not be regarded as indicative of differences in program efficacy.
The findings in this chapter are based on two data sources: (1) UI quarterly records and (2) follow-up surveys conducted 12 and 24 months after program entry. The UI data were used mainly to describe basic employment outcomes of WtW enrollees during the first year after program entry.(35) The survey data were used to present findings based on a richer and more recent set of employment-related outcomes.
Section A of this chapter shows that WtW enrollees who were not employed when they entered the program took an average of four to five months to be placed in a job. Although these placements initially increased the employment rate among enrollees, the gains were generally not sustained over time. In fact, Section B shows that most enrollees were not employed two years after entering the program. However, those who were employed usually worked a full or nearly full workweek, as presented in Section C. They earned about $8 per hour and rarely participated in an employer-provided health insurance plan.
The WtW legislation emphasizes the initial placement of enrollees into jobs and the subsequent attainment of lasting employment;(36) it is therefore important to assess both how quickly enrollees found jobs and the extent of their employment after they entered the program. This section describes the time it took enrollees to find their first job after entering WtW, and explores trends in employment rates during the four quarters following program entry.
In all sites, WtW enrollees were more likely to be employed in the quarter of program entry than in the quarter prior to program entry (Exhibit IV.2), reflecting mainly the fact that the study sites placed some enrollees into jobs shortly after program entry. Not surprisingly given its emphasis on quickly providing enrollees with subsidized employment, Philadelphia exhibited the greatest increase in employment among its enrollees around the time of program entry. In this site, the employment rate increased from 34 percent in the quarter before to 79 percent in the quarter of program entry.
WtW enrollees who were not employed when they entered the program required an average of four to five months to find their first post-enrollment jobs (Exhibit IV.1).(37) The time that it took enrollees to find jobs was determined by a host of factors, including the nature of the services they received. It tended to take enrollees less time to secure their first job in sites that provided services consistent with rapid job entry than in those that provided more extensive pre-employment services. Enrollees in Chicago, Phoenix, and Yakima — which used an employment model, designed to move participants into jobs quickly — obtained their first jobs in an average of 4.2 months. In the five sites emphasizing intensive pre-employment preparation, the average elapsed time until the first job tended to be longer, ranging from a low of 4.3 months in Philadelphia to a high of 5.1 months in West Virginia.(38) However, Ft. Worth represented an exception to this pattern. Despite being classified as a site that adopted the employment model, enrollees in this site took on average 5.2 months to find their first job. As described in Chapter III, enrollees in Ft. Worth were much less likely than other employment model sites to receive employment preparation services.
While placement into new jobs initially raised the employment rate among enrollees, the initial gains in employment were not sustained over time. In all but two of the study sites, the employment rate of WtW enrollees peaked in the quarter of program entry or the following quarter and declined thereafter (Exhibit IV.2). For example, in Phoenix the employment rate peaked at 60 percent the quarter after program entry and then steadily declined to 46 percent four quarters after program entry. However, in West Virginia and Yakima, the employment rate of enrollees increased for several quarters after program entry and then stabilized at the higher level. In West Virginia, it increased from 14 percent in the quarter of program entry to 41 percent four quarters after entry. In Yakima, the increase was less dramatic but still substantial, from 35 percent in the quarter of program entry to 44 percent four quarters later.
Relative to their pre-entry peaks, employment rates of enrollees four quarters after program entry were substantially higher for three sites — West Virginia, Chicago, and St. Lucie County — and were at about the same level for the remaining sites. For example, the employment rate of WtW enrollees in West Virginia four quarters after program entry was 39 percent, compared with a pre-entry peak of 22 percent; Chicago had a less dramatic but still substantial increase of about 9 percentage points. For the remaining sites, the employment rates of WtW enrollees four quarters after program entry were about the same as their pre-entry peak. For example, at 54 percent, the employment rate four quarters after program entry in Ft. Worth was the same as its pre-entry peak.
Although employment rates generally declined shortly after program entry, average earnings generally remained stable or increased gradually in the quarters following post-entry peaks in employment rates. In fact, there was no study site for which average earnings four quarters after program entry were lower than in the quarter of program entry. This pattern could be due to employment in the later quarters being associated with longer work hours and/or higher wages than employment in the earlier quarters.
While the analysis in the preceding section is useful to understand initial employment outcomes and trends in employment during the first year after program entry, this section extends the analysis by using a richer and more recent set of labor market outcomes. The analysis focuses on the employment outcomes of enrollees during the second year after they entered the WtW program. The main source of data is the survey administered to enrollees in the 11 study sites 24 months after program entry. To assess whether there were significant changes over time, we compare these with similar indicators from the 12-month follow-up survey.(39)
Most enrollees were employed at some point during the second year after program entry. In 9 of the 11 sites, over 60 percent of enrollees held at least one job at some point during the second year (Exhibit IV.3). Not surprisingly given the relatively strong employment history of their target population, the two JHU sites exhibited the highest proportion of enrollees (about 85 percent) who held at least one job during the second year. At the opposite extreme stood Phoenix, which at 51 percent had the lowest proportion of enrollees employed during the second year.
Nevertheless, the proportion of enrollees who were employed at some point during the second year was lower than the proportion employed at some point during the first year after program entry in all of the study sites except Ft. Worth. For five of the sites, the proportion of enrollees who had some employment was at least 10 percentage points lower in the second year than in the first. The two sites that emphasized rapid job entry (Phoenix and Yakima) and the site that offered temporary subsidized employment (Philadelphia) exhibited especially large drops in the proportion of enrollees employed during the second year from that of the first year, with enrollees in Phoenix experiencing the greatest reduction of 16 percentage points. This may have occurred in part because individuals placed according to a rapid-entry strategy may not be matched to the best jobs, and those placed in temporary subsidized employment may not be able to find a job after the subsidized employment period ends.
While most enrollees were employed at some point during the second year following program entry, consistent employment throughout the year was not the norm. In six of the study sites, enrollees were employed only about 40 percent of the time, on average, during the second year after program entry (Appendix Exhibit B.2). Enrollees at the JHU sites exhibited the highest proportion of the year employed (71 percent for Baltimore County and 63 percent for St. Lucie County), while enrollees in Philadelphia and Phoenix had the lowest average proportion of time with a job (32 and 35 percent respectively).
It was not unusual for WtW enrollees who were employed at some point in the second year to leave their jobs. Exhibit IV.4 shows that in most study sites, over 40 percent of enrollees who were employed during the second year after program entry left the first job they held that year. The rate of exit from the initial job was highest in Milwaukee (61 percent). It was lowest in Baltimore County (27 percent), where the JHU program provided services designed to reduce job loss, and in Boston (42 percent), where employer-sponsored programs fostered strong employee-employer bonds. In St. Lucie County, the other JHU program site, the rate was also relatively low (45 percent), but not as low as in Baltimore County.
Nevertheless, job stability seems to have improved over time. Enrollees tended to have more stable jobs in the second year after program entry than the first, as indicated by the exit rates from the first job they held in the year. The rate of exit from initial job was lower in the second year than in the first for 8 of the 11 study sites (Exhibit IV.4). In fact, for 7 of the 11 sites the difference in exit rates was 10 percentage points or higher. Not surprisingly, Philadelphia — which offered enrollees temporary subsidized employment as an initial job after program entry — exhibited one of the largest declines in exit rates, from 74 percent in the second year to 57 percent in the first year.
When enrollees left their jobs, it was usually because they had voluntarily quit or because their work period had ended (Exhibit IV.5).(40) In six study sites, a voluntary quit was the main reason for departure. Baltimore County had the highest percent of enrollees (59 percent) reporting this reason for departure. In the other five study sites, the ending of the work period was the main reason for departure, accounting for 40 percent or more of the enrollees. Dismissal by the employer for cause (firing) accounted for 12 to 17 percent of departures from the initial job.
In general, most enrollees were not employed two years after program entry. In five sites, the employment rate among enrollees was around 40 percent (Exhibit IV.6), very similar to the 42 percent employment rate for former TANF recipients nationwide reported by Loprest (2003).(41) In Milwaukee and Phoenix, the rate was even lower at 33 percent. Nevertheless, over two-thirds of enrollees in the two JHU sites were employed two years after entry, and about half of enrollees in West Virginia and Yakima were employed at that time.
Enrollees were much less likely to be employed at the end of the second year than at some point during that year. For example, in West Virginia and Yakima about half of the enrollees were employed at the end of the second year, but over two-thirds were employed at some point during the year. This finding and the relatively high job exit rates reported in the preceding section suggest that enrollees’ employment after entering the program was generally not very stable.
Employment rates among enrollees two years after program entry were remarkably similar to those one year after program entry for most sites, with both typically much higher than employment rates at program entry (Exhibit IV.6). For 9 of the 11 study sites, the employment rate two years after entry was essentially the same as it had been a year after entry. Milwaukee exhibited a particularly large decline (8 percentage points) in the employment rate among its enrollees, perhaps reflecting the fact that the clients the program served — mostly noncustodial fathers with a criminal offense in their record — had difficulty staying employed for very long.
Employment rates two years after program entry were slightly higher in sites that had implemented programs consistent with a pre-employment model as opposed to an employment model.(42) From Exhibit IV.6, we can determine that the sites following a pre-employment model (Boston, Nashville, Philadelphia, and West Virginia) had an average employment rate for enrollees two years after program entry of 43 percent, compared with 40 percent for the sites that were following an employment model (Chicago, Ft. Worth, Phoenix, and Yakima). However, due to differences in the populations served by the sites that followed these two models, this difference in employment outcomes is not necessarily indicative of greater efficacy of the pre-employment model. In particular, the employment rate of enrollees at the time of program entry was about 5 percentage points higher, on average, in the sites that were following a pre-employment model.
Among the WtW enrollees who were not employed two years after program entry, the most commonly cited reasons for lack of employment were (1) difficulty finding a job and (2) a health problem or disability (Appendix Exhibit B.4). In six of the sites, difficulty finding a job was the most common main barrier for employment. This was true for about one-third of the Milwaukee enrollees who were not employed and between one-sixth and one-third of their counterparts in the other study sites. A number of factors may have been underlying this reported difficulty, such as a weak local labor market, a bad match of the enrollees’ skills with the requirements of available jobs, and personal characteristics that present a challenge to employment. Given the additional liabilities that ex-offenders bring to the labor market, it is reasonable that WtW enrollees in Milwaukee were most likely to attribute their lack of employment to difficulty in finding a job.
An enrollee’s poor health or work-limiting disability was the most commonly cited reason for lack of employment in five of the study sites. About one in four enrollees in four sites — Nashville, Philadelphia, West Virginia, and Yakima — gave this explanation for their lack of a job one year after enrollment, as did about one in five enrollees in Phoenix. These high rates may have been due to higher incidences of poor health or disabilities in these sites and/or to a mix of available jobs that required higher levels of physical functioning.(43) For example, relatively large proportions of enrollees age 40 or older in Yakima (21 percent) and West Virginia (17 percent) may have made those groups more susceptible to health problems and disabilities.
A small number of other factors were important barriers to employment in some sites. In general, they represented a barrier for about 10 to 15 percent of enrollees without a job in these selected sites.
Welfare policymakers are concerned not only that able-bodied TANF recipients and other at-risk adults become employed, but also that they progress to jobs that allow them to achieve substantial self-sufficiency. This section describes key features (industry and occupation, compensation, and hours worked) of the principal job held by those WtW enrollees who were employed two years after program entry. To assess progress, this section presents some comparisons between the jobs held at the end of the second year and those held at the end of the first year.
WtW enrollees were most frequently employed in office and administrative support, sales, and personal care and services occupations. These were the three most common occupations in five of the study sites, and they were among the five most common occupations in nine sites (Appendix Exhibit B.5).
About half or more of the principal jobs held by employed enrollees in nine of the study sites were in service industries, primarily business, health, and social services (Appendix Exhibit B.6). The industries in which WtW enrollees worked likely reflect both the industrial base of the local economies and the job placement strategies of the WtW programs. For example, in Boston — a major market for the provision of health care, and a site in which the WtW program partnered with several local health care providers — the principal job held by 26 percent of employed enrollees was in the health services industry.
The elements of employment compensation considered in this evaluation are the hourly wage rate and fringe benefits, with a focus on health insurance, paid sick leave, and pensions.(45) As in the previous subsection, the findings reported here are based on the principal job held by WtW enrollees who were employed two years after program entry.
WtW enrollees in seven of the study sites had a mean nominal wage rate on their primary job of about $8 per hour (Exhibit IV.7). West Virginia, Baltimore County, Boston, and Milwaukee were the exceptions to this pattern. Although enrollees in West Virginia had more favorable employment outcomes than those in many of the other study sites, their mean hourly wage rate ($6.40) was notably low. In contrast, the mean wage rates for WtW enrollees in Baltimore County ($9.89), Boston ($10.02), and Milwaukee ($9.91) were well above those for enrollees in the other sites. In all sites except West Virginia, over 90 percent of enrollees earned wages greater than the minimum wage of $5.15. West Virginia had the greatest proportion of enrollees earning wages below the minimum wage (12 percent) and below $8.00 per hour (87 percent).
The mean hourly wage rate on the principal job held two years after program entry was essentially unchanged from the year before in about half of the study sites, but was higher in the others (Exhibit IV.8). Where there was an increase, it was not dramatic, except in Milwaukee where it exceeded $2 per hour. In the other sites where there was an increase, it was in the $0.40-$0.80 range, which generally represents about 5 to 10 percent of the first-year wage. In Milwaukee, the mean hourly wage was $2.17 higher at the end of the second year than at the end of the first year, but this site exhibited a large decline in employment between the two years (about 8 percentage points, the highest among all sites). The observed increase in the mean hourly wage was partly the result of enrollees with low first-year wages losing their jobs by the end of the second year. In fact, of the enrollees who had been employed at the end of the first year, those who were still employed at the end of the second year had first-year average wages over $1 higher than those who were no longer employed.
Overall, fringe benefits were available to only modest proportions of WtW enrollees on their principal job two years after entering the program (Exhibit IV.9).(46) Consequently, the self-sufficiency of most enrollees, to the extent that they achieved it, was precarious — contingent on remaining healthy and continuing to work.
Paid sick leave either was or tied for the most common of the three key fringe benefits in most study sites, followed by a pension plan. Health insurance was the least common. Rates of availability of these three benefits ranged across the study sites as follows:(47)
In general, there was little change over time in the availability of fringe benefits other than health insurance (Exhibit IV.10 and IV.11). Across the study sites, health insurance coverage on the principal job held two years after program entry was about the same or somewhat higher as on the principal job held at the end of the first year. Three sites — Chicago, Nashville and Philadelphia — exhibited increases 5 percentage points or more in the prevalence of health insurance among employed enrollees.
WtW enrollees who were employed two years after program entry typically put in a full or nearly full workweek on their primary job. Exhibit IV.12 shows that the mean hours of work per week on the principal job ranged from 32 to 38 across the 11 study sites. With the exception of Nashville, in no site did more than 10 percent of employed enrollees work fewer than 20 hours per week on their principal job (Appendix Exhibit B.8). While employed enrollees worked nearly full-time hours on average in a week, they were not necessarily employed consistently week after week over the course of a month, which may have reduced their monthly earnings.
Since local programs funded by WtW grants were expected to be integrated with the corresponding state TANF programs, it is appropriate to assess the hours WtW enrollees worked in terms of the TANF work requirement, as specified in the 1996 PRWORA legislation. This requirement can be paraphrased as, “The nonexempt adult head of a single-parent TANF case must spend at least 30 hours per week working on a job for pay or participating in work-related activities. Participation in education and training programs may account for no more than 10 of the required hours.”(48)
In Exhibit IV.13, the TANF work requirement is used as a standard against which to assess employment outcomes for WtW enrollees two years after program entry, without regard for their actual TANF participation status at that time. The exhibit displays the percentage of enrollees who would have satisfied the TANF work requirement based on 30 or more hours of paid employment alone, based on hours worked in all jobs held at the end of the second year, not just the principal job.
The rates at which WtW enrollees would have satisfied the TANF 30-hour weekly work requirement if they had been on TANF two years after program entry were lower than their rates of employment, but the patterns of these two measures were similar across the study sites. Exhibit IV.13 shows that 50 to 60 percent of enrollees in the JHU sites were employed at levels consistent with the TANF requirement, whereas only about one-third of enrollees in the other sites were (with the exception of West Virginia, where 40 percent of enrollees were working at least 30 hours per week).(49)
The main reason for not satisfying the TANF 30-hour-per-week work standard was the absence of any employment, not insufficient hours of work (Exhibit IV.14). For example, in Chicago 61 percent of enrollees did not meet the 30-hour standard because they were not employed. Only 4 percent were working between 1 and 20 hours, and 7 percent were working between 20 and 30 hours. Even assuming that the latter group had no other work-related activities that would have allowed them to meet the TANF 30-hour requirement, the number of enrollees who did not meet the standard because they were not working was more than 5 times the number of those who did not meet it because they did not work enough hours. This ratio was similar or greater for all other sites except the two JHU sites, where it was between 2 and 3.
Reference: Exhibit B.7, Fraker et al. 2004
EXHIBIT IV.2
EMPLOYMENT RATES AND EARNINGS BEFORE AND AFTER PROGRAM ENTRY: ALL WtW
ENROLLEES
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(34) A more detailed analysis of enrollees’ outcomes in the first year after program entry can be found in Fraker et al. 2004.
(35) Given the timing of data collection, UI data were available up until four quarters after program entry for all sites except Boston and Nashville (where UI data were not available at all). There were some sites for which we were able to collect UI data for a slightly longer period (five to six quarters after program entry), but since the outcomes in those additional quarters were fairly stable, we decided for purposes of comparability to report UI-based results up until four quarters after program entry for all available sites.
(36) A key objective cited in the legislation was “to facilitate the placement of hard-to-employ welfare recipients and certain noncustodial parents into transitional employment opportunities which will lead to lasting unsubsidized employment and self-sufficiency” (Federal Register, January 11, 2001, p. 2712).
(37) The Milwaukee site was an exception to this pattern. There, the NOW program served an especially hard-to-employ population of noncustodial parents who had been incarcerated or were on probation or parole when they enrolled in WtW. The Milwaukee enrollees who were not employed at program entry required nearly six months, on average, to obtain their first jobs.
(38) Especially in the pre-employment model sites, the measured duration until the first job may have been distorted by the difficulty that some enrollees had in distinguishing between subsidized employment (a common service in these sites) and unsubsidized employment.
(39) Employment rates based on survey data can differ from employment rates based on UI data for a number of reasons. In this particular study, employment rates based on data from the 12-month follow-up survey tend to be lower than the employer-reported UI figures for the fourth quarter after program entry. This may be due in part to the fact that the follow-up survey provides a single-point-in-time measure whereas the UI data measure employment at any time during the fourth quarter after program entry (the latter will tend to overstate employment at any specific point in time). The most salient exception to this pattern was West Virginia, a rural site in which enrollees held jobs not likely to be registered by the UI system. In this site, 51 percent of enrollees reported employment 12 months after program entry; but according to UI records, only 39 percent of enrollees were employed in the fourth quarter after program entry.
(40) The ending of a work period encompasses three similar reasons for departure from a job: (1) a layoff, (2) the ending of a temporary job, and (3) the ending of a period of self-employment.
(41) Loprest (2003) reports a 42 percent employment rate among adults who had left TANF during the two years prior to the 2002 Survey of America’s Families. Some of these individuals had returned to TANF by the time of the survey interview.
(42) This discussion of differences in employment outcomes by program model focuses on the study sites that followed either the employment or pre-employment program models. These sites served individuals who were broadly typical of WtW enrollees nationwide; most were TANF recipients who were not employed when they enrolled in WtW. Even among these sites, differences in enrollee characteristics at program entry because of variation in local settings rule out interpretation of outcomes as indications of differences in program efficacy. Including post-employment and rehabilitative program models would be even more problematic, so we have chosen not to. The populations served by the study sites that followed these two program models (already employed persons and noncustodial fathers on probation or parole) were distinctly different from the majority of WtW enrollees, not only because of variation in local settings but also by design.
(43) WtW enrollees in Yakima, West Virginia, and Nashville had the highest rates of work-limiting health problems at the time of enrollment (Exhibit II.2, Fraker et al. 2004).
(44) Enrollees in Milwaukee were also more likely than their counterparts in other sites to have recently been laid off or fired, which suggests that their labor market difficulties went beyond finding employment.
(45) This evaluation also examined the availability of dental insurance, paid holidays, and paid vacation leave. Appendix Exhibit B.8 presents findings for the six types of fringe benefits examined.
(46) Even paid vacation leave, which was common relative to other fringe benefits, was unavailable for one-third or more enrollees in all study sites.
(47) The definition of availability of a benefit varies depending on the type of benefit. Availability of health insurance refers to active participation in an employer’s health insurance plan. Availability of paid sick leave and a pension refers to the potential for enrollees to participate in and benefit from these plans two years after enrolling in WtW (i.e., at the time of the interviews), whether or not they did so.
(48) PL 104-193, section 407, subsections (c) and (d). The 30-hour-per-week work requirement became effective in fiscal year 2000.
(49) The rate of satisfying the TANF 30-hour work requirement two years after program entry was very similar to the rate one year after program entry for all sites except Milwaukee and St. Lucie County, where the second-year rate dropped by 7 to 10 percentage points.
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