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Congress established the Welfare-to-Work (WtW) grants program as part of the Balanced Budget Act (BBA) of 1997. Its purpose was to provide additional resources to supplement the welfare reform funds included in the Temporary Assistance for Needy Families (TANF) block grants to states, which were authorized under the Personal Responsibility and Work Opportunity Reconciliation Act (PRWORA) of 1996. WtW funds were intended to support programs, especially in high-poverty communities, to assist the least employable, most disadvantaged welfare recipients make the transition from welfare to work. These funds were also available to help noncustodial parents with employment difficulties increase their earnings and better support their children. Congress appropriated these funds because of a concern that in high-poverty communities it would be relatively more difficult than in other communities to achieve the employment objectives of welfare reform, and that the same communities might eventually bear additional financial burdens when individuals reach their lifetime limits on welfare. The federal WtW funds were distributed by the U.S. Department of Labor (DOL) to state and local grantees in 1998 and 1999. Initially, grantees were expected to spend the funds within three years of their receipt, but amendments in 1999 extended the period to five years.
Congress mandated that the WtW grants program be evaluated. Under contract from the U.S. Department of Health and Human Services (DHHS), Mathematica Policy Research, Inc., along with its subcontractors the Urban Institute and Support Services International, is conducting the national evaluation to document implementation of WtW programs and employment and welfare outcomes for program participants. This is one of several reports based on the results of the national evaluation , and presents the findings from the process and implementation analysis.
The remainder of this chapter provides an overview of the WtW grants program and the welfare reform context within which it has been implemented, the evaluation study design, and the objectives of this report. Subsequent chapters describe the programs implemented in eleven study sites in terms of institutional arrangements, participant enrollment, WtW services, and program models.
The two-fold objective of the WtW grants program was to serve the hardest-to-employ and help them obtain employment that could ultimately result in long-term economic independence. Federal regulations specified that the objectives of the WtW grants program were to:
Congress recognized that certain populations and certain high-poverty areas might require higher investments of resources over a longer period of time than the regular welfare caseload. Long-term services to achieve economic self-sufficiency were encouraged--beginning a job, either subsidized or unsubsidized, was assumed to be just the first step. WtW funds were also to target individuals in need of intensive services: long-term welfare recipients, high school dropouts, substance abusers, and persons approaching their TANF time limits. In addition, WtW programs could serve noncustodial parents with severe employment problems, regardless of their legal child support status.
To address the employment and service needs of such a diverse target population, WtW grants could fund a broad range of employment services. The types of program activities WtW funds were intended to support included: (1) job creation through short-term public or private sector wage subsidies; (2) on-the-job training; (3) job readiness programs; (4) job placement services; (5) pre-employment vocational educational or job training; (6) post-employment education or training; (7) vouchers for job readiness, job placement or post-placement services; (8) community service or work experience; (9) job retention services; and (10) supportive services such as transportation or child care services, substance abuse treatment, and housing assistance (if such services were not otherwise available to the individual participants receiving WtW services). The emphasis of WtW, though, was on employment rather than training or education.
Congress authorized $3 billion for the WtW grants program--$1.5 billion in FY 1998 and $1.5 billion in FY 1999--to help move welfare recipients into jobs, and included specific provisions about how the WtW funds were to be distributed. About 5 percent of the funds were set aside at the national level for Indian and Native American programs, for evaluation activities, and for federal-level program administration. The rest was distributed through competitive and formula-based grants. One-quarter of the grant funds was distributed competitively based on applications submitted to DOL (these are referred to as competitive grants). The other three-quarters of the federal WtW grant funds were allocated to states according to a formula based on each state's share of the poverty population and number of adults on welfare.
A total of $2.5 billion dollars in WtW grant funds was distributed by DOL in fiscal years 1998 and 1999: $2 billion was allocated by formula to states (formula grants), $472 million was allocated competitively to grantees that submitted applications (competitive grants), and $12.8 million was distributed to 93 tribal program grantees. The rest of the funds appropriated by Congress were devoted to national activities including evaluation and reporting. Governors designated which state agency received and administered the formula funds. The state WtW agency (usually the state workforce development or employment/training department) then distributed 85 percent of the grant to local Job Training and Partnership Act (JTPA) service delivery areas (SDAs)/Private Industry Councils (PICs) (or to the newly established Workforce Investment Boards established under the new Workforce Investment Act, which replaced JTPA), according to the same formula used for allocation of funds to the states. Locally, competitive grantees and SDAs (primarily as formula subgrantees) were responsible for program design, administration, and service delivery.
While TANF is administered at the national level by the U.S. Department of Health and Human Services (HHS), the WtW program is administered by the U.S. Department of Labor (DOL)--but still had to be implemented within the broader context of welfare reform. To receive WtW formula funds, a state had to submit an amendment to its TANF plan to HHS and DOL, explaining generally how the new funds would be used. The grant-funded programs were expected to complement TANF services and programs as they existed in their local communities. Achieving the primary objectives of the WtW grants programs--targetting targeting welfare recipients with the most serious difficulties and providing them with services intended to help them succeed in the job market--required that programs understand the welfare policies and programs in effect in their communities and establish reasonable arrangements for interacting with those programs.
The WtW grants and programs were to complement and supplement--but not duplicate--state TANF funds and work programs. The federal TANF legislation enacted in 1996 solidified a trend among states to replace the former welfare system under the Aid to Families with Dependent Children (AFDC) program, which was based primarily on income transfers and benefit entitlements, with a work-based system of temporary public assistance. Welfare reform has in fact changed the nation's social assistance system in terms of the focus on employment and in several other ways, which influenced how WtW grant-funded programs were implemented.
First, states have substantial flexibility in implementing TANF, meaning policies and programs vary considerably across states. States determine how to use their TANF block grant to fund cash assistance, work-related services, and other supports for low-income families with children. States also decide what types of work requirements are imposed on recipients and which individuals are subject to work requirements within federal parameters. In contrast, the WtW legislation includes very specific provisions about who is eligible, and funds are specifically earmarked for employment services and cannot be used for cash assistance payments. TANF recipients are the primary target group for WtW-funded services and they are subject to state-determined policies, which means WtW programs and participants must understand those policies.
Despite the flexibility states have, however, federal law specifies that federally funded welfare payments can only be provided for a temporary period. More specifically, welfare is intended to be a short-term step toward employment. Unlike the former AFDC program, TANF provides short-term assistance only; individuals can receive federally funded cash assistance for just 60 months in their lifetime, and states can apply shorter time limits as well. Nearly all recipients of federally funded TANF cash assistance are, therefore, subject to a time limit. Some states, though, have decided to use state funds, rather than federal funds, to pay for some cash benefits, which in effect extends the five-year time limit. A major intent of time-limited welfare is to make clear to recipients and to welfare agencies that individuals are expected to work and earn an income to support their families--welfare is to be just a temporary source of help. Congress underscored the emphasis on work by requiring states to meet steadily increasing requirements for the percentage of their TANF cases that must be engaged in unsubsidized employment or work-related activities. States were to have 45 percent of their caseload in work activities in fiscal year 2001 and 50 percent in 2002. Most state TANF policies, therefore, stress job search activities and encourage or require recipients to find employment rapidly, rather than provide education or training.
The legislative and program changes in welfare contributed to a dramatic decline in welfare caseloads. The welfare rolls, which began to shrink in the mid-1990s, continued to decline after the passage of PRWORA and the BBA. The number of cases receiving AFDC (and then TANF) cash assistance decreased from 5.05 million in January 1994 to 2.10 million in September 2001.(1) According to much research, the caseload reduction is due to a combination of the continuing strong national economy and the new welfare reform policies that have emphasized employment.(2)
The general characteristics of all persons on welfare have not changed much. However, as large numbers of recipients leave welfare for work, a greater share of those remaining on TANF and subject to work requirements tend to have employment and personal problems than was true before welfare reform, when those with serious problems were exempt from work programs.
To better serve welfare recipients with the most serious barriers to employment, WtW provides additional resources to help the most disadvantaged. Congress enacted the WtW grants program to complement state welfare reform policies by concentrating additional resources on parents who were particularly disadvantaged and likely to have the greatest difficulty finding and holding a job. The BBA gave authority to DOL to administer the WtW grants program, and local Workforce Investment Boards (WIBs) have primary operational responsibility. In effect, at the local level, the job of moving welfare recipients into employment is very much shared by human services agencies responsible for TANF and its work programs, and the workforce development system with its responsibility for WtW grant programs.
Congress established eligibility criteria and spending rules for WtW grants to ensure that the funds were used primarily for individuals who had specific disadvantages in the labor market. As originally enacted, the BBA required that WtW grantees spend at least 70 percent of their grant funds on (1) long-term TANF recipients or recipients within a year of reaching a TANF time limit, who also had two of three specific problems affecting employment prospects; or (2) noncustodial parents of children in a long-term TANF case, who themselves faced two of the three specified problems. The three problems specified in the original language of the BBA were (1) lack of a high school diploma or GED and low reading or math skills, (2) a substance abuse problem, and (3) a poor work history. The remaining funds, no more than 30 percent of the grant, could be spent on people who met less stringent criteria: TANF recipients (or noncustodial parents of TANF children) who had characteristics associated with long-term welfare dependence, such as being a school dropout or a teen parent, or having a poor work history.
As WtW grant programs were being implemented beginning in 1998, it became clear that the combination of the strict eligibility criteria and the "70-30" spending requirement were contributing to slow enrollment. In response, Congress modified the WtW legislation in 1999 as part of the fiscal year 2000 appropriations legislation for the Departments of Labor, Health and Human Services, Education, and related agencies. While the amendments left in place the requirement that 70 percent of WtW funds be spent on a defined category of participants, they broadened the population in two ways to make it easier for TANF recipients and noncustodial parents to qualify for WtW services under the 70 percent category:
The definition of the 30 percent category was also broadened to include youth who have received foster care, custodial parents (regardless of TANF status) with income below the poverty level, and TANF recipients who faced other barriers to self-sufficiency specified by the local WIB.
The design of the evaluation includes four main components:(3)
Focus groups with individual participants were also conducted in all 11 study sites and insights from those sessions contribute to all four components of the core evaluation. Forthcoming reports will present comprehensive findings from the cost analysis and the outcomes analysis, both of which utilize some information from the process and implementation analysis, which is the subject of this report.
In addition to the four-part core evaluation, a special process and implementation study focuses on tribal programs. It documents welfare and employment systems operated by American Indian and Alaska Native WtW grantees, the supportive services they provide, and how these tribal grantees integrate funds from various sources to move members from welfare to work.(6)
The general purpose of the process and implementation analysis is to describe the components, services, structure, management, and operations of the programs funded with WtW grants in selected study sites. A complementary objective is to identify lessons from these programs about how to implement programs and about strategies targeting hard-to-employ populations. This report is based on (1) information collected through two rounds of site visits and (2) data on participants and services from local programs' administrative management information systems.(7) The first round of site visits occurred in late 1999 and early 2000 and focused on implementation issues, program structure, client flow, and program services. The second round of site visits in 2001 updated the status of the programs and their experiences.
Site visits provided the primary source of information to address the broad range of topics in the process and implementation analysis. Over 900 semi-structured interviews were conducted with administrators and staff of grantee agencies and service providers in the eleven study sites.(8) A general conceptual framework that included four domains was used to collect and analyze information from the sites:
Data on program enrollment levels, characteristics, activities, and job placement were obtained from administrative management information systems (MIS) from study sites. A research file was created that compiled data on all individuals enrolled into programs from the start of each program through April 2001 and documented each individual's employment-related activities and entry into unsubsidized employment. Characteristics of participants in each site were obtained from baseline information forms completed by program staff on samples of enrollees for the evaluation.
The following chapters provide an overview and analysis of the study sites and the programs that were operating in those sites as of mid-2001. Chapters II through IV focus on the key features of these WtW grant-funded programs: institutional structure; participant enrollment; and employment-related services and post-employment support. Chapter V describes the general program models operating in the sites, based on a synthesis of the program services information. Chapter VI presents conclusions and policy implications. Summary information and brief profiles of each of the study sites appear in the Appendix.
1. U.S. Department of Health and Human Services, Change in TANF Caseloads (last update July 27, 2001) and Temporary Assistance for Needy Families, Total Number of Families Fiscal Year 2001 (last update February 27, 2002) Administration on Children and Families Web site, http://www.acf.dhhs.gov/news/stats/familiesL.htm, accessed April 1, 2002.
2. For example, Geoffrey Wallace and Rebecca M. Blank, "What Goes Up Must Come Down? Explaining Recent Changes in Public Assistance Caseloads," in Economic Conditions and Welfare Reform, edited by Sheldon H. Danziger (Kalamazoo, MI: Upjohn Institute), 1999.
3. Originally the evaluation was to analyze individual net impacts and to analyze costs and benefits based on net impacts. As discussed in subsequent chapters, enrollment proceeded more slowly and enrollment levels were lower than expected in the programs. Demand for the program was not adequate to allow random assignment of participants to treatment and control groups. The revised design and data collection instruments for all components of the evaluation were submitted to the Office of Management and Budget and received formal clearance.
4. For results from nationwide surveys of grantees see (1) Irma Perez-Johnson and Alan Hershey, Early Implementation of the Welfare-to-Work Grants Program: Report to Congress. Princeton, N.J.NJ: Mathematica Policy Research, Inc., March 1999; and (2) Irma Perez-Johnson, Alan Hershey, and Jeanne Bellotti, Further Progress, Persistent Constraints: Findings From a Second Survey of the Welfare-to-Work Grants Program. Princeton, N.J.NJ: Mathematica Policy Research Inc., April 2000.
5. For results of the exploratory site visits, see Demetra Smith Nightingale, Terri Thompson, Nancy Pindus, Pamela Holcomb, Edgar Lee, Jesse Valente, and John Trutko, Early Implementation of the Welfare-to-Work Grants Programs: Findings from Exploratory Site Visits and Review of Program Plans. Washington, DC: The Urban Institute, February 2000.
6. Tribal reports released to date are: (1) Walter Hillabrandt and Mack Rhoades, Jr. The Evaluation of the Tribal Welfare-to WorkWelfare-to-Work Program: Initial Lessons from Tribal Experience. Princeton, NJ: Mathematica Policy Research, Inc. 2000; and (2) Walter Hillabrandt, Mack Rhoades, Jr., Nancy Pindus, and John Trutko, The Evaluation of the Tribal Welfare-to WorkWelfare-to-Work Program: Initial Implementation Findings. Princeton, NJ: Mathematica Policy Research, Inc. 2001.
7. For results from the first round of visits, see Demetra Smith Nightingale, Program Structure and Service Delivery in Eleven Welfare-to-Work Grant Programs, Washington, DC: The Urban Institute, January 2001.
8. The study sites are presented in the following chapter.
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