Further Progress, Persistent Constraints: Findings from a Second Survey of the Welfare-to-Work Grants Program

06/01/2000

A major federally funded initiative has been unfolding over the past two years to help welfare recipients and other low-income Americans move into employment. In 1997, the Balanced Budget Act (BBA) authorized the U.S. Department of Labor to award $3 billion in Welfare-to-Work (WtW) grants to states and local organizations. These grants support efforts, over a three-year period, to help the hardest-to-employ recipients of Temporary Assistance for Needy Families (TANF), as well as noncustodial parents, prepare for employment, find jobs, and stay employed.

This report documents the continuing implementation progress of the Welfare-to-Work grants program. The findings presented are based on a survey of all WtW grantees, designed to provide an overall description of program structure and sponsorship, target populations, services provided, scale of operations, outcomes achieved, and challenges encountered. To capture changes that unfold as implementation advances, the survey has been conducted twice. Results of the first survey, conducted in late 1998, have already been reported (Perez-Johnson and Hershey 1999). This report is based on the second survey, conducted in late 1999.

The Second WtW Grantee Survey. The second survey began with a sample of 681 formula and competitive grantees, compared to 598 in the first survey. The sample increased because additional competitive grants were awarded after the first survey was administered. A response rate of 71 percent was achieved, from respondents who approximately mirrored the composition of the overall sample. The analysis compares overall results for the first and second surveys, as well as changes in program implementation status for grantees who responded to both surveys. Repeat respondents accounted for 64 percent of the 487 grantees who completed the second survey.

Finding 1:
WtW Implementation Has Advanced, But Participation Levels Still Lag
Most WtW grantees, except recently funded ones, are now delivering services. However, restrictive eligibility rules still in effect in late 1999 continued to impede enrollment; as a result, the average pace of enrollment has not increased. Enrollment of noncustodial parents has been especially difficult.

WtW Program Implementation. The overwhelming majority of local WtW grantees have now moved beyond planning and into service delivery. Overall, 89 percent of the respondents to the second survey said that they had begun operating their WtW programs, compared to only 50 percent in the first survey. Grantees are also at a more advanced stage of implementation than at the time of the first survey. Nearly 89 percent of the respondents to the second grantee survey had not only begun program operations but had also begun formally enrolling WtW participants, and had enrolled an average of 194 people overall. In the first survey, only 43 percent of respondents had begun formal enrollment, and they had an average of 64 people enrolled.

Grantees' Progress Toward WtW Participation Goals. Although most WtW grantees have begun enrolling participants, the pace of enrollment continues to be slow. At the time of the second grantee survey, the 431 organizations indicating that they had begun WtW program enrollment had an average of 194 participants. While this figure triples the average enrollment levels reported in the first survey (64 participants), survey responses also reflect the continuing enrollment difficulties that grantees have encountered. The average pace of enrollment has remained at about the same low level found in the first grantee survey: 19 new participants per month. At this pace, grantees would need a total of 41 months, on average, to meet their stated participation targets. This figure extends notably beyond the 30 months that might be considered the maximum period over which WtW enrollment would occur, given the overall three-year grant period.

Participation of males (generally noncustodial parents) in WtW to date lags notably behind expectations. On average, grantees have enrolled only about 20 male WtW participants. This figure translates into about half of the expected 20 percent share of participants that grantees expected would be noncustodial parents.

Referrals to and enrollment in WtW programs are lower than original projections for three reasons. First, TANF recipients who might be eligible for WtW services frequently are served in TANF work-first programs, find employment on their own, or otherwise leave the TANF rolls before referral to a WtW program. Second, the eligibility criteria originally defined by Congress for WtW programs have restricted the percentage of TANF recipients who can be confirmed as eligible for WtW services. Third, declining TANF caseloads have shrunk the pool of potential eligibles who might be referred.

Two factors may still make it possible for the WtW grants program to deliver services as broadly as grantees have planned. First, recent legislative changes expanding WtW eligibility should ease recruitment difficulties, improving the pace of enrollment and ultimately bringing about increased overall levels of participation. Second, the Administration has submitted a proposal to extend the period over which grantee organizations may use their WtW funds by two years; if approved by Congress, such a change would enable all grantees to continue enrolling new participants longer, and thus improve their chances of meeting WtW participation targets.

Finding 2:
The Projected Scale of WtW Programs Remains Modest
Although, on average, second survey respondents have received more WtW funds than respondents a year ago, they have formulated more conservative participation targets. They are also less likely to combine WtW funds with funds from other sources, especially TANF and JTPA, to operate their programs. These adjustments reflect mainly the enrollment difficulties encountered to date.

Scale of WtW Programs. As additional funds have been distributed to WtW grantees, projections of overall enrollment have increased. On average, respondents to the second survey reported having nearly $3.0 million, compared to $2.2 million reported by respondents to the first survey. Overall expected enrollment also increased, but not in proportion to increases in available funding. Respondents to the second survey expect, on average, to serve 595 participants, compared to 537 anticipated by respondents to the first survey. While the average funding levels reported in the second survey were 33 percent higher than those reported in the first survey, mean expected total enrollment in WtW programs was only 10 percent higher. Field visits and other contacts with grantees suggest that some have become a bit more conservative in their projections of enrollment, based on the recruitment difficulties encountered in the early stages of program implementation.

WtW Program Structure. WtW programs continue to involve a complex network of collaborators, most often with the local Private Industry Councils or Workforce Investment Boards as the lead organization. Results from the second survey suggest, however, that grantees may be less inclined to exploit other funding sources and integrate them with WtW grant funds than appeared true when the first survey was conducted. In the second survey, about half of all respondents reported that they are combining WtW funds and other resources to help pay for WtW services or activities  down from the 65 percent reported in the first survey. Whereas 49 and 41 percent of grantees had said in the first survey that they were using Job Training Partnership Act (JTPA) and TANF funds, respectively, to complement WtW funds, only 25 percent reported drawing on each of these sources in the second survey.

Although the complexity and variety of WtW program funding patterns defy simple explanations, the apparent decline in reliance on other funding sources may be due in part to shortfalls in program enrollment associated with the restrictive eligibility criteria specified in the BBA. Faced with a smaller participant population, some WtW grantees may be choosing not to press for, or allocate, JTPA and TANF funds to serve WtW participants. Since WtW enrollment has been lower than original projections, grantees may be reserving funds from other sources for other uses, including serving individuals who fail to qualify for WtW services.

Finding 3:
Grantees Emphasize Unsubsidized Jobs But Set Realistic Placement Goals
An unsubsidized job is the ultimate outcome grantees want for all participants, but grantees clearly expect some program attrition and have some reservations about availability of jobs. Consequently, they anticipate placing somewhat less than half of all enrollees in unsubsidized employment. Still, supported work activities of various types are envisioned by grantees as an interim step for roughly two-thirds of the participants they expect to place in unsubsidized jobs.

WtW Service Priorities. In keeping with the goals of the WtW program, grantees have maintained a strong emphasis on preparing participants for work and helping them find employment. Job readiness and job placement, along with assessment and case management, are among the most commonly offered components of WtW programs, as reported in both surveys. However, WtW grantees recognize that their participants' needs go beyond finding a regular job in the open market. Although almost two-thirds of grantees continue to use WtW funds to make placements in unsubsidized jobs, even greater emphasis is placed on various types of supported work activities. Some form of supported work activity  including on-the-job training, work experience, subsidized employment, or community service  is a feature of almost 85 percent of grantees' programs. Job retention and other post-employment services are given as much or more emphasis as regular job placement, both in terms of the number of grantees offering such services and the portion of funds devoted to them.

WtW Employment Placement Goals. Virtually all WtW grantees aim to place WtW participants in employment, although they may use other nongrant funds for that purpose and reserve WtW grant funds for interim employment activities and other preparatory steps. Ninety-six percent of grantees responding to the second survey indicated that they will place WtW participants in unsubsidized jobs. At the same time, grantees have set realistic targets for placement of WtW participants into unsubsidized employment. The total number of unsubsidized job placements grantees expect to make during the period of their WtW grant is under half (44 percent) of all the people they expect to enroll as program participants.

Finding 4:
Most Placements to Date Have Been in Low-Wage, Service Occupations
Although low enrollment has affected placement rates, grantees have moved expeditiously to place WtW participants once they are enrolled. Grantees responding to the survey had made about a quarter of their projected placements in work activities. Most placements  regardless of activity type  are in service and administrative support positions that participants can get even with limited skills and poor work history. However, wages in unsubsidized employment average just $6.81 per hour, and opportunities for advancement are often limited.

Work Activity Placements to Date. WtW grantees are moving substantial numbers of participants into both unsubsidized employment and supported work activities that can provide an interim step towards such employment. Of the 480 grantees providing placement information, 350 (73 percent) indicated that they had already placed WtW participants in work activities. By the time they responded to the survey, these grantees had made more than 50,000 placements (all types combined). Survey responses thus suggest that grantees are moving expeditiously to place WtW participants in work activities once they are enrolled in the program.

Nevertheless, grantees have a long way to go to meet their placement goals, largely because of the slow pace of enrollment into their WtW programs. Placements in unsubsidized employment at the time of the second survey had reached only 24 percent of grantees' goals; placements in other types of supported work activities ranged from about 13 percent to 34 percent of placement goals. As with enrollment, the pace of placement will have to quicken if grantees' goals are to be met within the originally defined three-year grant period. On average, grantees have made 40 placements per month since they started enrolling WtW participants. To meet the overall placement goal across all programs, grantees will have to increase this pace to about 60 per month.

Placement Jobs of WtW Participants. Given the low skills and poor work history that define the WtW-eligible population, it can be expected that the jobs in which WtW programs place participants will be relatively low-wage, low-skill occupations. The challenge facing grantees lies in preparing participants for these jobs so they can hold on to them and, over time, advance to higher wages and perhaps more responsibility. As could be expected, WtW placements to date are concentrated in service and administrative occupations. Almost 90 percent of WtW grantees listed one or more jobs classified as service occupations  janitorial or maid service, home health and other personal care aides, and child care workers, for example  among the top 10 occupations in which they placed participants. About 76 percent of grantees reported administrative support occupations  such as receptionists, teacher's aides, and stock clerks  among their 10 most common placements.

The entry-level jobs that WtW participants enter require little education or training, but advancement can be difficult. Typically no more than a high-school diploma is required and, even with little or no work experience, participants can be placed in jobs. While opportunities for advancement tend to be limited, some jobs can lead to better pay for those who persist and particularly those who complete more education or training.

Wages of WtW Participants. The wages participants earn when they enter these jobs are modest. Grantees reported that participants entering unsubsidized jobs earned an average of $6.81 per hour. In paid work experience and subsidized public sector jobs, WtW participants were reported to be receiving $5.50 to $5.60 per hour. OJT placements have been running at an average of $6.47, probably reflecting the higher skill levels of the positions for which employers are willing to make such arrangements.