Targeted Help for the Hard-to-Employ: Outcomes of Two Philadelphia Welfare-to-Work Programs

09/02/2004

Contents

 

  1. How Did the RSC and TWC Programs Operate?
  2. What Were RSC and TWC Participants' Outcomes?
  3. What Factors Were Associated with Differences in RSC and TWC Outcomes?
  4. What Can We Conclude from this Study?

Programs to help the hard to employ move into jobs and become self-sufficient have become increasingly important in the context of time-limited public assistance under the welfare reforms of 1996. The Welfare-to-Work (WtW) grants program provided states and local areas with flexible funding for programs to help the hard to employ move into employment. This report examines two programs that were central components of the overall WtW strategy in Philadelphia  the Regional Service Centers (RSCs) and the Transitional Work Corporation (TWC). These programs differed in their approaches to serving the hard to employ and in their target populations. The RSCs offered 30 days of basic job search assistance services to the broad WtW-eligible population, while TWC provided paid work experience for up to six months and targeted WtW-eligible people who had little or no work experience.

The main objective of this study was to examine the employment, earnings, and TANF receipt outcomes of participants in these two WtW programs. Since the study is not based on the random assignment of clients to these programs, differences in the outcomes for RSC and TWC participants do not provide evidence of program impacts or the relative effectiveness of these two program models. The study does, however, provide an overall description of Philadelphias WtW participants outcomes after program entry and a comparison of the outcomes for different populations served with different program approaches.

 

How Did The RSC And TWC Programs Operate?

  • The RSC and TWC programs differed in the populations they targeted and in the intensity and duration of their service approaches.

The RSCs were designed to serve the broad population of WtW-eligible clients in Philadelphia. They operated in seven locations across the city and provided clients with up to 30 days of direct job search and placement assistance. Clients attended job search readiness sessions, conducted directed job search, and met regularly with an employment adviser. After job placement, employment advisers followed up with clients for up to one year to promote job retention.

In contrast, the TWC program provided services to the hardest-to-employ among the WtW-eligible population: those who had little or no work experience and faced difficulties becoming employed. TWC provided clients with 25 hours a week of paid transitional employment for up to six months, followed by placement in unsubsidized jobs. TWC career advisers monitored clients progress and helped resolve problems at the transitional positions. In addition, TWC clients attended 10 hours a week of wraparound training, which included such topics as GED preparation, basic skills, job readiness, and life skills. After clients obtained unsubsidized employment, TWC offered up to $800 in job retention bonuses and two quarters of retention-focused case management.

  • The programs were sequenced to concentrate the more intensive TWC services on the hardest-to-employ WtW-eligible clients.

The RSC and TWC programs were intentionally sequenced so that harder-to-serve clients would receive TWC services. Initially, staff from the city welfare agency referred WtW-eligible clients to the RSCs, which then identified clients for referral to TWC. If clients were not job-ready or were unable to find employment after the 30 days of services the RSCs provided, the RSCs referred them to the more intensive TWC program. RSC staff also had the discretion to identify people entering RSC services who were likely to need more intensive services and refer them directly to the TWC program. However, early underenrollment in the TWC program led TWC, in 2001, to begin conducting its own direct outreach targeting the hardest-to-serve clients. Some participants thus entered TWC services without having enrolled at an RSC.

 

What Were RSC And TWC Participants' Outcomes?

  • RSC and TWC participants employment increased.

Participants in both programs had immediate increases in employment upon program entry, due to the programs design emphasis on quick placement into permanent or transitional jobs. (At TWC, much of the immediate increase in employment was associated with placement in subsidized jobs as part of the TWC program.) These immediate increases were followed by declines in employment in the quarters after program entry (Exhibit 1). Even after these declines, four quarters after program entry, participants from both programs had higher employment rates than they had four quarters before program entry.Despite these gains, participants employment tended to be unstable over the year after program entry; nearly all RSC and TWC participants (90 and 95 percent) reported that they had at least one spell without employment in the year after program entry.

Exhibt 1
Philadelphia WTA Outcomes Study: Employment Rates Over Time

ex1.gif

Source: Administrative Data from State of Pennsylvania

  • Participants earnings increased.

Participants in both programs had steady increases in their earnings over time after program entry (Exhibit 2). Average quarterly earnings for RSC and TWC participants one year after program entry ($1,232 and $842) were twice the earnings of participants a year before entry ($520 and $429). Higher earnings were due, in part, to movement to new jobs with higher wages and more hours. Mean hourly wages in the most recent job, as reported by RSC participants in their follow-up interviews, were higher than in their first job ($7.72 versus $7.15). A similar pattern was observed for TWC participants ($7.09 versus $6.28). Average hours worked per week also increased for RSC participants (32.9 to 33.7) and for TWC participants (29.6 to 31.6), from their first job to the most recent.

Exhibit 2
Philadelphia WTA Outcomes Study: Earnings Over Time

ex2.gif

Source: Administrative Data from State of Pennsylvania

  • Participants TANF receipt declined steadily.

In the quarters after program entry, RSC and TWC participants TANF receipt steadily declined (Exhibit 3). By the sixth quarter after program entry, slightly more than half the participants remained on TANF. In addition, many fewer RSC and TWC participants received TANF in all four quarters after program entry (47 and 64 percent) than in all four quarters before program entry (70 and 80 percent).

Exhibit 3
Philadelphia WTA Outcomes Study: Rate of Tanf Receipt Over Time

ex3.gif

Source: Administrative Data from State of Pennsylvania

  • Consistent with the targeting and sequencing of the programs, RSC and TWC participants differed in their outcomes over time.

One and a half years after program entry, RSC participants had higher rates of employment, higher earnings, and lower rates of TANF receipt than TWC participants (Exhibits 1, 2, and 3). However, RSC and TWC participants also differed in their employment, earnings, and TANF receipt before program entry. The more positive outcomes achieved by RSC participants could thus reflect the Philadelphia WtW program strategy, with the RSCs offering a more basic intervention for the general WtW population and TWC offering a more intensive service for people facing greater employment challenges.

 

What Factors Were Associated With Differences In RSC And TWC Outcomes?

  • Observable factors, including background characteristics, economic conditions, and program completion, are likely to be associated with outcomes.

RSC and TWC participants had statistically significant differences in their background characteristics. These differences were generally small, however, suggesting that both programs worked with very disadvantaged populations. The RSCs and TWC enrolled the participants whose outcomes we examined over different periods, so changes in economic conditions could have affected observed employment success as well. Finally, there were differences in the rate at which RSC and TWC participants completed their prescribed programs and were placed in jobs. This divergence could reflect differences in observable and unobservable participant characteristics, as well as differences in the nature of RSC and TWC program services, both of which could affect longer-term job success.

We used multivariate statistical techniques to control for the effect of differences between RSC and TWC participants (other than program services) on observed outcomes. To identify the factors that contributed to differences in outcomes, we regressed key outcomes on participants demographic characteristics, prior work experience, prior TANF receipt, economic conditions after program entry, and an indicator of RSC/TWC status.

  • Observable factors explained most of the difference in RSC and TWC participants employment and about half their differences in earnings and TANF receipt.

Controlling for demographic characteristics, prior work experience, prior TANF receipt, and economic conditions accounts for the differences in the percentage of RSC and TWC participants employed one and a half years after program entry. TWC-RSC differences in earnings and TANF receipt remained, however, with about half the difference explained by these observable factors. These differences in earnings and TANF receipt may diminish over time, if TWC participants gain more work experience in unsubsidized jobs and catch up to RSC participants.

  • Educational attainment, prior earnings, and prior TANF receipt were key factors related to outcomes.

Both educational attainment and prior earnings provide a good indication of peoples skills and prior workplace performance and, thus, their ability to succeed in the labor market. Not surprisingly, having a high school diploma or a GED was a highly significant factor affecting employment, earnings, and TANF receipt. Average earnings in the four quarters before program entry were also significantly related to both postprogram employment and earnings. Similarly, TANF receipt in all four quarters before program enrollment was significantly related to TANF receipt six quarters after program enrollment.

  • The effects of unobserved factors remain important and can be disentangled only with more rigorous research.

While regression adjustments reduced the TWC-RSC differences in employment, earnings, and TANF receipt, they did not completely erase them. Taking into account whether participants completed their program (by reaching the point of job placement) further reduced the difference in outcomes. Program completion, however, can be a signal of unobserved participant characteristics (such as motivation or effort), program service design, or both.

After all observable factors are taken into account, important differences remain in regression-adjusted outcomes. TWC participants overall and RSC noncompleters had similar observed characteristics and achieved similar outcomes. When comparing TWC completers and TWC noncompleters to RSC noncompleters, however, we find important differences in outcomes, which suggests that unmeasured differences remain. TWC completers perform better than RSC noncompleters, while TWC noncompleters perform worse than RSC noncompleters. Given the modest aims and design of this study, we cannot reach definitive conclusions about the extent to which such differences are due to differences in the programs versus unobserved differences among program participants or other factors. The potential benefits of subsidized work experience relative to direct placement in unsubsidized employment for the hard to employ can be assessed only through a randomized trial of such programs.

 

What Can We Conclude From This Study?

  • Intensive services can target the most disadvantaged.

The design and sequencing of the RSC and TWC programs represented an innovative approach to program development. Allowing staff to identify people who need more intensive services and refer them directly to the TWC program could let participants unlikely to succeed in less intensive services bypass such services and perhaps shorten the time for them to enter employment and move off TANF. Such a strategy can also avoid the potential discouragement participants might feel if they have to fail at one program before accessing more intensive services. Our finding that TWC participants, in general, were similar along observable characteristics to RSC noncompleters suggests that the intended targeting was both feasible and successful in these programs; TWC served people who looked like the participants the RSCs failed to place in jobs.

  • Services related to retention and advancement may help participants build on their employment experience and achieve further gains.

Those who maintain employment continue to build on these experiences and increase their earnings over time. RSC and TWC participants tended to move to jobs with better wages, hours, and benefits when they switched jobs. Both job retention and advancement services, including ongoing job search and placement services, are potentially important components to help participants build a strong employment record that could help lead them to further employment success.

  • Further research is needed to clarify how programs like the RSCs and TWC contribute to participant outcomes.

Program enrollment shortfalls made it impossible to implement the original random-assignment design planned for the evaluation of TWC as part of the overall national WtW evaluation. The results of this special study on TWC and RSC outcomes, however, suggest that the intensive TWC intervention might have partially, but not completely, made up for the greater employment challenges TWC participants faced. The study, however, leaves questions that only a more rigorous evaluation can answer. Further research could determine the most appropriate targeting of programs like TWC and the RSCs, the best way to pair them in a combined strategy, and the programs actual contributions to participant outcomes.