Early Implementation of the Welfare-to-Work Grants Program: Findings From Exploratory Site Visits and Review of Program Plans. Policy Context for the WtW Evaluation.


Welfare policy today is dramatically different from what it was before Congress enacted PRWORA and the BBA. The most significant change is that PRWORA replaced the entitlement to cash assistance, the cornerstone of the former Aid to Families with Dependent Children (AFDC) program, with the Temporary Assistance for Needy Families (TANF) block grant to states. States have substantial discretion in designing their TANF programs, but federal law requires that the welfare program be time-limited and that it emphasize moving recipients off the welfare rolls and into the labor force. Within the framework of welfare reform, WtW grants provide additional resources to states and communities to help recipients make a transition to lasting employment.

The Shift to a Flexible, Transitional, Work-Oriented Welfare System.  Under TANF, most families can receive federally funded assistance for a total of only 60 months (or less, at state option) during their lifetime, and all adult recipients are required to work if they are job-ready or once they have received assistance for 24 months. To ensure that state TANF programs emphasize work, PRWORA mandates that states meet steadily increasing requirements for the percentage of their TANF caseload that must be engaged in employment-related activities.(1)

As a result of time limits and the increased emphasis on work, most state TANF programs stress job search assistance and encourage, or require, recipients to find jobs as quickly as possible. This "work first" approach to preparing for employment is a departure from the encouragement of extended education and training that was common under the Job Opportunities and Basic Skills Training (JOBS) program, the AFDC welfare-to-work program that preceded PRWORA.

In addition to placing greater emphasis on moving recipients quickly into jobs, many states have used the flexibility allowed under PRWORA to reinforce work requirements. States have imposed even more stringent penalties for noncompliance, as well as lifetime limits shorter than the 60-month maximum prescribed in PRWORA. Most states reinforce work requirements by providing more generous earned-income disregards and assistance with child care and transportation expenses than they provided under the AFDC program.

Although states must meet several federally defined goals and requirements, PRWORA transfers to the states much of the decision-making authority the federal government previously had over the AFDC program. Thus, while many states have adopted the types of changes noted above, how these TANF policies and program features are combined varies across states and localities. These variations, in turn, influence the design and implementation of programs operating with WtW grants, because these programs must be consistent with state TANF policies. Therefore, from an evaluation perspective, understanding the design and implementation of a given state or locality's WtW program also requires understanding its TANF program.

Declining TANF Caseloads and the Increasing Concentration of Hard-to-Employ Recipients.  Welfare caseloads have dropped dramatically over the past several years. From January 1994 to March 1999, the number of families receiving AFDC (and then TANF) declined by 47 percent, from 5.05 million to 2.67 million. Since January 1997, they have declined by more than one-third (U.S. Department of Health and Human Services 1999).

This sharp decline has several implications for the implementation of WtW programs. First, it leaves many states with TANF funds that, when added to their state resources, allow increased spending on services designed to promote employment for those who remain on welfare. Thus, states and localities have at their disposal both WtW and TANF funds with which to address multiple, severe barriers to employment faced by individuals still receiving TANF. Second, to the extent that the decline in caseloads results from the strong national economy and job market, the environment in which WtW and TANF work programs are operating is more conducive to success than would be the case in a slower economy. Meanwhile, states must continue to meet the federal work participation requirement. Finally, as caseloads decline, evidence is mounting that the remaining TANF recipients are, on average, less job-ready and have more personal and family problems than was true of the caseload in earlier years. How these simultaneous effects and implications of caseload decline affect the operation and success of WtW programs will be an important issue for the evaluation as it continues.

WtW Emphasis on Employment for the Most Disadvantaged.  To ensure that grantees target their WtW resources on the hardest to employ, the legislation as enacted in 1997 required that at least 70 percent of all grant funds be spent on people who meet two criteria. First, they must have received TANF or AFDC for 30 months or more or be within 12 months of reaching a TANF time limit. Second, they must face two of three specified barriers: (1) lack of a high school diploma or GED and low reading or math skills, (2) substance abuse problems, and (3) a poor work history. Noncustodial parents  a population not served under TANF  who face two of the three barriers also qualify under the 70 percent criterion, if they have a child in a long-term welfare case. Up to 30 percent of the funds can be spent on TANF recipients or noncustodial parents who have characteristics associated with long-term dependency (such as being a teenage parent or a high school dropout).(2)  The WtW eligibility criteria and required spending targets under the 70/30 provision have been important factors in the design and implementation of programs at the local level.

Organizational Separation of TANF and WtW.  In authorizing the WtW grants program, Congress gave workforce development agencies a share of responsibility for welfare reform. This decision has led to the creation of two distinct administrative and funding structures, one for TANF and one for WtW.

The 50 states and the District of Columbia are authorized to receive a total of about $16.5 billion annually as a TANF block grant from DHHS through fiscal year 2002. TANF is administered at the national level by DHHS, and most states have chosen to administer TANF through a state welfare or human services agency that previously had responsibility for AFDC. A few states (for example, Utah and Wisconsin) have reorganized their human services delivery systems by merging the public assistance functions and employment and training functions within a workforce development agency.

Responsibility for WtW programs is allocated quite differently. Responsibility for WtW rests at the federal level with DOL, and at the local level primarily with workforce development agencies  PICs or workforce investment boards (WIBs). At the state level, the governor designates which agency will administer WtW. In more than three-quarters of the states, the JTPA or workforce development agency is responsible for the WtW funds (Table A.1). One state, Wisconsin, has designated its integrated agency that administers both JTPA and TANF programs to administer WtW.

The WtW grants program has a strong local orientation, and its funding is structured to favor local areas with the greatest need. Seventy-five percent of federal WtW funds are allocated to states based on a formula that considers states' shares of the national poverty population and TANF caseload. States must, in turn, pass 85 percent of the funding they receive to local PICs or WIBs.(3)  PICs and other groups in consultation with them can also apply for separate competitive grants directly from DOL. Thus, at the local level, several programs, funded by TANF or WtW grants, or both, may be engaged in moving welfare recipients into the workforce.

Type of State Agency Number of Formula Grantees Percent of Formula Grantees
JTPA/Workforce Investment Act 39 81
TANF 8 17
JTPA and TANF 1 2
Total States/Territories with FY 1998 Formula Grants 48 100
Source:  National Evaluation of the Welfare-to-Work Grants Program, WtW Grant Review Database, 1999.

Note:  The following states did not participate in the formula grants program in FY 1998: Idaho, Mississippi, Ohio, South Dakota, Utah, and Wyoming.