Evaluating Two Approaches to Case Management: Implementation, Participation Patterns, Costs, and Three-Year Impacts of the Columbus Welfare-to-Work Program. 4. Cost of Employment-Related Services in the Integrated and Traditional Programs


The preceding chapter examined the participation in employment-related activities by sample members assigned to the integrated and traditional programs and to the control group within the two-year period following their entry into the study. These are important indicators of the level of investment made in each individual required to participate in JOBS. This chapter presents information on total expenditures for employment-related services over the two-year period, and it shows how these costs varied across program activities and support services.

In addition, this chapter presents estimates of the cost that the government incurred for employment-related services for integrated and traditional group members over and above what was spent on the control group. This is referred to as the net cost per program group member, and it is the difference between the total cost per program group member (integrated group member and traditional group member) and per control group member of all program-related and non-program-related employment services that were used during the two-year follow-up period.

It is important to emphasize that to match the methodological approach used in the cost analyses of the other programs studied in the NEWWS Evaluation, the cost estimates in this chapter reflect only expenditures on employment-related services. That is, the cost estimates presented here reflect the costs of the JOBS program and do not include expenditures on income maintenance services. Income maintenance costs will be included in a benefit-cost analysis in the final report in the evaluation. That analysis will determine whether the programs' net benefits are greater than their net costs after five years. It would be premature to present a two-year benefit cost analysis here because the total return on the JOBS program may be evident only after several years.The later report also will compare the benefits and costs of the two Columbus programs with those of the other programs studied in the NEWWS Evaluation.

The cost figures presented here include JOBS and non-JOBS activities, and they are calculated per program group member rather than per participant. Non-JOBS costs are included in the total cost because they represent additional investments of resources that have the potential to affect program group members' future earnings and welfare receipt, just as they do for control group members. Thus, they are included in the gross cost estimates used to compare the cost per program group member with the cost per control group member.

Similarly, it is necessary to report costs per program group member, not just per participant in JOBS. The requirement to participate may have affected sample members' behavior (some individuals may have chosen to avoid the mandate by finding employment on their own or by leaving welfare). As is true for controls, program group members who did not participate in JOBS could have participated in education and training services on their own. In addition, to exclude nonparticipants could introduce bias because the program may have influenced sample members' behavior.

As described in Chapter 1, unlike random assignment in most of the other NEWWS Evaluation programs, in Columbus random assignment occurred in the welfare office at the point clients were determined to be JOBS-mandatory and were referred to the JOBS program. Therefore, the Columbus sample includes some people who were informed about the program by an income maintenance (IM) worker but never received further information about the program from a JOBS case manager (either a traditional JOBS case manager or an integrated case manager), and who never participated in the JOBS program. Sample members in the program groups who remained JOBS-mandatory may have been sanctioned for noncompliance. Therefore, even though these sample members may not have participated in the JOBS program, costs were incurred on their behalf, and other investments may have been made through nonwelfare sources. Although including nonparticipants in the calculations yields correct cost estimates, because the sample is systematically different from those in the other programs in the evaluation, the cost figures presented here are not directly comparable to those in the other sites. To facilitate cross-site comparisons, nonexperimental estimatesВ  namely, estimates including in the base only participants in a specific activityВ  are used in some places.

Under traditional case management design, clients were assigned a separate IM worker and a JOBS case manager. Sample members in the integrated group were assigned to a single worker who performed both income maintenance and JOBS functions. Case managers in both groups served clients in all programs (for example, the Food Stamps Employment and Training program and the General Assistance [GA] work program), not only the JOBS program.(1) As noted above, welfare department costs in this chapter represent expenditures to provide services for the JOBS program only; costs for income maintenance functions will be accounted for in a future analysis.

To summarize the main findings presented in this chapter: The estimated total cost (in 1993 dollars) per program group member for employment-related services within two years after random assignment was $3,018 for the integrated program and $2,589 for the traditional program. The net costs of the integrated and traditional programs were $2,149 and $1,720, respectively. The integrated program had somewhat higher employment-service costs because it had higher unit costs, particularly for case management and vocational training. However, given that the case management experiment in Columbus was as much about reforming income maintenance as it was about JOBS, without the income maintenance costs it is not possible to draw final conclusions about the comparative total costs of the two program approaches. As mentioned, a future benefit-cost analysis will include these costs.

The original design for the integrated program included reduced caseloads of about 100 cases each, which might have made integrated case management a higher-cost approach. However, as implemented, integrated case managers were assigned about 140 cases for whom they provided both income maintenance and JOBS services. Average caseloads for IM workers and traditional JOBS case managers were approximately 260 cases each.(2) Thus, the relatively small cost difference between the two programs is not surprising.