Families on TANF in Illinois: Employment Assets and Liabilities. Policy Relevance

06/10/2003

Entry-level jobs held by TANF recipients who are attached to the labor market are unlikely to lead to self-sufficiency.

Illinois' efforts to promote employment among recipients have yielded some success; two out of every five heads of single-parent TANF cases in the state are working for pay. However, few of these individuals hold jobs with convenient hours, wages over $8.00 per hour, and fringe benefits. Recipients who do hold such jobs have longer terms of employment, on average, than recipients with other jobs. They are also more likely to believe that their jobs provide opportunities for advancement.

These findings suggest that increased efforts to improve the quality of the jobs secured by TANF recipients could improve job retention and advancement as well as place recipients on a more certain path to long-term self-sufficiency. This is a difficult task under even the best economic conditions.

Stopping the TANF clock can help promote work, but the criteria for doing so determines who benefits.

Illinois stops the 60-month TANF clock while recipients comply with program work requirements by working 30 or more hours per week or maintaining a 2.5 grade point average in a full-time postsecondary education program. Although this strategy has been advocated elsewhere by some researchers and policymakers, others believe that it might undermine the temporary nature of cash assistance as mandated by PRWORA. However, the proportion of long-term TANF recipients is lower in Illinois than it is nationwide, suggesting that stopping the clock can promote work without prolonging cash assistance.

In Illinois, the stop-the-clock policy rewards those who are meeting the full work requirement of 30 hours per week. Stopping the clock for compliance with broader program requirements--such as looking for work or participating in other work-related activities--is an option that could benefit those trying to build connections with the labor market and those at greatest risk of reaching the 60-month lifetime limit.

An increase in work participation rates will require innovative and integrated strategies.

In 2002, the federally mandated work participation rate was that 50 percent of the heads of single-parent TANF cases must work or participate in work-related activities for at least 30 hours per week. Today's policy debate on welfare reform centers on increasing the number of required weekly work hours, decreasing the types of activities that can be defined as "work," and increasing the proportion of families on the caseload that are working. Yet, even in Illinois, which has one of the nation's strongest work-incentive packages, only 30 percent of the heads of single-parent cases are working at least 30 hours per week.

The state's experience to date suggests that a narrowing of the definition of work and work-related activities would require states to adopt even more innovative strategies for moving recipients into work. However, the TANF caseload, at least in Illinois, is heterogeneous, and each case head brings a different set of liabilities to the labor market. Our evidence suggests that a strategy that focuses on just one or two liabilities would do little to raise the probability of substantial employment (30 or more hours per week) for the caseload as a whole. In addition, the policy simulations based on our multivariate analyses suggest that the most promising approaches are those that would address sets of multiple related liabilities. Our simulations suggest that, in Illinois, a strategy that would increase work experience while reducing the logistical challenges of child care and transportation would have the greatest impact on employment rates.

A strategy that focuses on the acquisition of work experience might include work experience or transitional job programs. Evidence on the effectiveness of work experience programs is mixed and suggests that the programs often do not meet the needs of individuals who face multiple liabilities for employment. Transitional job programs more closely mirror the working world by providing a paycheck while meeting the needs of hard-to-employ recipients through enhanced case management and job coaching. An advantage of both of these types of programs is that they can increase work participation rates among TANF recipients in the short term while giving them the work experience and skills development they need to find unsubsidized jobs in the long term. One disadvantage of transitional job programs is that they can be costly.

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