How Effective Are Different Welfare-to-Work Approaches? Five-Year Adult and Child Impacts for Eleven Programs. A Brief Review of Two-Year Impact Results

12/01/2001

Several reports have documented the range of effects achieved by all 11 NEWWS programs within a two-year follow-up period.(30) This report extends and expands on these two-year findings, lengthening the follow-up period to five years and including additional outcome measures. As a basis for understanding the long-term findings, this section recaps the two-year findings, noting which welfare-to-work program strategies were more or less successful in helping welfare recipients achieve self-sufficiency in the relatively short run.

All programs, regardless of their approach, increased participation in activities designed to promote employment during the two-year follow-up period. As expected, employment-focused programs increased participation primarily in job search activities, whereas education-focused programs increased levels primarily in basic education and vocational skills training classes. Very different patterns of participation impacts were found for individuals who entered the study with a high school diploma or GED certificate and for those who did not have these credentials. In most education-focused programs participation impacts were concentrated among those without a high school diploma or GED and resulted primarily from large increases in attendance in basic education; only small increases in attendance in post-secondary education or vocational training were found for the education-focused programs, and they were generally among only high school graduates or GED holders. In contrast, large impacts on participation in job search were achieved for both groups in the employment-focused programs.

Some education-focused programs, as well as the Portland program, were able to produce relatively large two-year impacts (about 10 percentage points) on GED attainment among sample members who did not have a high school diploma or GED certificate at study entry. Of the seven education-focused programs, the Grand Rapids HCD, Riverside HCD, and Columbus Traditional programs had this effect. The Portland program, in addition to boosting GED receipt, increased the rate at which those without education credentials obtained a trade license or certificate by 12 percentage points. For sample members with a high school diploma or GED certificate at study entry, only three programs (Atlanta LFA and HCD and Grand Rapids HCD) increased receipt of a trade license or certificate.

As expected, employment-focused programs produced larger gains in employment and earnings over the two-year follow-up period than education-focused programs. A majority of control group members in all sites except Riverside, the site with the most difficult labor market, found jobs on their own at some point within two years of random assignment and, as a group (including zeroes for nonearners), had average earnings during the second year of follow-up ranging from $2,127 (Oklahoma City) to $3,978 (Columbus). The Portland program attained the largest earnings increase of all programs, with members averaging more than $900 per year in earnings above control group members. Equally important, employment and earnings gains in Portland grew larger over time and reached their highest levels at the end of year 2. The other employment-focused programs produced moderate earnings increases, ranging from $400 to $650 per year, that grew smaller toward the end of year 2.

Several of the education-focused programs began to show moderate impacts in year 2. By the end of year 2 all but two of the education-focused programs had attained increases in employment and earnings that equaled or exceeded the gains achieved by all employment-focused programs except the Portland program. The two exceptions to this pattern, the Riverside HCD and Oklahoma City programs, did not raise employment or earnings levels in year 2.

All programs reduced two-year welfare dependency to some degree. Control group members in all but one site remained on welfare for an average of 16 to 20 months during the two-year follow-up period and received payments averaging between $3,624 (Oklahoma City) and $10,302 (Riverside HCD) during this period. Seven of the 11 programs, a mixture of employment- and education-focused approaches, decreased cumulative welfare expenditures by more than 10 percent, a historically large effect; welfare reductions in the other four programs were smaller. The Portland program produced a large decrease in welfare receipt that persisted at a high level throughout the follow-up period, showing a 12 percentage point decrease in welfare receipt during the last quarter of the two-year period; all other programs had reduced welfare receipt at this point by 3 to 7 percentage points. However, at least 40 percent of sample members in the programs were still relying to some extent on welfare at the end of two years.

Most programs increased sample members' reliance on earnings rather than welfare, but family net incomes were largely unchanged. As a result, within a two-year follow-up period the programs lifted few families above the poverty line. Impact estimates of reductions in welfare, Food Stamps, and other benefits generally matched or exceeded impact estimates of earnings gains. Including estimates of income from the Earned Income Tax Credit (EITC) produced little change in this finding for all programs except Portland's, which attained the largest and most consistent gain in total combined income ($238, or $425 including the EITC estimate, for year 2 of the follow-up) and also produced a small increase in the proportion with combined incomes above the poverty level (4 percentage points, or 7 percentage points including the EITC estimate, in year 2).

Although no programs had pervasive negative effects on sample members in the first two years of follow-up, some individuals were adversely affected. In year 2 of follow-up six programs (some employment-focused and some education-focused) produced small increases in the proportion of sample members with combined income from welfare, Food Stamps, and earnings equivalent to less than 50 percent of poverty levels. In addition, several programs (representing both types of approaches) increased the rate at which individuals left welfare without a job (although other persons in their household might have been working). Finally, some programs that increased employment also decreased family health insurance coverage (as reported by parents) and increased out-of-pocket child care expenditures.

The programs did not have widespread, large, or consistent two-year effects on the children of sample members, but positive and negative effects occurred in some programs. No programs in the evaluation provided direct services (with the exception of child care assistance) to children. Program-produced changes in the lives of sample members (virtually all mothers) may, nevertheless, influence the well-being of children. There is evidence that some of the programs affected the likelihood of at least one child in a family having behavioral, educational, or health and safety problems. There was not, however, a consistent pattern of benefit or harm to children. In addition, employment- and education-focused programs did not appear to affect children differently; there was no consistent evidence that one particular approach affected children more or less or was more likely to help or harm children.

Several employment- and education-focused programs attained at least moderate two-year employment and earnings gains for the "most disadvantaged" sample members. Five programs (Portland, Grand Rapids LFA and HCD, and Riverside LFA and HCD) increased employment and earnings for individuals who at study entry did not have a high school diploma or GED, had not worked in the prior year, and had been on welfare cumulatively for two years or more. These five programs and two others (Detroit and Columbus Integrated) also reduced the amount of time that the most disadvantaged individuals spent on welfare during the two-year follow-up period. Notably, for individuals who entered the study without a high school diploma or GED, the two-year employment and earnings impacts of the education-focused programs did not exceed those of the employment-focused programs.(31)

High enforcement programs did not produce the largest two-year impacts, but low enforcement programs resulted in only small effects. High enforcement programs, notably those in Grand Rapids and Columbus, did not necessarily produce the largest impacts. However, the two low enforcement programs  Oklahoma City and, in its early stages, Detroit  yielded only small impacts. It thus appears that a minimum level of enforcement by program staff is required to produce at least moderate earnings and welfare impacts, presumably because this extra "push" is needed in order to engage in program activities those who normally would not participate on their own initiative.

While many programs achieved positive two-year effects on employment, earnings, and reduced use of welfare, the Portland program stood out as unusually successful. The Portland program substantially increased employment and earnings, helped people to get good jobs, lowered welfare receipt, and achieved these outcomes for a cross section of sample members. The results are probably due to a combination of factors. While its employment message was strong, the program offered high-quality education and training services as well as job search, enforced a participation mandate, and had strong job development and placement services. In addition, contextual factors may have contributed to the program's success. In particular, it worked with a less disadvantaged welfare caseload (relative to the other studied programs) and operated within a good labor market with a relatively high state minimum wage.