How Effective Are Different Welfare-to-Work Approaches? Five-Year Adult and Child Impacts for Eleven Programs. Earnings and Fringe Benefits

12/01/2001

As reported in Chapter 4, the NEWWS programs produced increases in employment and earnings for program group members (compared with control group members) over the five-year follow-up period. Table 13.6 shows that the impact on earnings ranged from about $900 (Grand Rapids HCD) to more than $5,000 (Portland) per program group member.

 

Table 13.6
Estimated Program-Control Group Differences in
Earnings, Fringe Benefits, and Personal Taxes per Sample Member
Within a Five-Year Follow-Up Period (in 1999 dollars)
Component of Analysis Atlanta LFA ($) Atlanta HCD ($) Grand Rapids LFA ($) Grand Rapids HCD ($) Riverside LFA ($) Riverside HCD ($) Columbus Integrated ($) Columbus Traditional ($) Detroit ($) Portland ($)
Earnings 2,575 2,089 1,678 906 2,697 1,398 2,086 1,456 1,490 5,171
Fringe benefitsa 384 311 265 143 369 192 330 230 235 708
Total 2,959 2,400 1,943 1,050 3,066 1,590 2,416 1,687 1,726 5,879

Personal taxes

Social Security taxb 174 141 113 61 182 94 141 98 101 349
Federal income tax 9 62 -321 -99 -278 -340 0 -53 59 -258
State income tax 77 73 46 33 5 2 27 15 64 175
State sales and excise tax 25 20 -21 -19 -5 -44 10 6 19 0
Total taxes 285 296 -182 -24 -95 -287 178 67 242 266
Sample size 2,938 2,992 3,012 2,997 6,726 3,135 4,672 4,729 4,459 4,028
SOURCES:  MDRC calculations from state unemployment insurance (UI) earnings records and published data on fringe benefits and tax rates.
NOTES:  Estimates reflect discounting and adjustment for inflation.
Estimates were regression-adjusted using ordinary least squares, controlling for pre-random assignment characteristics of sample members.
Rounding may cause slight discrepancies in calculating sums and differences.
Tests of statistical significance were not performed.
a These include employer-paid health and life insurance, pension contributions, and workers' compensation. Paid leave is captured directly by the earnings estimate. Employee-paid Social Security and Medicare taxes are included as tax payments.
b Employee portion only.

Fringe benefits  employer-provided health and life insurance, pension contributions, and worker's compensation  were part of sample members' total compensation from working and thus were included in the benefit-cost analysis.(15) They ranged by region from 13.7 percent (the West) to 15.8 percent (the Midwest) of earnings.(16) Increases from earnings and fringe benefits yielded an average increase in total work-related compensation that ranged from $1,050 per program group member in Grand Rapids HCD to $5,879 per program group member in Portland.(17)