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

12/01/2001

Table 4.1 provides the first indication of how much the different programs affected the number of people who worked, the number of quarters they worked, and their total earnings over the five-year follow-up period for each of the 11 programs in the NEWWS Evaluation. In addition, results are shown for sample members in need of basic education for the Riverside LFA program so they can be compared with results from the Riverside HCD program, which included only people in need of basic education.(1) (All tables and figures in this chapter show results based on quarterly reports by employers to state unemployment insurance systems.)

Table 4.1 shows that most control group members worked at some point in the follow-up period, even though most of them were never eligible for program services and none of them were eligible for services during the first three years after random assignment. For example, about 88 percent of control group members in Grand Rapids and 86 percent in Columbus worked at some point. Except for Riverside (66 percent), the Oklahoma City control group was the least likely to work: about 79 percent of control group members worked at some point. The fact that so many control group members worked left little room for the programs to increase the number of people who ever worked during the follow-up period. In fact, only three of the programs increased the number of people who worked by more than 3 percentage points. Moreover, the two programs with the largest effects were both in Riverside, where control group members were the least likely to work.

 

Table 4.1
Impacts on Employment and Earnings in Years 1 to 5

Site and Program

SampleSize ProgramGroup Control Group Difference(Impact) Percentage Change (%)
Ever employed (%)
Atlanta Labor Force Attachment 2,938 83.0 80.3 2.8 ** 3.4
Atlanta Human Capital Development 2,992 81.2 80.3 1.0 1.2
Grand Rapids Labor Force Attachment 3,012 89.8 88.3 1.5 1.7
Grand Rapids Human Capital Development 2,997 89.5 88.3 1.2 1.4
Riverside Labor Force Attachment 6,726 74.5 66.1 8.4 *** 12.7
Lacked high school diploma or basic skills 3,125 70.5 61.1 9.4 *** 15.4
Riverside Human Capital Development 3,135 66.9 61.1 5.8 *** 9.5
Columbus Integrated 4,672 87.9 86.0 1.9 ** 2.2
Columbus Traditional 4,729 87.0 86.0 1.0 1.2
Detroit 4,459 85.5 83.0 2.5 ** 3.0
Oklahoma City 8,677 78.8 79.2 -0.5 -0.6
Portland 4,028 85.8 81.7 4.1 ** 5.0
Average number of quarters employed
Atlanta Labor Force Attachment 2,938 8.5 7.8 0.8 *** 9.7
Atlanta Human Capital Development 2,992 8.3 7.8 0.5 ** 6.9
Grand Rapids Labor Force Attachment 3,012 9.8 9.1 0.7 *** 8.0
Grand Rapids Human Capital Development 2,997 9.5 9.1 0.4 * 3.9
Riverside Labor Force Attachment 6,726 6.8 5.6 1.1 *** 20.3
Lacked high school diploma or basic skills 3,125 6.0 4.7 1.3 *** 26.9
Riverside Human Capital Development 3,135 5.5 4.7 0.8 *** 16.6
Columbus Integrated 4,672 10.2 9.8 0.4 ** 4.4
Columbus Traditional 4,729 10.1 9.8 0.3 * 3.1
Detroit 4,459 8.3 8.0 0.2 3.0
Oklahoma City 8,677 6.6 6.7 -0.1 -1.3
Portland 4,028 9.4 7.8 1.6 *** 21.1
Average total earnings ($)
Atlanta Labor Force Attachment 2,938 19,838 17,380 2,459 *** 14.1
Atlanta Human Capital Development 2,992 19,397 17,380 2,017 ** 11.6
Grand Rapids Labor Force Attachment 3,012 22,322 20,770 1,552 * 7.5
Grand Rapids Human Capital Development 2,997 21,616 20,770 846 4.1
Riverside Labor Force Attachment 6,726 17,438 14,889 2,549 *** 17.1
Lacked high school diploma or basic skills 3,125 13,193 10,912 2,281 *** 20.9
Riverside Human Capital Development 3,135 12,273 10,912 1,361 * 12.5
Columbus Integrated 4,672 27,621 25,566 2,055 *** 8.0
Columbus Traditional 4,729 26,977 25,566 1,410 * 5.5
Detroit 4,459 21,968 20,508 1,460 * 7.1
Oklahoma City 8,677 12,868 12,752 115 0.9
Portland 4,028 26,041 20,891 5,150 *** 24.7
SOURCE:  MDRC calculations from state and county administrative records.
NOTES:  See Appendix A.1.

In contrast to their generally small effects on whether people ever worked, the programs generally increased how long people worked and how much they earned (see the middle and lower panels of Table 4.1). In 9 of the 11 programs, the program group worked more quarters on average than the control group; moreover, a slightly different combination of nine programs increased average earnings above the control group level.

The Portland program had the largest effect by far on number of quarters employed and earnings. Whereas control group members worked 7.8 quarters on average during the 20-quarter follow-up period, program group members worked 9.4 quarters on average, for an impact of more than 1.6 quarters, or more than 20 percent.(2) The program also increased earnings by more than $5,000 over five years, from just under $21,000 on average for the control group to just over $26,000 on average for the program group. The magnitude of effects in Portland should not be understated: Among welfare-to-work programs studied using random assignment, only the Riverside GAIN effects have been as large as the effects of Portland.(3) Portland's success may be due to its strong focus on employment, its emphasis on finding good jobs, and its mixed use of services that assigned some people to job search and some to education and training. Since it is the only program studied in NEWWS that had an employment focus with a mix of activities, it is difficult to say how important a factor that was in its success. However, in previous evaluations the most effective welfare-to-work programs have generally used similar mixed approaches to determining people's initial activities.(4) Portland's unusual success may also have been bolstered by its strong economy, although other programs that were operated in areas of high employment growth and low unemployment led to smaller impacts on employment and earnings (see Table 1.2). It should also be noted that case managers in Portland were less likely than program staff in other sites to refer people with serious personal or family problems or extremely low motivation levels. These individuals did not attend a program orientation and were not included in the research sample.(5)

The LFA programs, with their requirement that most participants look for work initially, had the next largest impacts as a group. Increases in the average number of quarters of work ranged from 0.7 quarter (Grand Rapids) to 1.1 quarters (Riverside). In addition, increases in total earnings over five years above the control group average ranged from about $1,500 per LFA (Grand Rapids) to about $2,500 (Atlanta and Riverside).

The education-focused programs led to smaller impacts on cumulative measures of employment and earnings. Columbus Integrated and Atlanta HCD were the most effective at increasing total earnings above control group levels. These two programs led to five-year earnings impacts of about $2,000 per program group member, which exceeded the increase for only one of the four employment-focused programs: Grand Rapids LFA. Every other education-focused program led to earnings gains of less than $1,500 over five years (or $300 per year)  a historically small increase. Moreover, the program-control group difference in total earnings was not statistically significant in Grand Rapids and Oklahoma City.

As shown in Table 4.1, the Oklahoma City program was the least effective among the 11 programs in the NEWWS Evaluation, probably reflecting the de facto voluntary nature of the program. During much of the follow-up period, the Oklahoma City program was hampered by large caseloads and limited resources. The program placed a priority on working with enrollees who expressed the greatest interest in participating. In addition, its integrated case management program staff spent most of their time performing financial functions (such as helping enrollees to find child care) and devoted little time to monitoring participation in employment-related activities. Detroit, which faced similar problems, also ran a de facto voluntary program for much of the period. Detroit did not significantly raise employment, although it did increase earnings of program group members by more than $1,400 over five years relative to the control group.(6)