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

12/01/2001

The programs pursued three different strategies to attain the goals of increased employment and earnings: job search first, education and training first, and a mix of job search and education as initial activities.

Employment-focused, job-search-first programs (Atlanta, Grand Rapids, and Riverside LFA are examples of this approach) encourage rapid entry into the labor market and are therefore expected to boost employment and earnings quickly. Proponents of this approach expect people to work their way up to better jobs by gaining experience and skills on the job. If this occurs, then initial employment gains may persist or increase over time, and earnings increases may grow larger in later years. On the other hand, effects of job-search-first programs may grow smaller over time, as control group members begin finding work on their own or if program group members work at low-quality and unstable jobs that they quickly lose.

Education-focused programs (they include Atlanta, Grand Rapids, and Riverside HCD; Columbus Integrated and Traditional; Detroit; and Oklahoma City) aim to increase enrollees' skills and credentials before they seek employment. Employment and earnings gains may be delayed while recipients participate in education and training activities. Education-focused programs may even reduce employment and earnings initially if people would work in the absence of the programs, but enroll in education and training activities instead. For these reasons, effects are likely to be smaller for the education-focused programs than for job-search-first programs in the short term. Toward the end of follow-up, however, the effects of education-focused programs may catch up to or surpass the effects of job-search-first programs, if program group members make up for initial forgone earnings by obtaining higher-quality jobs than they would have under the job-search-first programs. Employment and earnings gains may never occur, however, if enrollees drop out of education and training activities or if area employers have little demand for the skills and credentials that enrollees obtain.

Employment-focused programs that use a mix of initial activities (Portland used this approach) try to combine the best features of the job-search-first and education-focused approaches. For more job-ready individuals, they use the same approach as other employment-focused programs by trying to move people into jobs relatively quickly. Case managers, however, have more discretion to assign some people to short-term skill-building activities first. If this strategy is successful, boosts in employment should occur early in the follow-up, as people required to look for work find jobs. Initial gains may be smaller than they would be for job-search-first programs, however, because some enrollees participate in education or training activities before looking for work. These programs could achieve especially large gains in employment and earnings later in the follow-up by moving a large portion of the caseload into higher-quality jobs. Specifically, more job-ready participants (who are asked to look for work) may be able to advance to better jobs, and less job-ready individuals (who are allowed to enroll in education and training activities) may be able to use their new skills to find better jobs than they would have found if they had looked for work initially. If neither element of the employment-focused, varied first activity approach is effective, however, or if activities are targeted at the wrong people, effects on employment and earnings may be small and should not increase.

This discussion assumes that welfare-to-work programs affect employment and earnings by providing helpful services. It is also possible, however, that sanctions used to enforce the mandates encourage people to go to work in order to avoid participating in program activities. If this is true, then highly mandatory programs may have similar effects initially regardless of their self-sufficiency approach. If education-focused programs have smaller effects than employment-focused programs, it may indicate that services are responsible for the program impacts rather than enforcement of the mandates.