As discussed earlier, employment-focused programs were expected to boost employment and earnings immediately, and effects of education-focused programs were expected to occur more slowly, after enrollees completed their education and training activities. Table 4.1 shows that the cumulative impacts of education-focused programs fell short of the impacts of most employment-focused programs. It is possible, however, that the skills obtained through education and training helped program members find such good jobs that the impacts of the education-focused programs were continuing to grow at the end of the five-year follow-up period relative to the impacts of the employment-focused programs. If this pattern did occur, education-focused programs might have larger impacts than employment-focused programs after year 5 and larger cumulative gains over a longer follow-up period. Figure 4.1 and Appendix Table C.1 show, for each of the 11 programs for the five years of follow-up, the proportion of program and control group members who worked for pay.(7) In addition, the figure and table can be used to examine separately the period when all control group members were embargoed from receiving control group services and the later period. As discussed in Chapter 1, control group members could not receive program services in any of the sites during the first three years after random assignment. In Riverside and Portland, control group members in the report sample were embargoed from receiving services for all five years. It is important to keep in mind, however, that most evidence indicates that ending the embargo is unlikely to have changed the effects of most programs on employment and earnings very much (as discussed at the end of this chapter).
Impacts on Emloyment in Year 1 to 5
SOURCE: MDRC calculations from state and county administrative records.
NOTES: See Appendix A.1.
The two Atlanta programs exemplify the basic differences in the effects of employment-focused and education-focused programs.(8) In the LFA program, the attempt to move people into jobs quickly produced an immediate payoff. During the first year after random assignment, about 49 percent of the program group worked compared with 44 percent of the control group, a 5 percentage point difference that was statistically significant. In contrast, the HCD program did not significantly increase employment in the first year, as was expected from the fact that many program group members were enrolled in education and training. However, the effects of the HCD program increased after year 1, and both the LFA and the HCD programs had similar effects on employment in years 2 and 3.
If education-focused programs are to "make up" the ground lost to employment-focused programs in the first year, then they must eventually have larger effects than the employment-focused programs. Figure 4.1 shows that, in fact, the Atlanta LFA program continued to significantly increase employment in year 4, but the HCD program did not. In year 5, neither program significantly affected employment. This finding suggests that it is unlikely that the HCD program will eventually catch up to or surpass the LFA program with longer follow-up.
The other employment-focused programs led to even larger impacts on percentage employed in year 1. Riverside LFA, arguably the most strongly employment-focused program in the evaluation, produced the largest initial increase in employment. (See Appendix Table C.1.) In Riverside, about 51 percent of LFAs worked for pay some time during year 1 compared with 34 percent of the control group. Impacts of the Grand Rapids LFA and Portland programs averaged about 10 percentage points above the control group level in year 1.
As discussed above, the positive effects of employment-focused programs may persist or grow larger over time. This pattern did not occur for the LFA programs in Grand Rapids and Riverside, however. For both programs, impacts on employment declined after year 1, although for different reasons. In Grand Rapids, LFA employment levels increased between years 1 and 2 and again between years 2 and 3, but control group employment levels increased even faster. This result suggests that the Grand Rapids LFA program succeeded initially by encouraging people who would have worked eventually to take jobs faster. In contrast, Riverside LFA employment levels diminished sharply between years 1 and 2, suggesting that a number of LFAs were encouraged to find work by the program but left employment quickly and had trouble finding another job. These differences are also consistent with the fact that Riverside had a fairly weak economy during the early part of the follow-up period.
Most other education-focused programs had small effects initially. Only two of the seven education-focused programs Grand Rapids HCD and Riverside HCD led to significant impacts on employment in year 1. For all of the education-focused programs except Oklahoma City (where impacts were statistically insignificant in each year), impacts were somewhat larger in year 2 or 3 than in year 1. Disappointingly, the effects of most education-focused programs declined after year 3. For all education-focused programs except Riverside HCD, employment levels were not significantly higher for program group members than for control group members in year 5. (Section V of this chapter presents further evidence that the end of the control group embargo is not responsible for declining impacts in most programs in years 4 and 5.)
Results in Grand Rapids and Riverside confirm that, as in Atlanta, it is unlikely that education-focused programs would surpass employment-focused programs with longer follow-up. In Grand Rapids, neither the LFA or HCD program increased employment levels above the control group levels in years 4 and 5, while in Riverside, the LFAs in need of basic education had slightly larger employment impacts than the HCDs.
The Portland program led to the most successful year-by-year pattern of employment impacts: It immediately increased employment (like the LFA programs) but continued to increase employment after year 1 (like the HCD programs). In fact, the year 3 impact on percentage employed (of 12 percentage points) was more than twice as large in Portland as any other program. Like both types of programs, its effects declined after year 3; however, the Portland program again led to relatively large effects (of 8 percentage points) and was one of only three programs to still have a positive effect on employment in year 5. This pattern suggests that Portland combined the best features of employment-focused and education-focused programs, assigning job-ready individuals to job search but allowing others to get short-term education or training initially.
Nonetheless, the decline in employment impacts for all programs after year 3 underscores the limitations of both employment- and education-focused welfare-to-work strategies that rely primarily on pre-employment services and mandates. More recently, policymakers and program administrators have attempted to strengthen the effects of welfare-to-work programs by adding a variety of post-employment services and financial incentives aimed at helping people stay employed and advance to better jobs. It remains to be seen whether such strategies accomplish these goals.