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

12/01/2001

The final subgroups discussed in this chapter are defined by race and ethnicity. Results are presented for three groups: white, African-American, and Hispanic.(8) If minority sample members are faring much worse under these programs than white sample members, it might be a signal to policymakers and administrators that something is preventing minority sample members from fully participating in or benefiting from the programs. It may mean that the services offered were not enough to overcome additional barriers to employment often faced by minority group members, such as living far from available jobs, having language barriers, and being discriminated against by employers.

Results in Table 7.4 provide little reason to be concerned. In general, impacts on earnings were larger for African-American and Hispanic sample members than for white sample members. In seven of the nine programs where comparisons between white and African-American sample members could be made (Atlanta had too few white sample members to make reliable comparisons), impacts on earnings were larger for African-American sample members. For example, the Grand Rapids LFA program increased earnings by nearly $2,400 over five years for African-American sample members, but had virtually no effect on earnings for white sample members. In all programs except Portland and Detroit, in fact, the average impact on earnings for African-American sample members exceeded the average impact for white sample members by more than $1,100 over five years.

 

Table 7.4
Impacts on Selected Measures, by Ethnicity

Site and Program

Sample Size Average Total Earnings in Years 1 to 5 ($) Average Welfare Payments in Years1 to 5 ($) Combined Income in Years1 to 5 ($)

White, non-Hispanic

Atlanta Labor Force Attachment n/a n/a n/a n/a
Atlanta Human Capital Development n/a n/a n/a n/a
Grand Rapids Labor Force Attachment 1,470 -275 -2,302*** -3,168***
Grand Rapids Human Capital Development 1,515 -394 -1,569*** -2,467**
Riverside Labor Force Attachment 3,464 1,565* -2,350*** -1,426
Lacked high school diploma or basic skills 1,245 2,158* -2,818*** -1,148
Riverside Human Capital Development 1,208 623 -2,482*** -2,430*
Columbus Integrated 2,161 1,762 -1,489*** -734
Columbus Traditional 2,204 73 -829*** -1,104
Detroit 481 2,794 -1,129 819
Oklahoma City 5,109 -241 n/a n/a
Portland 2,754 6,343*** -2,971*** 2,730*

Black, non-Hispanic

Atlanta Labor Force Attachment 2,791 2,385*** -831*** 1,180
Atlanta Human Capital Development 2,838 1,828** -718*** 998
Grand Rapids Labor Force Attachment 1,214 2,367** -2,462*** -162
Grand Rapids Human Capital Development 1,158 999 -1,472*** -445
Riverside Labor Force Attachment 1,121 3,775** -2,248*** 934
Lacked high school diploma or basic skills 501 1,743 -2,580** -1,233
Riverside Human Capital Development 510 1,576 -2,578** -1,614
Columbus Integrated 2,414 2,528** -1,528*** 8
Columbus Traditional 2,431 2,395** -1,265*** 390
Detroit 3,836 1,375 -557** 500
Oklahoma City 2,484 1,238* n/a n/a
Portland 798 -278 -1,740* -1,754

Hispanic

Atlanta Labor Force Attachment n/a n/a n/a n/a
Atlanta Human Capital Development n/a n/a n/a n/a
Grand Rapids Labor Force Attachment 244 4,973* -4,211*** -464
Grand Rapids Human Capital Development 249 6,270** -4,002*** 999
Riverside Labor Force Attachment 1,858 4,357*** -3,732*** -420
Lacked high school diploma or basic skills 1,210 3,639*** -3,669*** -981
Riverside Human Capital Development 1,240 3,018*** -3,536*** -1,682
Columbus Integrated n/a n/a n/a n/a
Columbus Traditional n/a n/a n/a n/a
Detroit n/a n/a n/a n/a
Oklahoma City 392 -546 n/a n/a
Portland n/a n/a n/a n/a
SOURCES: MDRC calculations from unemployment insurance (UI) earnings records and AFDC records.
NOTES: Impacts on earnings were significantly different across subgroups in Grand Rapids LFA and HCD, Riverside LFA and HCD, and Portland.
Impacts on AFDC benefits were significantly different across subgroups in Grand Rapids LFA and HCD.
N/a = not applicable.

Despite these differences in the impacts on earnings, the impacts on welfare benefits were fairly similar for African-American and white sample members. In the Grand Rapids LFA program, for example, the impact on welfare benefits was about $2,300 for white sample members and about $2,500 for African-American sample members. As a result, both programs in Riverside and Grand Rapids significantly reduced income for white sample members but not for African-American sample members.

In the five programs with enough Hispanic sample members to allow impacts to be reliably measured, program effects on earnings were generally larger for Hispanic sample members than for white or African-American sample members, although comparisons can be made across the three groups for only the four programs in Grand Rapids and Riverside because most of the sites had too few Hispanic sample members to provide reliable estimates of program impacts. The large earnings gains for Hispanic sample members were accompanied by large welfare reductions.

One exception to the positive results for African-American sample members was in Portland, where earnings increased by more than $6,000 for white sample members, but were little changed for African-American sample members. This result should be interpreted with a great deal of caution, however. The Portland sample used in this report contains only 101 African-American control group members, and the estimated effects for African-American sample members are consequently quite imprecise. In examining impacts through three years, Michalopoulos and Schwartz were able to use the entire Portland control group and found that the program increased earnings for African-American sample members by about $2,000 over three years.(9)

The reasons for the large discrepancy in the Portland effects are unclear. One possible explanation is that African-American control group members had higher rates of job search, employment, and earnings than white control group members, which made it relatively harder to generate employment and earnings gains for African-Americans. According to the Five-Year Client Survey, about 47 percent of African-American control group members reported receiving some sort of job search assistance after entering the study compared with about 32 percent of white control group members. Perhaps as a result of their greater efforts to look for work, African-American control group members worked more often than white control group members (9.2 quarters on average compared with 7.4 quarters) and they earned considerably more than white control group members (about $24,000 over five years compared with less than $20,000, shown in Appendix Table F.4). However, it is unclear why African-American control group members had such high rates of employment.

Perhaps because of the high rates of participation in job search by African-American control group members in Portland, the program effect on job search participation was somewhat lower for African-Americans than for whites (a 22 percentage point increase for African-Americans compared with a 30 percentage point increase for whites in the five years following random assignment). The smaller effect on job search assistance was offset somewhat by larger effects on any education and training for African-American sample members (a 24 percentage point increase for African-Americans compared with an 11 percentage point increase for whites). In addition, the program affected different types of education and training activities for the two groups, with the program's effect on vocational training concentrated among African-American sample members, its effect on basic education concentrated among white sample members, and its effect on post-secondary education about the same for white and African-American sample members. It is important to note that the program increased both job search assistance and education and training for both white and African-American sample members, so these results do not imply that lack of job search assistance or undue reliance on education were the cause of the low earnings gains for African-Americans.