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

12/01/2001

Welfare department costs consisted of program operating costs and the costs of support services that sample members received to enable their participation in employment and employment-related activities.

1. Operating costs. The welfare departments paid for the day-to-day operation of the NEWWS programs, including expenditures for employment-related case management services, overhead, program orientation, and other activities. These expenditures cover services provided directly by welfare department staff as well as services provided by other agencies under contract to the welfare departments. Welfare department staff directly provided case management (following up on recipients who failed to attend scheduled appointments, providing employability planning, and referring and monitoring individuals assigned to activities). In some sites, assessments, job search assistance, and job development services were provided by welfare department staff, but in others these activities were provided by contracted outside agencies. Costs incurred by the welfare department to accommodate NEWWS research requirements and requests were excluded from the analysis.

Table 13.2 shows the unit costs (in 1999 dollars)  that is, estimates of the average cost of providing specified services to one person for a month  used in the cost analysis. Differences in unit measures make it difficult to compare all unit costs across all programs, but it is clear from those with common units that costs varied widely across programs. These differences reflect a number of factors: differences in local markets, the types of employment-related services that participants selected or were steered toward, and the decisions that administrators made in implementing their programs. For example, some programs referred sample members to community providers for basic education services, but did not provide any additional funding to these generally publicly funded programs. However, the welfare departments in Riverside, Detroit, and Portland paid for services provided to sample members through formal contracts with education providers. As a result, welfare department unit costs for basic education (column 1) are higher in these three sites than in the others.(4) Non-welfare agency unit costs for basic education (column 3) were much higher for the Portland program than for the other programs, because community colleges were the largest provider of basic education services in Portland, whereas public adult education systems were the main providers of basic education in the other sites.

Table 13.2
R Estimated Unit Costs for Employment-Related Activities (in 1999 dollars)
Program and Activity Program Group Control Group
Welfare Department Unit Cost Non-Welfare Agency Unit Cost Non-Welfare Agency Unit Cost
Average per Month of Participation ($) Average per Session ($) Average per Hour ($) Average per Month of Participation ($) Average per Hour ($)

Atlanta Labor Force Attachment

Orientation and appraisal n/a 72 n/a n/a n/a
Formal assessment n/a n/a n/a n/a n/a
Job search 416 n/a n/a 61 n/a
Basic education 115 n/a 3.18 n/a 3.20
Post-secondary education 73 n/a 9.03 n/a 8.44
Vocational training 153 n/a 7.31 n/a 6.88
Work experience 167 n/a n/a 185 n/a

Atlanta Human Capital Development

Orientation and appraisal n/a 72 n/a n/a n/a
Formal assessment n/a n/a n/a n/a n/a
Job search 463 n/a n/a 60.80 n/a
Basic education 99 n/a 3.09 n/a 3.20
Post-secondary education 94 n/a 8.07 n/a 8.44
Vocational training 140 n/a 7.25 n/a 6.88
Work experience 203 n/a n/a 185 n/a

Grand Rapids Labor Force Attachment

Orientation and appraisal n/a 18 n/a n/a n/a
Formal assessment 395 n/a n/a n/a n/a
Job search a 259 n/a n/a n/a n/a
Basic education 132 n/a 6.37 n/a 6.38
Post-secondary education 97 n/a 9.31 n/a 9.37
Vocational training 110 n/a 7.82 n/a 7.97
Work experience 241 n/a n/a 241 n/a

Grand Rapids Human Capital Development

Orientation and appraisal n/a 18 n/a n/a n/a
Formal assessment 395 n/a n/a n/a n/a
Job searcha 259 n/a n/a n/a n/a
Basic education 132 n/a 6.31 n/a 6.38
Post-secondary education 97 n/a 9.15 n/a 9.37
Vocational training 110 n/a 7.23 n/a 7.97
Work experience 241 n/a n/a 241 n/a

Riverside Labor Force Attachment

Orientation and appraisal n/a 88 n/a n/a n/a
Formal assessment n/a 596 n/a n/a n/a
Job search 759 n/a n/a 254 n/a
Basic education 255 n/a 4.45 n/a 4.09
Post-secondary education 122 n/a 6.37 n/a 6.39
Vocational training 122 n/a 5.52 n/a 5.90
Work experience 572 n/a n/a 572 n/a

Riverside Human Capital Development(without a high school diploma or GED)

Orientation and appraisal n/a 88 n/a n/a n/a
Formal assessment n/a 596 n/a n/a n/a
Job search 759 n/a n/a 254 n/a
Basic education 255 n/a 4.05 n/a 4.09
Post-secondary education 122 n/a 6.29 n/a 6.39
Vocational training 122 n/a 5.31 n/a 5.90
Work experience 572 n/a n/a 572 n/a

Columbus Integrated

Orientation and appraisal 19 n/a n/a n/a n/a
Formal assessment n/a n/a n/a n/a n/a
Job search 220 n/a n/a 100 n/a
Basic education 86 n/a 3.82 n/a n/a
Post-secondary education 225 n/a 6.16 n/a n/a
Vocational trainingb 225 n/a n/a n/a n/a
Work experience 106 n/a n/a 76 n/a
Columbus Traditional
Orientation and appraisal 14 n/a n/a n/a n/a
Formal assessment n/a n/a n/a n/a n/a
Job search 205 n/a n/a 100 n/a
Basic education 54 n/a 3.99 n/a n/a
Post-secondary education 55 n/a 6.16 n/a n/a
Vocational trainingb 55 n/a n/a n/a n/a
Work experience 46 n/a n/a 76 n/a

Detroitc

Orientation and appraisal n/a n/a n/a n/a n/a
Formal assessment n/a n/a n/a n/a n/a
Job searchd 752 n/a n/a 597 n/a
Education and traininge 587 n/a 8.44 n/a 8.21
Work experience 557 n/a n/a n/a n/a

Portland

Orientation and appraisal 138 n/a n/a n/a n/a
Formal assessment n/a n/a n/a n/a n/a
Job search 359 n/a n/a 280 n/a
Basic education 257 n/a 11.75 n/a 11.75
Post-secondary education 131 n/a 7.82 n/a 8.01
Vocational training 131 n/a 7.82 n/a 8.01
Work experience 400 n/a n/a 322 n/a
SOURCES:  MDRC calculations based on fiscal and participation data from the following: Atlanta - the Fulton County Department of Family and Children Services, the Georgia Department of Human Resources, the Georgia Department of Technical and Adult Education, the Board of Regents University System of Georgia; Grand Rapids - the Michigan Department of Social Services, the Michigan Department of Education Office of Extended Learning Services, the Grand Rapids Community College, the Wyoming Community Education Center; Riverside - the California Department of Social Services, the California Department of Education, the Chancellors Office of California Community Colleges; Columbus - the Franklin County Department of Human Services, the Ohio Department of Education, the Office of Vocational and Adult Education, the Ohio Board of Regents, the National Center for Education Statistics; Detroit - the Michigan Family Independence Agency, the Michigan Department of Education, the Michigan Jobs Commission; Portland - the Oregon Department of Human Resources, Adult and Family Services Division, the Oregon Office of Community College Services; in all sites - information collected on tuition charged at proprietary schools attended by sample members, from MDRC-collected JOBS case file data, the MDRC Two-Year Client Survey, and the MDRC Five-Year Client Survey.
NOTES:  Welfare department unit costs include the cost of providing activities (e.g., classroom instruction, job search facilitation, space rental, and case management expenditures).
Work experience unit costs for program and control group members receiving services from non-welfare agencies were assumed to be equal to the welfare department JOBS unit cost. Atlantas unit cost for controls was the average of the LFA and HCD welfare department unit costs.
N/a = not applicable.
a The estimated unit cost of job search to Grand Rapids non-welfare agencies was $1,025 per participant.
b The estimated unit cost of vocational training for non-welfare agencies in Columbus was $5,032 per participant in the Integrated program and $2,771 per participant in the Traditional program.
c For the Detroit program, welfare department unit costs were calculated by dividing total activity expenditures by the total number of participant-months for the corresponding activity. At the time of the two-year follow-up, Farrell, 2000, presented a range of unit costs, based on two different methods of calculating participant-months. However, both the two- and five-year gross cost estimates were based only on the upper-bound unit cost estimates, and so only "upper-bound" estimates of unit costs are presented on this table. See Farrell, 2000, for a complete discussion of this issue and the full range of two-year cost and participation estimates for this site.
d The estimated unit cost of job search to Detroit non-welfare agencies was $816 per month of participation. In addition, the estimated unit cost to the welfare department for control group participation in job search, education and training, and work experience activities was $271 per month of participation.
e Owing to data limitations, in Detroit it was not possible to separate vocational training, post-secondary education, and basic education costs. Thus, the gross costs of all three activities are included in the cost of "education and training." Furthermore, in this site orientation and assessment costs are spread across these three activities.

The unit cost multiplied by sample members' average number of months of participation in the activity (the behavioral variable) yields the cost per sample member. These costs are shown in Table 13.3 (column 1). In-program welfare department operating costs ranged from $603 (Columbus Traditional) to $2,753 (Riverside HCD) and were not systematically different between employment- and education-focused programs.

Table 13.3
Estimated Cost per Program Group Member for Employment-Related Services
Within a Five-Year Follow-Up Period,
by Program, Service Component, and Agency (in 1999 dollars)
Activity or Service In-Program Cost Out-of-Program Cost Total Gross Cost per Program Group
Welfare Department Cost ($) Non-Welfare Agency Cost ($) Total Program Cost ($) Welfare Department Cost ($) Non-Welfare Agency Cost ($)

Atlanta Labor Force Attachment

Orientation and appraisal 72 0 72 0 0 72
Formal assessment n/a n/a n/a n/a n/a n/a
Job search 1,081 0 1,081 0 23 1,104
Basic education 210 453 663 0 166 829
Post-secondary education 62 632 694 0 177 871
Vocational training 265 1,166 1,431 0 641 2,072
Work experience 256 n/a 256 0 67 323
Subtotal (operating) 1,946 2,251 4,198 0 1,074 5,271
Child care 1,191 0 1,191 301 0 1,491
Other support services 317 0 317 0 0 317
Total 3,454 2,251 5,705 301 1,074 7,080

Atlanta Human Capital Development

Orientation and appraisal 72 0 72 0 0 72
Formal assessment n/a n/a n/a n/a n/a n/a
Job search 503 0 503 0 28 530
Basic education 430 1,004 1,434 0 161 1,596
Post-secondary education 58 425 483 0 415 898
Vocational training 429 2,185 2,614 0 605 3,219
Work experience 216 0 216 0 45 261
Subtotal (operating) 1,708 3,614 5,323 0 1,253 6,576
Child care 1,148 0 1,148 251 0 1,400
Other support services 610 0 610 0 0 610
Total 3,466 3,614 7,080 251 1,253 8,585

Grand Rapids Labor Force Attachment

Orientation and appraisal 18 n/a 18 0 0 18
Formal assessment 9 n/a 9 0 0 9
Job search 362 908 1,270 0 152 1,422
Basic education 166 719 884 0 484 1,368
Post-secondary education 263 1,710 1,974 0 1,340 3,314
Vocational training 152 1,033 1,186 0 618 1,804
Work experience 130 0 130 0 53 183
Subtotal (operating) 1,100 4,371 5,470 0 2,648 8,118
Child care 451 0 451 312 0 762
Other support services 60 0 60 0 0 60
Total 1,610 4,371 5,981 312 2,648 8,940

Grand Rapids Human Capital Development

Orientation and appraisal 18 0 18 0 0 18
Formal assessment 312 0 312 0 0 312
Job search 206 432 638 0 116 754
Basic education 474 1,672 2,146 0 443 2,589
Post-secondary education 302 2,285 2,586 0 995 3,582
Vocational training 163 900 1,062 0 956 2,018
Work experience 131 0 131 0 139 271
Subtotal (operating) 1,607 5,288 6,895 0 2,649 9,544
Child care 606 0 606 502 0 1,108
Other support services 75 0 75 0 0 75
Total 2,288 5,288 7,576 502 2,649 10,727

Riverside Labor Force Attachment

Orientation and appraisal 111 0 111 0 0 111
Formal assessment 6 0 6 0 0 6
Job search 1,056 0 1,056 0 145 1,202
Basic education 157 345 502 0 226 728
Post-secondary education 218 988 1,205 0 984 2,189
Vocational training 97 392 489 0 586 1,075
Work experience 147 0 147 0 134 281
Subtotal (operating) 1,793 1,725 3,518 0 2,075 5,593
Child care 252 0 252 29 0 281
Other support services 171 0 171 0 0 171
Total 2,217 1,725 3,941 29 2,075 6,045

Riverside Human Capital Development
(without a high school diploma or GED)

Orientation and appraisal 107 0 107 0 0 107
Formal assessment 13 0 13 0 0 13
Job search 1,008 0 1,008 0 169 1,177
Basic education 1,188 1,420 2,608 0 291 2,900
Post-secondary education 89 209 298 0 282 580
Vocational training 179 688 867 0 182 1,049
Work experience 169 0 169 0 92 261
Subtotal (operating) 2,753 2,318 5,071 0 1,015 6,086
Child care 361 0 361 16 0 376
Other support services 170 0 170 0 0 170
Total 3,284 2,318 5,601 16 1,015 6,632

Columbus Integrated

Orientation and appraisal 18 0 18 0 0 18
Formal assessment n/a n/a n/a n/a n/a n/a
Job search 141 0 141 0 15 156
Basic education 108 259 367 0 334 700
Post-secondary education 732 1,241 1,973 0 887 2,860
Vocational training 206 542 749 0 534 1,283
Work experience 85 0 85 0 170 254
Subtotal (operating) 1,290 2,042 3,331 0 1,939 5,271
Child care 571 0 571 558 0 1,129
Other support services 334 0 334 0 0 334
Total 2,195 2,042 4,237 558 1,939 6,734
Columbus Traditional
Orientation and appraisal 9 0 9 0 0 9
Formal assessment n/a n/a n/a n/a n/a n/a
Job search 192 0 192 0 0 192
Basic education 84 494 577 0 218 796
Post-secondary education 194 1,870 2,064 0 556 2,620
Vocational training 59 270 329 0 830 1,158
Work experience 66 0 66 0 127 194
Subtotal (operating) 603 2,634 3,237 0 1,731 4,969
Child care 584 0 584 547 0 1,131
Other support services 224 0 224 0 0 224
Total 1,411 2,634 4,045 547 1,731 6,323

Detroit

Job search 114 446 560 0 5 565
Education and traininga 1,198 1,403 2,602 0 1,879 4,481
Work experience 77 0 77 0 3 80
Subtotal (operating) 1,389 1,849 3,238 0 1,887 5,126
Child care 313 0 313 435 0 748
Other support services 117 0 117 0 0 117
Total 1,819 1,849 3,668 435 1,887 5,990

Portland

Orientation and appraisal 138 11 149 0 0 149
Formal assessment n/a n/a   n/a n/a
Job search 609 14 623 0 131 754
Basic education 361 12 373 0 624 997
Post-secondary education 127 709 836 0 755 1,591
Vocational training 182 928 1,110 0 831 1,941
Work experience 286 6 292 0 122 414
Subtotal (operating) 1,702 1,680 3,382 0 2,464 5,846
Child care 1,043 0 1,043 1,883 0 2,926
Other support services 158 0 158 0 0 159
Total 2,903 1,680 4,583 1,883 2,464 8,930
SOURCES:  MDRC calculations based on fiscal and participation data from the following: Atlanta - the Fulton County Department of Family and Children Services, the Georgia Department of Human Resources, the Georgia Department of Technical and Adult Education, the Board of Regents University System of Georgia; Grand Rapids - the Michigan Department of Social Services, the Michigan Department of Education Office of Extended Learning Services, the Grand Rapids Community College, the Wyoming Community Education Center; Riverside - the California Department of Social Services, the California Department of Education, the Chancellors Office of California Community Colleges; Columbus - the Franklin County Department of Human Services, the Ohio Department of Education, the Office of Vocational and Adult Education, the Ohio Board of Regents, the National Center for Education Statistics; Detroit - the Michigan Family Independence Agency, the Michigan Department of Education, the Michigan Jobs Commission; Portland - the Oregon Department of Human Resources, Adult and Family Services Division, the Oregon Office of Community College Services; in all sites - information collected on tuition charged at proprietary schools attended by sample members, from MDRC-collected JOBS case file data, the MDRC Two-Year Client Survey, and the MDRC Five-Year Client Survey. MDRC child care and other support service calculations from Fulton County, Kent County, Riverside County, Ohio Department of Human Services, Wayne County, Washington County, and Multnomah County (District 2) payment data. Other support service data from county records.
NOTES:  Rounding may cause slight discrepancies in calculating sums and differences.
N/a = not applicable.
a Owing to data limitations, in Detroit it was not possible to separate vocational training, post-secondary education, and basic education costs. Thus, the gross costs of all three activities are included in the cost of "education and training." Furthermore, in this site orientation and assessment costs are spread across these three activities.

2. Support service costs. Programs paid for child care, transportation, and ancillary services (such as uniforms, tools, equipment, and books) to support recipients' participation in employment and employment-related activities. Detailed information on support service payments was available through the end year 2 of follow-up. These data, together with data from the Five-Year Client Survey, were used to estimate payments for the remainder of the follow-up period.

As shown in Table 13.3, the welfare departments spent an average of $252 (Riverside LFA) to more than $1,000 (Atlanta LFA and HCD and Portland) per program group member on in-program child care. The costs of other support services, which included payments to cover transportation costs, class fees, uniforms, and so on, ranged from less than $100 (Grand Rapids LFA and HCD) to $610 (Atlanta HCD).