Implementation, Participation Patterns, Costs, and Two-Year Impacts of the Portland (Oregon) Welfare-to-Work Program: Executive Summary. Overview of the Findings

05/01/1998

The Portland program was run through a cooperative partnership between the welfare department and various local service providers.  Most program services were provided by the local community colleges and were of high quality.  The program was strongly employment­focused:  staff communicated that the primary program goal was to help people move into jobs, and job search was the most common activity.  However, in contrast to many employment­focused programs, participants were encouraged to look for and take "good" jobs — full­time, paying above the minimum wage, with benefits and potential for advancement.  Also, Portland’s program utilized a more mixed services strategy than is typically implemented by strongly employment­focused programs.  Staff assigned many people to short­term education, vocational training, work experience, and life skills training to improve their employability.  Some people were deferred from program participation, although the program did work with at least some people traditionally defined as the most disadvantaged portion of the caseload.  The per person cost of the program was moderate, relative to other welfare­to­work programs of the 1990s.

Follow­up of more than two years is needed to fully assess the success of a welfare­to­work program, but at the two­year mark Portland’s program produced effects (impacts) on employment, earnings, and welfare receipt that were among the largest ever found for large­scale mandatory programs.

  • The Portland program substantially increased employment and produced unusually large increases in earnings.  The program raised employment levels by 11 percentage points over two years (relative to the control group).  More than one out of every four welfare recipients who normally would not have worked in an unsubsidized job during the two­year follow­up period did so as a result of the program.  In addition, two­year earnings were increased by over $1,800 per sample member, a 35 percent increase over the control group’s earnings.  These earnings gains are the largest found in the National Evaluation of welfare­to­work Strategies and approach the largest gains found for a large­scale mandatory program (those in the Riverside, California, GAIN program of the late 1980s).
  • Unlike many programs that produce immediate impacts on employment and earnings, the Portland program increased job quality.  At the end of two years, the program increased the proportion of people working at full­time jobs by 13 percentage points and, among those employed (a nonexperimental comparison), increased average hourly pay by $0.86.  It increased the proportion of people with employer­provided health benefits by 10 percentage points.
  • The program reduced welfare expenditures by 17 percent over the two­year follow­up period.  Relative to the average total welfare payments that people in the control group received over the two years, the program reduced per person expenditures by almost $1,200.  By the end of the follow­up period, only 41 percent of program group members were receiving welfare compared to 53 percent of control group members, a decrease of 12 percentage points.
  • Portland’s impacts were widespread:  both recipients with relatively few barriers to employment and those typically considered very hard to place achieved employment and earnings gains and AFDC reductions.  Few other programs have attained such consistent impacts.  Employment, earnings, and AFDC impacts were produced for those who entered the program with a high school diploma or GED (high school equivalency certificate) and those who had neither credential, as well as for the "most disadvantaged" (sample members who entered without a high school diploma or GED, had not worked during the prior year, and had received AFDC for at least two years prior to program entry).
  • Over the two­year follow­up period, program group members’ average combined income from earnings, AFDC, and Food Stamps was not substantially higher than that of control group members.  However, more positive results at the end of the follow­up period suggest that the program group may become financially better off in the future.  Program group members’ two­year earnings gains were largely offset by losses in AFDC and Food Stamps.  Quarterly impact trends suggest that income gains may emerge in the third year of follow­up.

Portland’s program was unusually successful in moving people into jobs, increasing their earnings, and moving them off welfare.  This success occurred in a specific context:  Portland’s caseload was predominantly white, minimizing the chances of racial discrimination in the labor market; a high percentage of the caseload entered the program with a high school diploma or GED certificate; and Portland’s economy was very strong during the study period, with low unemployment and substantial job growth.