The data used in this report come from several programs that have been evaluated by MDRC. Each of the programs was evaluated using a random assignment design, in which ongoing recipients or new applicants to welfare were assigned to either an experimental group that received the new treatment or a control group that was subject to the existing welfare system in the state at the time of the evaluation. New applicants for welfare were randomly assigned at the time they were applying for welfare, whereas ongoing recipients were randomly assigned at their redetermination interviews.1
Each evaluation provides three data sources. First, demographic data—including age, race, and education level—were collected for all sample members at the point of random assignment, or baseline. Second, state administrative records data provide information on quarterly earnings, monthly welfare receipt, and monthly Food Stamp receipt. The earnings data come from each state’s Unemployment Insurance (UI) system, to which most employers must report employee earnings. The welfare and Food Stamp data come from each state’s welfare records. One limitation of these data is that they do not capture earnings or benefit receipt for recipients who have moved out of state. Third, each evaluation administered a survey to a subset of the sample about two to three years after random assignment. The surveys capture employment and earnings not reported to the UI system, and they also provide more detailed information on family well-being, including household composition, income, income sources, material hardship, and barriers to employment.
Data from the following programs are used in the report:
Vermont’s Welfare Restructuring Project (WRP). Vermont’s Welfare Restructur-ing Project was one of the first statewide welfare reform programs initiated under waivers of federal welfare rules. WRP was implemented in July 1994 and ran through June 2001. The program consisted of a 30-month work trigger that required most single parents to work once they had received welfare for 30 cumulative months. The program also included financial incentives in the form of an enhanced disregard that was somewhat more generous than under Vermont’s old AFDC program. A three-group research design, in which some individuals received only the enhanced incentives without the work trigger, was included as part of the evaluation to compare the effects of incentives alone with the effects of incentives combined with the work trigger. The evaluation sample includes over 12,000 people from six of Vermont’s 12 welfare districts, who were randomly assigned from 1994 to 1996. Administrative data are available from 1992 to 1998, and a survey administered three and a half years after random assignment is available for a subset of the sample.
The full WRP program produced modest increases in employment during the follow-up period prior to the work trigger and had little effect on rates of welfare receipt. The WRP Incentives Only program had little impact on employment rates and modestly increased welfare receipt. An increase in welfare receipt is somewhat expected from an incentives program, since incentives allow recipients to remain eligible for benefits at a higher level of earnings. See Bloom, Michalopoulos, Walter, and Auspos (1998) for details on WRP’s interim effects.
The Minnesota Family Investment Program (MFIP). MFIP tested the effects of astrategy that combined financial incentives to work—in the form of enhanced earnings disregards relative to the AFDC system - and mandated participation in work-focused activities. MFIP also sought to simplify the calculation and receipt of benefits: Recipients in the MFIP group had their Food Stamp benefits “cashed-out,” meaning that they received them as part of their MFIP check. The sample consists of over 13,000 families randomly assigned between 1994 and 1996, for whom administrative records data are available from 1993 to 1998. A subset of the sample was given a survey three years after they entered the program.
The full MFIP program led to fairly large increases in employment for long-term recipients and more modest increases for recent applicants. The program also increased welfare receipt because of its more generous disregards. As a result of higher employment and welfare benefits, people in the program group had higher incomes than their control group counterparts. The MFIP Incentives Only program, in contrast, modestly increased employment rates and led to somewhat larger increases in welfare receipt. See Knox, Miller, and Gennetian (2000) for a summary of MFIP’s effects.
The National Evaluation of Welfare-to-Work Strategies (NEWWS). NEWWS was a test of Job Opportunities and Basic Skills (JOBS) programs across seven sites in six states. The evaluation provided a test of employment-focused services, in which recipients were placed in employment-related activities and encouraged to find jobs relatively quickly, and education-focused services, which had a greater focus on skill-building prior to entering the workforce. The sample for NEWWS consists of over 44,000 single-parent families randomly assigned between 1991 and 1994, for whom administrative records data are available from 1989 through 1997, although this varies somewhat across sites. This report uses data from a survey given to a subset of the sample two years after they entered the evaluation.
Most of the NEWWS employment-focused programs increased employment, and some had larger effects than others. Portland, Oregon, for example, produced the largest employment impacts among the NEWWS programs. Most programs also reduced welfare receipt, and the size of the welfare impacts tended to mirror the size of the employment and earnings impacts. The education-focused programs generally had smaller impacts on employment than the employment-focused programs, with two sites (Oklahoma and Detroit) showing very small or no impacts. Although the programs increased employment and earnings, they did not increase incomes, since for most recipients the increase in earnings was offset by a reduction in benefits. See Hamilton (2002) for more information on the effects of NEWWS programs.
Florida’s Family Transition Program (FTP). FTP tested the effects of 24- and 36-month time limits on welfare receipt for a sample of 2,800 single-parent families in Escambia County, Florida. The program, which started in 1994, offered financial incentives as well as enhanced services designed to help recipients find jobs. Administrative records data are available for each sample member from 1992 through 1999. A subset of the sample was given a survey four years after program entry. Families were randomly assigned into the program between 1994 and 1995.
FTP increased employment and reduced welfare receipt, and the majority of those in the program group left welfare before reaching their time limit. Most of the recipients who did reach a time limit were not given extensions: About 40 percent had adequate earnings levels that did not warrant an extension, while most of the rest were deemed noncompliant. The leavers whose benefits were cancelled because they had reached a time limit were somewhat more disadvantaged than other leavers, but they did not, on average, experience more hardship, partly because they relied more on other sources of support. See Bloom et al. (2000) for the final report on FTP’s effects.
Connecticut’s Jobs First Program. Jobs First evaluated the effects of a 21-month Connecticut’s Jobs First Program.time limit on welfare receipt in the offices of Manchester and New Haven (although the
program was run statewide). The program also included very generous financial incentives to encourage work: All of a recipient’s earnings were disregarded when calculating her grant level and Food Stamp benefits until her earnings reached the poverty line. The sample includes about 4,800 people randomly assigned in 1996 and early 1997. A subset of the full sample also responded to a 36-month survey. Administrative records data for this evaluation cover the period 1994 through 1999.
Jobs First increased employment and earnings throughout the four-year follow-up period. During the early part of follow-up—before recipients began reaching time limits - the program also increased welfare receipt and, because of the generous disregards, increased incomes. About half the recipients in the program group reached the time limit during the period, and two-thirds of them subsequently received a six-month extension. Those who left welfare because of a time limit had higher earnings than those who left earlier, most likely because of the extension policy. See Bloom et al. (2002) for more information about Jobs First.
1About 10 percent of the sample used in this report were in a two-parent family when they entered the evaluation. The results did not differ when these sample members were excluded from the analysis.