Moving People from Welfare to Work. Lessons from the National Evaluation of Welfare-to-Work Strategies.. 7. Costs and Benefits

07/01/2002

FSA pushed administrators to operate more complex welfare-to-work programs, involve a larger share of the caseload (including the most disadvantaged), and provide more intensive and expanded services -- changes that were likely to increase the costs of the programs relative to those of programs operated in the early to mid-1980s. The legislators' hope was that the higher upfront costs would bring larger long-run benefits, but it was unclear whether the programs' benefits would surpass their costs or whether the benefit-cost trade-off would be the same for all types of program approaches or for all subgroups of welfare recipients.

Under PRWORA, the relationship between costs and benefits remains a concern. A program's cost per person largely determines how many people it can serve. With fixed resources, each state is seeking to maintain the optimal balance between involving as many people as possible in the programs and delivering appropriate, effective services. The extensive analyses conducted as part of NEWWS help reveal the parameters around these program design decisions.