Moving People from Welfare to Work. Lessons from the National Evaluation of Welfare-to-Work Strategies.. Income: How can welfare-to-work programs increase family resources?

07/01/2002

The administrators of all the welfare-to-work programs studied in NEWWS hoped that their programs' preemployment services, mandates, and messages would enable welfare recipients eventually to increase their income and move out of poverty, but their relative emphasis on and methods of achieving this goal differed. The education-focused programs emphasized this goal most explicitly -- by providing education and training activities, which were seen as a gateway to high-paying, stable employment. The Portland program emphasized this goal in another way -- by encouraging welfare recipients participating in job search to accept only jobs that paid above the minimum wage and offered opportunity for advancement. Notably, however, none of the NEWWS programs provided earnings supplements to low-wage workers, as many states now do, in the form of substantial earned income disregards or work incentive payments provided outside the welfare system. (All the program and control groups in NEWWS were eligible for the federal EIC.) As a result, the NEWWS results can draw attention to gaps that the new policies might fill.

  • Several factors explain why the NEWWS programs increased income so little.

First, although almost all the programs studied in NEWWS increased earnings, their impacts were relatively modest in size owing to the only modest increases in five-year job finding, the small improvement in employment stability, and the small increases in wages (Box 2). Second, there was little increase in the extent to which people worked while on welfare. Third, some program group members did not return to welfare even after they lost their jobs. Finally, some program group members failed to maintain their eligibility for food stamps after they left welfare, the reasons for which are unclear.

  • The NEWWS findings underscore the value of efforts to add services and incentives aimed at increasing employment retention and advancement and encouraging low-income families to continue receiving benefits for which they are eligible.

During the 1990s, especially after passage of federal welfare reform in 1996, welfare administrators adopted a variety of services and financial incentives that were specifically intended to boost welfare recipients' incomes. These included raising the level of earned income disregards, extending child care benefits and medical coverage for welfare recipients who find employment, providing financial incentives to welfare recipients who work, and offering job search assistance to people who leave welfare for employment but then lose their jobs. During this period, the federal government joined in this effort by substantially increasing the value of the EIC. Although policy researchers have only begun to investigate the effects of recent policy changes such as these, the NEWWS findings underscore the need for such innovations.