National Evaluation of the Welfare-to-Work Grants Program: Final Report. Labor Market Outcomes Two Years after Program Entry

09/01/2004

Most WtW enrollees found jobs during the first year following program entry. However, they were less likely to be employed during the second year, and the jobs they held at the end of that year tended to pay low wages and offer few fringe benefits.

Most individuals who enrolled in WtW subsequently obtained jobs, but their employment tended to be unstable. Only 5 to 25 percent of WtW enrollees in the non-JHU study sites were employed when they entered WtW. In contrast, much larger proportions  between 60 and 80 percent  were employed sometime during the year following program entry. Most WtW enrollees experienced some degree of success in the labor market, but had trouble sustaining it. Their rates of employment sometime during the second post-entry year were lower than during the first by about 10 percentage points. Furthermore, only about 40 percent of enrollees were working for pay at the end of the second year, an employment rate similar to that of adults nationwide who have left TANF.

Employment outcomes varied by program model, but the differences are not indicative of the relative efficacy of the models. Employment rates two years after program entry were highest in the two JHU sites, which followed a post-employment model, and lowest in the Milwaukee site, which followed a rehabilitative model. These outcomes are reflective of the distinctive populations that were served by these programs; the JHU program targeted persons who were already employed and the Milwaukee program targeted ex-offenders. Among the eight other study sites, enrollee employment rates two years after program entry were a few percentage points higher, on average, in those that followed a pre-employment model rather than an employment model. However, this difference does not imply that a pre-employment model is more effective because a similar employment gap existed among enrollees at program entry.

Enrollees who were employed worked a lot of hours but received low wages and few fringe benefits. Across the study sites, enrollees who were employed two years after entering WtW were working an average of 32 to 38 hours per week on their principal job in a typical week. However, they were not necessarily employed consistently week after week over the course of a month. Their hourly wage rate tended to be low, averaging about $10 in three study sites, about $8 in seven sites, and less than $7 in one site. Only about one in every five enrollees who was employed at the end of the second year received health insurance benefits on the principal job, except in Baltimore County, where nearly half had such coverage. Other fringe benefits, such as a pension plan and paid vacation or sick leave, were somewhat more common.

The compensation of employed enrollees edged up over time. In six of the sites, the mean wage on the principal job held by an employed WtW enrollee was higher and/or fringe benefits were more common at the end of the second year after program entry than at the end of the first year. In no site was there deterioration between the two years in any of these elements of labor compensation.

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