National Evaluation of the Welfare-to-Work Grants Program: Final Report. Introduction

09/01/2004

The work requirements and time limits included in the federal welfare reforms of 1996 made it especially important to move the hardest-to-employ welfare recipients into jobs and help them become economically self-sufficient. To address this need, Congress authorized the Welfare-to-Work (WtW) grants program. This program built on the Personal Responsibility and Work Opportunity Reconciliation Act (PRWORA) of 1996, which created the work-focused, time-limited Temporary Assistance for Needy Families (TANF) program.(1) PRWORA was designed to move people off the welfare rolls and into employment quickly, and the WtW grants program provided additional resources targeted to those who were particularly disadvantaged and likely to have the greatest difficulty finding and holding a job.

This report presents findings from a multi-site evaluation of the WtW grants program. Mathematica Policy Research, Inc. (MPR), the Urban Institute, and Support Services International, Inc., conducted the congressionally mandated evaluation under contract to the U.S. Department of Health and Human Services (DHHS). The evaluation documented the implementation of WtW programs funded by the grants in states and localities across the nation and analyzed outcomes for participants in selected programs. Given the evaluations design, the findings presented here give a useful picture of how enrollees fared after entering WtW-funded programs; however, they are not indicative of the contributions that the programs themselves may have made to the enrollees employment and well-being. Exhibit I.1 summarizes the evaluations main findings and Exhibit I.2 identifies lessons learned from the evaluation regarding program design and implementation.

 

EXHIBIT I.1
Summary of Evaluation Findings
Program Services
Study site programs focused, as intended, on employment rather than education and training, but many went beyond job readiness/ job search assistance. WtW programs in the study sites followed four models: pre-employment preparation and job placement, direct employment, post-employment skills development, and a rehabilitative model for absent fathers on probation or parole.
Program Cost
The average study site WtW program cost $3,607 per enrollee, about the same as typical JOBS programs created under the earlier Family Support Act. Average WtW costs in these sites, adjusted for inflation, were only moderately higher than in the WIN programs of the 1980s, but considerably lower than in supported work programs.
Program Targeting
WtW enrollees faced employment challenges that were typical of those faced by the TANF population after several years of caseload decline. In most sites, more than a third of WtW enrollees were high school dropouts, and more than one in five had work-limiting health problems. But the employment histories of enrollees prior to program entry were not consistently weaker than those of the TANF population, indicating that the enrollees were not harder to employ than TANF recipients in general.
Participants Employment Outcomes Over Two Years
Most enrollees found jobs, but their employment was unstable. Except in two sites that targeted employed persons, few enrollees were working at program entry, but mostВ  two-thirds or moreВ  worked at some time during each of the next two years. However, their jobs were often unstable; in most sites about 40 percent of enrollees were employed at the end of the second year after program entry.
Employment fell between the first and second years after program entry. Except for one site, WtW enrollees were less likely to have worked during the second year following entry than during the first. The median reduction in those who worked during the year was 10 percentage points.
Enrollees employed after two years worked a lot for low wages and limited fringe benefits. Employed enrollees worked nearly full-time, on average. Wages averaged about $8 per hour in 7 of the 11 sites, and one in five had employer-sponsored health insurance. However, wages and/or insurance coverage were somewhat better in 6 sites after two years than after the first year.
Participants Well-Being Two Years After Entering WtW
Poverty was common among WtW enrollees two years after program entry, but it was lower among those who were employed. Mean household incomes were stable from the end of the first year following entry to the end of the second, as were poverty rates, which exceeded 60 percent in all but two sites. Poverty rates were 16-43 percentage points lower for the employed than the not employed. But, even among the enrollees who were employed two years after program entry, the poverty rate exceeded 50 percent in all but two sites.

 

EXHIBIT I.2
Lessons Learned from the Evaluation Regarding Program Design and Implementation
Effective Inter-Agency Partnerships Are Important
The legislation that authorized the WtW grants, the Balanced Budget Act of 1997 (BBA), required local programs funded by the grants to be implemented within a framework of partnership with local TANF agencies. However, effective partnerships were often slow to develop. In combination with falling welfare caseloads, this often resulted in low numbers of referrals of welfare recipients by TANF agencies to WtW programs, thereby exacerbating the difficulties that many local WtW programs experienced in achieving their enrollment targets. In sites where effective partnerships ultimately did develop, they resulted in improved access for welfare recipients to the workforce development system.
Increased Service Capacity is an Important Legacy
WtW grants afforded many nonprofit community-based organizations their initial opportunity to serve TANF recipients and/or noncustodial parents. Thus, the program increased the pool of qualified organizations with which TANF agencies can contract for employment services in the post-WtW era.
Program Flexibility Encourages Innovative Programming
Flexible rules allowed WtW grantees and their service providers to develop creative program service approaches and administrative practices. These included partnerships with employers, transitional and supported employment, and post-employment case management and job retention services. Some grantees pressed for additional flexibility to provide a broader range of pre-employment services, and Congress responded in 1999 with amendments to the program that permitted up to six months of pre-employment skill-enhancement training.
Stringent Eligibility Criteria and Fiscal Requirements May Result in Low Enrollments
The BBA required WtW grantees to spend at least 70 percent of their grant funds on services for enrollees who met very detailed and restrictive eligibility requirements. Up to 30 percent of grant funds could be used to provide services to enrollees who met less stringent eligibility requirements. The former requirement contributed to the widespread problems that grantees experienced in achieving enrollment targets during the early years of the WtW program.
A Mid-Course Correction to a Temporary Program May Be Ineffective
Amendments to the BBA passed in 1999 loosened the criteria that defined the enrollees on whom at least 70 percent of grant funds had to be spent. In response to requests from grantees for additional flexibility to provide a broader range of pre-employment services, the amendments also expanded the list of allowable pre-employment program activities to include up to six months of vocational education or job training. However, the potential for these changes to have effects were limited because the final program rules reflecting the amendments were published late in the life of the time-limited (five years) grants program and, in that context, grantees were reluctant to revise existing procedures and referral agreements with local TANF agencies.
Temporary Funding May Accentuate Program Design and Implementation Problems
The BBA required that grant funds be spent within three years of their receipt. The 1999 amendments extended that period by two years. Despite the extension, some local WtW administrators continued to believe that temporary funding compounded problems associated with the design and implementation of their programs. These included the reluctance of TANF and other agencies to refer clients to WtW rather than to service providers with whom they had long-term relationships. The administrators also viewed short-term funding as an impediment to identifying and correcting program design problems.

 

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