Private Employers and TANF Recipients. 1.1  Background

05/25/2004

The nations welfare reform efforts of the last decade, emphasizing work first sought to move families from the welfare rolls into employment. With the help of strong economic conditions during the 1990s, great progress was made toward this goal. The welfare caseload dropped by more than 50 percent between 1994 and 2000. Research has concluded that this reduction in welfare caseloads is due to welfare-to-work policies (1) and a robust economy.(2)

More recently, the work first approach has been supplemented in two ways. First, job search and placement assistance has been used to help re-employ TANF recipients who lost their jobs in the weaker economic environment of the last three years. Second, TANF programs have sought better ways to promote job retention and advancement. To date, most job retention efforts have focused largely on identifying and addressing the problems working recipients face in areas such as child care, transportation, and housing. Job advancement strategies for welfare recipients with low wages, limited fringe benefits, and/or difficult work hours or conditions have included education, training, and job placement services.(3)

With these efforts, the success of welfare policy continues to depend in part on the labor market. Given this, it is surprising that little attention has been given to employer attitudes, policies and practices. Policymakers and researchers have devoted considerable attention to the experience of current and former TANF recipients in finding and retaining employment. Thanks to a wide range of research studies, much is known about recipients' employment attitudes, barriers to employment, job search efforts, and employment outcomes under regular and experimental conditions. Research also has documented aspects of the low-wage, low-skill labor markets in which TANF recipients typically look for and hold jobs, including the size and location of these markets, the relative importance of different industries and occupations, and the implications of part-time and temporary work for long-term employment outcomes.

While we know a great deal about the employee (supply) side of the labor market, we know much less about the employer (demand) side. Most research on the influence of employers' hiring and employment practices on individuals transitioning from welfare to work has involved qualitative data covering a small number of employers. This research has examined not only the policies and practices of the employers themselves, but also those of labor market intermediaries (i.e., the public agencies, private companies, and community organizations that connect employers to potential workers). Such practices may be as critical to TANF's success in promoting employment as are the efforts of TANF recipients themselves, but we lack comprehensive knowledge of these practices.

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