Private Employers and TANF Recipients. 3.1  Existing Data Sources


3.1.1 General Assessment

Three features of the research literature are especially important from the standpoint of this project. First, few studies have concentrated on the important practices of employers and labor market intermediaries in recruiting, hiring, retaining, and managing TANF recipients. Exhibit 3.1 lists some of these practices, most of which can be performed by the employers themselves or outsourced to intermediaries.

The vast majority of studies that have examined employer practices regarding TANF recipients have done so in the context of a larger set of research concerns. The focus of the research typically has been employment and public assistance outcomes for TANF recipients and the demand for low-wage and entry-level workers, of which TANF recipients are a segment. There are some exceptions, however, and these studies play a prominent role in this assessment.

Second, when studies have considered employer and intermediary practices, this attention has been almost entirely descriptive rather than evaluative. A number of studies have identified and explained employment practices, but only one study has collected consistent and detailed data for a large group of employers and no research has gathered this kind of information on intermediaries. No study has systematically assessed the effectiveness of employer and intermediary practices.

Third, for many important employer topics, the available research literature is exclusively qualitative. Similarly, very little quantitative information has been assembled for most types of labor market intermediaries. This is not surprising, because many intermediaries do not work with large numbers of TANF recipients and/or do not track recipients separately from other clients, making quantitative analysis very difficult.

Exhibit 3.1
Key Practices of Employers and Intermediaries
Category In-House Employer Practices Intermediary Practices
Recruitment and Hiring Job Description
Contact with Referral Sources
Applicant Screening
Drug/Criminal History Screening
Aptitude/Skills Testing
Use of Screening Criteria
Applicant Evaluation
Reference Checks
General Training
Job-Specific Training
Applicant Screening
(outsourced by employer)
Applicant Evaluation
(outsourced by employer)
Training In-House Training
Soft Skills-Workplace
Soft Skills-Life Skills Training
Hard Skills-Classroom
Hard Skills-On-the-Job
Outside Training
Technical/Vocational School
Employer Training
(outsourced by employer)
In-House Training
Soft Skills-Workplace
Soft Skills-Life Skills Training
Hard Skills-Classroom
Hard Skills-On-the-Job
Training Referrals
Employee Support Mentoring
Employee Assistance
Job Coaching
Transportation Assistance
Assistance with Obtaining Public Supports
(e.g., Food Stamps, Medicaid)
Work Schedule
Work Options
Employee Assistance
(outsourced by employer)
Employee Management Communication
Fringe Benefits
Job Performance Assessment
Formal Assessments
Career Planning
Job Advancement Policies
Conflict Management
(outsourced by employer)

If Workforce Investment Act (WIA) One-Stop Centers are considered a type of intermediary, they constitute a noteworthy exception to this characterization. However, even for studies of One-Stop Centers the case study method is the dominant approach and data collection has generally been limited to open-ended interviews and site visits.

Although some studies attempt to relate participation and outcomes to specific program approaches, only one that we have reviewed has done so using quantitative data and statistical analysis (U.S. General Accounting Office, 2002a). Moreover, only a few of the One-Stop studies present quantitative participation and outcome data.(11)

As a result, the available research evidence on employers  the demand side of the labor market  is quite limited. In sharp contrast, there is a substantial body of research evidence, much of it based on rigorous evaluations, addressing the labor supply of welfare recipients under varying conditions. Studies have carefully compared recipients' labor supply with and without employment mandates, with and without financial incentives, and with alternative packages of employment-related services.

Comparable demand-side studies do not exist. Moreover, few studies have sought to compare outcomes  either employee outcomes (e.g., job retention) or employer outcomes (e.g., utilization of government-funded work supports)  for different employer or intermediary practices in a systematic fashion. There are several potential barriers to conducting random assignment experiments and reliable statistical studies of alternative employer and intermediary practices; notably, these studies' cost and necessary prerequisite knowledge (discussed in the next chapter). Thus, it may be difficult to conduct more systematic research. That said, the "best practices" and policy recommendations offered by available studies often rest more on assumptions and judgments than on strong evidence.

3.1.2 Holzer's Surveys of Employers

Among existing databases, one stands out in importance for addressing the questions discussed in this report. This is the telephone survey of approximately 3,000 employers, focusing on employer experiences with TANF recipients and directed by expert panel member Harry Holzer in 1998 and 1999. The survey covered employers in four metropolitan areas: Chicago, Cleveland, Los Angeles, and Milwaukee. The sample of business establishments was chosen randomly, with the probability of an employer's selection proportional to the number of its workers. Holzer also conducted the Multi-City Telephone Employer Survey (MCTES) in the early 1990s, which asked employers about their recruitment, hiring and employment of low-skill workers  including, but not limited to TANF recipients.

Holzer and his collaborators have conducted a number of analyses of each of these two surveys of employers. As discussed in the next chapter, valuable additional analyses could be done on issues covered by the surveys, but not yet addressed analytically by Holzer or others.

The importance of these surveys stems primarily from two features. First, the content of these surveys is entirely "on target." They were carefully designed to collect objective and detailed information from employers on important aspects of employers' experience with TANF recipients. For example, one series of questions addressed the specific skills sought by employers for particular jobs that have recently been filled. Respondents were asked "Does this position involve filling out forms on a daily basis?" and "Does this position involve keeping a close watch over gauges, dials, or instruments of any kind?" No other data source comes close to providing pertinent quantitative information at this level of detail.

Second, the surveys were administered to a stratified, random sample of employers in four major cities, including Chicago and Los Angeles, two of the largest cities in the U.S. The response rate for the interviews exceeded 60 percent in all four cities. The resulting employer sample is much more representative than comparable data sources (the exception is databases based on employer-reporting systems such as Unemployment Insurance and Bureau of Labor Statistics).

The surveys, however, have several noteworthy limitations. First, they were administered in only four cities, three of which are in the Midwest, and thus may not be nationally representative. As noted in the last chapter, research indicates that employers in urban centers are much more likely to hire TANF recipients than other employers. The absence of nonmetropolitan employers in these surveys may consequently skew their findings from a national perspective.

Second, the surveys were administered near the peak of the economic expansion during the 1990s. Employer demand for unskilled workers was extraordinarily high, which undoubtedly affected the survey responses.

Third, the surveys focused on recruitment and hiring practices, paying much less attention to employer practices following hiring. Indeed, the respondents for the surveys were the individuals identified as responsible for company hiring. As a result, the other practices shown in Exhibit 3.1 were largely ignored.

Fourth, the surveys paid limited attention to labor market intermediaries. Respondents were asked about organizations with which employers worked in recruiting and hiring individuals. However, they were asked little either about the intermediaries' mission or about the specific services they performed. This has implications for the interpretation of the survey findings. For example, an employer's interest in hiring TANF recipients can be expressed in different ways. One is an employer's willingness to hire individual recipients. Another is an employer's tolerance for recipients' relatively poor soft skills and relatively high support service needs. Both of these issues are addressed quite well in Holzer's surveys. However, another way employers show their interest is in working with labor market intermediaries that focus on TANF recipients, including welfare agencies. While expressions of willingness and tolerance on a survey suggest potential interest in welfare recipients as employees, established working relationships with the right intermediaries demonstrate this interest.

3.1.3 Welfare to Work Partnership Surveys of Intermediaries

Two surveys of labor market intermediaries were undertaken at about the same time as Holzer's surveys of employers. The surveys, which were completed by more than three-quarters of the 214 intermediaries identified by the Welfare to Work Partnership in the Atlanta and New Orleans metropolitan areas,(12) identified the services they provided to employers in connection with TANF recipients. The surveys in Atlanta and New Orleans were used to develop guides for use by employers in those cities (Abt Associates, 1999a and 1999b), and have not been used for research purposes.

These surveys are important for two reasons. First, they collected detailed information from intermediaries on (1) the missions of the intermediaries, (2) all types of services they provided to employers, and (3) the types of companies and business sectors they served. Second, the survey sought to interview all pertinent labor market intermediaries identified in two major metropolitan areas. The survey response rate for these interviews was 72 percent in New Orleans and 81 percent in the Atlanta area. This is the only survey of intermediaries that has been administered in this way.

Yet these surveys have clear limitations. Like the Holzer surveys, they were administered in urban settings  in this case two metropolitan areas  during the late 1990s. Importantly, in large part because the intermediary universe is a fraction of that for employers, the sample of completed interviews is very small  only 164. Finally, while intermediaries were asked to identify several employers with which they worked, follow-up interviews were done with only a small sample of these employers.

View full report


"report.pdf" (pdf, 212.99Kb)

Note: Documents in PDF format require the Adobe Acrobat Reader®. If you experience problems with PDF documents, please download the latest version of the Reader®

View full report


"appendix.pdf" (pdf, 433.16Kb)

Note: Documents in PDF format require the Adobe Acrobat Reader®. If you experience problems with PDF documents, please download the latest version of the Reader®