Report on Alternative Outcome Measures: Temporary Assistance for Needy Families (TANF) Block Grant . Background


In 1994, the Department of Health and Human Services issued a report on the use of outcome measures to evaluate welfare-to-work programs. This report was issued in response to a Congressional mandate to study alternatives to the work activity participation rates required under the Job Opportunities and Basic Skills Training (JOBS) program. The 1994 report on outcome-based performance measures was generally supportive of the concept of outcome measures, but expressed concern about possible unintended consequences. The 1996 welfare reform act mandated a further examination of outcome-based measures for evaluating states success in moving individuals from welfare to work, in light of the dramatic program changes the law put in place. In recent years, outcome-based performance measurements have become more common generally. Many states have adopted their own internal outcome-based performance measurement and incentive systems. A total of 47 states submitted data in 1999 in order to compete for the first year of the High Performance Bonus.

Participation rates were initially designed to introduce a sense of reciprocal obligation into a welfare system that, heretofore, had been based on issuing benefits henceforth, at least some portion of the caseload would be required to do something in exchange for receiving benefits. With the advent of time limits, participation rates also provided a means of ensuring that clients received services that would promote self-sufficiency.

Todays environment could not have been foreseen when the welfare reform law passed in 1996:

  • Most (almost two-thirds in 1997 and 70 percent in 1998) of the welfare recipients who count toward the participation rate are working in unsubsidized employment, rather than participating in other activities such as job readiness or training. This is, in part, a result of state decisions to increase earnings disregards, which allow individuals to combine work and welfare for longer periods.
  • Although many states have achieved impressive participation rates, in general state participation rate targets are much lower than initially had been expected, due to the caseload reduction credit.
  • Nonetheless, it may become harder for states to achieve the participation rates over time for three reasons: the minimum participation rate increases each year until 2002; the number of hours of participation required in order to count toward the rate also increases; and as the most job-ready participants leave welfare the share of the caseload that is harder-to-serve (with greater barriers to employment) appears to be increasing.