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

12/01/2000

The job entry rate would measure the proportion of the unemployed TANF adult caseload that obtained a job. This measure gauges the success of states in achieving one of the key goals of the TANF program - moving individuals into employment. The job entry rate is one of the measures used by HHS to award the TANF High Performance Bonus. (The data used for making the FY 1999 awards are shown in Table 2.) In addition, the job entry rate has been used as a performance measure for workforce development programs operating under the Job Training Partnership Act (JTPA) and its successor, the Workforce Investment Act (WIA).

Table 2.
Job Entry Rate

(Data Reported for FY 1999 High Performance Bonus Awards)
State 1997 Rate 1997 Rank 1998 Rate 1998 Rank 97-98 %
Improvement
Improvement
Rank
Alabama 40.63 17 41.72 22 2.67 30
Alaska * * 48.78 13 * *
Arizona 45.96 12 47.73 15 3.87 26
Arkansas 39.08 18 41.36 24 5.83 22
California 31.51 34 33.66 37 6.82 20
Colorado 34.14 30 36.84 32 7.89 16
Connecticut 27.32 38 24.40 41 -10.71 37
Delaware 52.79 6 62.71 2 18.80 8
Dist. of Columbia 21.34 41 23.58 43 10.50 12
Florida 27.73 37 28.65 40 3.29 28
Georgia 37.00 24 38.12 27 3.05 29
Hawaii 21.68 40 18.82 46 -13.22 39
Idaho * * * * * *
Illinois 47.45 10 52.37 10 10.37 14
Indiana * * 88.41 1 * *
Iowa 37.83 20 40.41 25 6.84 19
Kansas 45.47 13 44.71 18 -1.66 34
Kentucky 34.35 29 37.22 31 8.35 15
Louisiana 35.92 27 49.31 12 37.27 2
Maine * * * * * *
Maryland 32.33 32 33.47 38 3.52 27
Massachusetts 31.04 35 35.45 36 14.20 9
Michigan 42.33 14 46.99 16 11.02 11
Minnesota 37.56 21 45.40 17 20.90 7
Mississippi 41.55 16 36.71 33 -11.65 38
Missouri 37.03 23 36.22 34 -2.18 35
Montana * * 42.84 20 * *
Nebraska * * * * * *
Nevada 48.91 9 61.48 5 25.70 4
New Hampshire 38.77 19 36.02 35 -7.09 36
New Jersey 35.39 28 37.26 30 5.28 23
New Mexico * * * * * *
New York 27.78 36 30.68 39 10.47 13
North Carolina 37.25 22 38.10 28 2.28 32
North Dakota 59.80 2 62.36 4 4.29 25
Ohio * * 24.20 42 * *
Oklahoma 33.22 31 42.56 21 28.09 3
Oregon 24.23 39 20.07 44 -17.17 40
Pennsylvania 54.79 5 58.77 6 7.27 17
Rhode Island 36.48 26 41.55 23 13.89 10
South Carolina 41.57 15 44.55 19 7.17 18
South Dakota 32.15 33 39.62 26 23.21 5
Tennessee 59.43 3 62.43 3 5.04 24
Texas 51.65 7 54.84 9 6.17 21
Utah 56.95 4 56.32 8 -1.11 33
Vermont 47.02 11 48.15 14 2.40 31
Virginia * * * * * *
Washington 36.74 25 51.27 11 39.52 1
West Virginia 16.57 42 20.04 45 20.93 6
Wisconsin 49.12 8 37.41 29 -23.84 41
Wyoming 82.39 1 57.72 7 -29.94 42
* State not participating
The job entry rate is the unduplicated number of adult recipients who entered employment for the first time in a given year (job entries) as a percent of the total unduplicated number of recipient adults unemployed for the first time in that year. Adult recipients participating in workfare or fully subsidized employment are not included in the numerator but are included in the denominator.

Measurement Issues. When defining the job entry rate, it is necessary to determine whether employment in both unsubsidized and subsidized employment will count toward the rate. Because it is perceived as more aligned with the goals of welfare-to-work programs, many programs using job entry as a performance measure generally count all employment that is not fully subsidized. In the interests of minimizing the data reporting burden, under the TANF High Performance Bonus final rule, HHS is counting all employment, whether or not subsidized.

Another measurement issue is determining which individuals to include in the rate. Should only those who receive benefits counting as "assistance" under the TANF rules be included, or should recipients of other types of services be counted? What about applicants who are diverted from receiving assistance? If diverted applicants are not counted, states with successful diversion programs will actually be lowering their job entry rate. Because there is no standardized definition of what constitutes an application, it would be extremely difficult to develop a measure that is comparable across states.

A related question is whether to count only individuals who leave cash assistance when they find a job or to also include those who remain on aid while working. Because individuals in states with low grant amounts are more likely to leave cash assistance when they find a job, states are treated more equitably if the rate counts all individuals who move into employment regardless of whether they leave cash assistance. Allowing only individuals who leave cash assistance for employment to count toward the rate may also give states incentives to reduce their grant levels or their earnings disregards. For these reasons, the job entry rate for the TANF High Performance Bonus allows states to count all individuals moving into employment, whether or not they are receiving cash assistance. However, finding work that ends dependence on cash assistance remains the ultimate goal of the TANF program.

A more expansive approach could examine work participation for a broader range of low-income families, not limited to those who have received TANF benefits. Such an approach would reward states that used their flexibility under TANF to serve a range of low-income families. However, this measure would probably be more affected by underlying economic conditions than by any action taken by the state's TANF program.

Data issues. The job entry rate could be measured on a state-by-state basis through several sources: state TANF administrative data, surveys, and Unemployment Insurance (UI) wage records. Of these sources, UI wage records, collected by state employment security agencies, are the preferable source, because they provide high quality employment data at a relatively low cost. However, they have two important limitations. First, they do not cover all jobs in a state, excluding such jobs as self-employment, agricultural employment, employment by the federal government or military, and jobs outside state boundaries. Second, UI records only track total quarterly earnings; they can not be used to calculate hourly wages. Historically, state administrative data on cash assistance recipients who find jobs have been of varying quality, in part because recipients often do not notify the welfare department when they find a job. Because data on job entry based on state TANF administrative records may vary in quality from state to state, it may be difficult to rank or evaluate state performance based on this source. Surveys may provide more accurate data, but they are generally too expensive for states to rely on for ongoing data needs.

Because of these concerns, for the 1999 and 2000 awards, states were allowed to submit the best data they had available for the interim High Performance Bonus measures, regardless of the source. Thus states could use matches with UI data, surveys, administrative records, or a combination of these data sources. In general, in 1999, states opted to use linked UI data, in some cases supplemented with information from administrative data regarding jobs not covered by the UI system. Under the final High Performance Bonus regulation, HHS has decided to calculate the work-related measures by linking information on TANF recipients with data from the National Directory of New Hires (NDNH), which combines the information in state UI databases with information from federal agency personnel offices. This minimizes the reporting burden on state agencies and ensures that the measures will be calculated based on data that are consistent across states.

Fairness issues. Data available to date for this measure (see Table 2 for FY 1998 data), show a great deal of variation in the job entry rates achieved. (For FY 1998, rates ranged from under 20 percent to almost 90 percent, with most states achieving rates between 30 and 50 percent.) This variation could be attributed to any or a combination of several factors, including the usual differences in economic conditions, the fraction of employment that is covered by UI in the state, and/or each state's stage of welfare reform implementation at the time of measurement. With respect to the last factor, states that had taken earlier aggressive steps to move recipients into work may have found that those recipients remaining unemployed faced substantial barriers to employment and thus were harder to place.