Report on Alternative Outcome Measures: Temporary Assistance for Needy Families (TANF) Block Grant . Performance Standards in Welfare-to-Work Programs Before PRWORA

Interest in outcome-based performance measures in the employment training and welfare-to-work arenas has been growing for quite some time. Since 1982, the U.S. Department of Labor has required states and local service agencies receiving funding under the Job Training Partnership Act (JTPA) program to report data on client outcomes and has provided corresponding incentives and sanctions on the basis of that outcome data. For adult JTPA participants, the key performance measures were the employment rate and average weekly earnings during the 13th week after program exit. These outcomes were measured both for all adult participants and for the subset of participants who were also welfare recipients. The Workforce Investment Act of 1998 (WIA), which replaced JTPA, includes a performance measurement system which builds on the JTPA model.

The Family Support Act of 1988 (P.L. 100-485), which created the JOBS program, also established work participation rate requirements for the states to meet. Prior to the establishment of JOBS, the primary system for holding states accountable for their use of AFDC funds was the Quality Control (QC) system. QC focused on the accuracy of the eligibility determinations and benefit calculations. The Family Support Act emphasized participation in work activities and established a participation rate requirement as a measure of programs' success in engaging recipients in work-related activities, primarily education and training. States were required to engage seven percent of non-exempt recipients in activities in Fiscal Year (FY) 1990, rising to 20 percent by FY 1995. (More detail on the JOBS participation rate requirements and a comparison of them to the participation rate requirements under TANF are provided in Appendix C.)

In the Family Support Act, Congress asked HHS to develop recommendations for performance standards regarding "specific measures of outcomes" beyond simple measures of levels of activity or participation. The resultant report, completed in 1994, acknowledged the importance of developing an outcome-based system of performance measures, but raised some critical issues that the Department believed "needed to be addressed and dealt with prior to using outcomes as the basis for performance measurement and standards." (HHS, 1994) These included:

  • the inconsistent relationship between program outcomes and program effectiveness, as measured through program evaluations of controlled experiments;
  • the need to create a "level playing field" across and within states, and over time, taking into account differing economic and demographic circumstances;
  • the effect of the choice regarding who is counted toward the outcome measure on performance; and
  • the recognition that different state JOBS programs may have different objectives.

The 1994 report did not recommend specific outcome-based performance measures, but rather presented a workplan for a process to refine existing participation rates, develop outcome-based performance measures and standards, and strengthen accountability mechanisms, including modifications to the Quality Control system. This proposed course of action was overtaken by the enactment of PRWORA and the implementation of the new TANF block grants.