Role of Intermediaries in Linking TANF Recipients with Jobs: Final Report. Introduction

The Personal Responsibility and Work Opportunity Reconciliation Act (PRWORA), enacted in August 1996, brought sweeping changes to the countrys welfare system. Through the elimination of the 61-year-old Aid to Families with Dependent Children (AFDC) program and the creation of the Temporary Assistance for Needy Families (TANF) block grant, the new law shifted the emphasis of the welfare system from providing ongoing cash assistance to placing welfare recipients in jobs. The infrastructure required to accomplish these two goals is quite different. A system focused on providing income support requires staff who are proficient in three key tasks: applying complex eligibility rules to a broad range of family circumstances, determining payment amounts accurately, and issuing cash payments to eligible families in a timely manner. In contrast, a system focused on helping parents find employment requires staff who understand the labor market and how to build relationships with the business community, who can teach unemployed individuals how to look for work, and who can link them with employers who have job openings. Although the balance between these two goals has shifted, welfare offices need to be proficient in both functions to succeed in the current environment.

Local welfare offices have relied on a number of different strategies to shift to a more work- oriented assistance system. Some have either expanded the role of former income maintenance (eligibility) workers to include more tasks related to helping welfare recipients find employment, or they have hired additional staff to perform these functions. Others have created closer alliances with or transferred primary responsibility for employment-related activities to the local workforce development system. Still others have increased their use of intermediaries private or public organizations that act as brokers between the welfare system and employers. Intermediaries recruit, train, and place recipients with employers, often following up to make sure that job placements are successful. Intermediaries appeal to businesses because they serve as an efficient link between the company and the welfare system. They relieve the company of administrative burdens, ensure that prospective employees are job-ready, and, in some cases, help resolve difficulties with child care, health insurance, and transportation. For welfare offices, intermediaries provide a practical way to tap existing expertise in linking job seekers with employers.

Although it is perceived that many welfare offices are using intermediaries to link welfare recipients with jobs, very little is known about how widely they are used, who these intermediaries are or how they operate. To better understand the characteristics of intermediary organizations and their role in linking welfare recipients to jobs, the U.S. Department of Health and Human Services, Office of the Assistant Secretary for Planning and Evaluation (ASPE) contracted with Mathematica Policy Research, Inc. (MPR) to conduct the exploratory research documented in this report. This research has four purposes:

  1. To describe the characteristics of intermediaries participating in welfare employment efforts in selected communities across the country
  2. To describe the key decisions local welfare offices have made regarding the use of intermediaries
  3. To provide in-depth information on the types of services intermediaries provide and the process they use to link welfare recipients with employers
  4. To identify lessons that can benefit policymakers and other or newly emerging intermediaries and assess the implications of the findings for future research on welfare employment efforts

The devolution of responsibility for the design and implementation of welfare programs to state and local governments makes understanding the role of intermediaries extremely complex. Thus, we begin our analysis of the role of intermediaries in Chapter II with a discussion of how much responsibility localities transfer to intermediaries, how they organize the work of intermediaries and how they reimburse intermediaries for the services they provide. Chapter III then offers a detailed discussion of how intermediaries link welfare recipients with jobs. This chapter discusses how welfare recipients are linked with intermediaries, describes the services intermediaries provide to welfare recipients and explains how intermediaries build relationships with employers and eventually link welfare recipients with jobs. Chapter IV concludes the report with a summary of the lessons learned from this analysis and a discussion of what the findings imply about future research on welfare employment efforts. Before presenting our findings, in the next section we describe our approach to studying the role of intermediaries and briefly describe their characteristics.

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