Status Report on Research on the Outcomes of Welfare Reform, 2002. Working Toward Independence

11/14/2002

The Enhanced Services for the Hard-to-Employ Demonstration and Evaluation Project

Employment programs for low-income parents with barriers to work will be tested under this large-scale project. The contractor, MDRC (in partnership with Urban Institute, the Lewin Group, and the California Institute of Mental Health) is conducting a multi-site, random assignment evaluation examining implementation issues, program designs, net impacts and costs and benefits of selected programs. It also will assess how the programs affect family functioning and child well-being. Program interventions will address a range of potential employment barriers including those having to do with physical health, mental health, human capital, and situational barriers. Some of the programs will focus on two generations, providing employment services to hard-to-employ adults while providing direct services to children or youth. The evaluation includes long-term follow up of the participating families. ASPE and our partner, ACF, first funded this project last year, and it will last about eight years.

Spending on Social Welfare Programs in Rich and Poor States

The purpose of this project is to examine the effects of fiscal capacity on state spending choices on programs to support low-income populations. Although a great deal of research has been conducted in the area of state fiscal capacity, little is currently known about how fiscal capacity directly affects state spending choices regarding social welfare programs. This project will focus on the effects of state fiscal capacity on the proportion of the each state's budget devoted to social service programs over time, as well as states' flexibility in spending for specific types of social service programs. Specifically, the project will explore whether choices in the allocation of state funds for low-income populations vary based on whether a state is "poor" or "rich." The project will include a two-part study of state spending on social services. The first part will use existing data sources to build a multivariate, 50-state model to examine social welfare spending choices made by each state. In the second part of the study, the contractor will gather additional information not provided by the 50-state model to build a separate, more detailed model that will analyze the difficult spending decisions across social welfare program that are faced by the very poorest states.

A Profile of Families Cycling On and Off Welfare

This study would focus on the subgroup of TANF families who exit and re-enter welfare, particularly those who return for multiple times. It builds on past ASPE-funded studies of welfare leavers and welfare applicants, which found that many leavers re-enter welfare, and similarly, that many applicants have prior welfare history. According to Moffit (2001), about 20 percent of the caseload have three or more spells over a ten-year period. This study would attempt to answer three research questions about such cyclers: (1) What are their demographic characteristics and employment outcomes, as compared with other comparison groups of welfare recipients or leavers? (2) How have patterns of benefit receipt and the phenomenon of cycling changed since PRWORA? (3) Do state or county offices treat families re-entering welfare for the third time differently than other families? To answer the first two questions, the contractor would review the literature and conduct analysis of existing administrative data bases that have already been linked to employment records, and preferably, also to survey data. Answering the third question would involve phone consultation with experts to identify states that treat cyclers differently from others, followed by phone interviews or possibly site visits with state and local officials with a handful of states.

Implementation of TANF Sanctions

Examining variations in sanction policies, practices and outcomes across offices is the objective of this study. Previous studies have found wide variation in sanctioning rates across sites (e.g., Urban Change) and even across offices within a single city (e.g., Legislative Audit Bureau study of W-2 in Milwaukee). The study would examine whether the welfare offices with different sanction policies and practices also experience differences in outcomes including: welfare exits and re-entries, participation in work activities, and family and child income and well-being. This project draws largely on administrative data, as supplemented by site visits in order to improve our understanding of how sanctions are implemented. Sites will be selected both to maximize variation and to leverage the contractor's previous knowledge of sites and experience with the administrative data sets.

Wage Progression and the Dynamics of the Low-Wage Labor Market

Given the strong work-focus of TANF and time limits on the receipt of federal TANF assistance, policy makers are interested in understanding the potential for advancement in the labor market among low-wage workers. Do individuals in low-wage jobs have opportunities to progress economically? What helps low-wage workers advance? Do low-wage workers need to change jobs and/or employers to make wage gains? Do individuals need to take multiple jobs to make significant economic gains? While past research has examined the dynamics of low-wage employment, wage progression, and unemployment in the 1980s, the same in-depth research has not been conducted after the passage of PRWORA. To help fill this gap, this project takes the newly released 1996 Panel of the Survey of Income and Program Participation (SIPP) to examine wage progression among low-wage workers by tracking the dynamics of low-wage employment over a four-year period from 1996 to 1999. The upcoming public release of the full longitudinal 1996 SIPP panel offers a valuable, rich data resource for examining these critical wage and labor market issues.

Serving TANF and Low-Income Populations through Workforce Investment Act One-Stop Centers

Exploring the coordination of TANF and one-stop employment centers and the capacity of one-stops to serve the low-income and low-skilled are the focuses of this study. The Workforce Investment Act (WIA) one-stop system is likely to become the nexus of support for ever larger numbers of low-income and low-skilled people seeking employment and employment-related services. DOL Welfare-to-Work grant activities are winding down, possibly further increasing pressure on one-stops to fill the gap in serving the hardest-to-employ. Anecdotal evidence indicates that some employers may be reluctant to participate in one-stops that serve a largely low-income or welfare client base, and that some one-stops are hesitant to take on special-needs clients such as those with substance abuse histories or learning disabilities. This project will build on earlier studies and assess the progress made in coordinating TANF and one-stop services. It will explore the unique challenges involved in serving welfare and ex-welfare clients and the low-skilled in general through one-stop centers designed to serve people at all income and skill levels. The study will involve discussions with and visits to TANF agencies, Workforce Investment Boards, employers, welfare and non-welfare one-stop clients, and others in selected sites.

Evaluation of NY Welfare Intervention for Substance Abusing TANF/GA Recipients

This project will launch a comprehensive evaluation of several innovative programs in New York City for welfare recipients with substance abuse and mental and physical health barriers to employment. It offers an unusual opportunity to systematically advance the knowledge-base about programs for the "hardest to employ" in the context of one of the largest and most complex service delivery systems in the country. The New York City project is a new effort to provide intensive case management and drug treatment services to TANF and General Assistance (GA) clients with alcohol and other drug problems. It is part of an evolving national evaluation of programs across the country that are targeted to welfare recipients and other low-income individuals who face significant behavioral/health barriers to finding and maintaining employment. Core funding for the evaluation is being provided by the Department through the Administration for Children and Families' Employment Retention and Advancement (ERA) project. While ACF's investment will provide for basic evaluation, the contractor, Manpower Demonstration Research Corporation (MDRC), and the site are interested in doing more intensive, in person follow ups with clients and with treatment providers. By providing funds, ASPE would be able to work with other funders (including the National Institute on Alcohol Abuse and Alcoholism (NIAAA) and the National Institute on Drug Abuse (NIDA)) to design enhancements to the core study. These enhancements would include collecting more data through in person interviews, additional questions, and over a longer follow-up period. The study will add to the knowledge base in several important areas. It will assess whether findings from an implementation study in New Jersey can be replicated in a complex urban system. It also will assess whether the findings can be extended beyond increased engagement in treatment to effects on substance abuse.

Study of Child Support and TANF Interaction

Examining the interaction between child support status and TANF exit or reentry, and coordination between the TANF and child support agencies is the focus of this study. Child support is an important component of family self-sufficiency. This project examines how child support status (i.e., paternity established, order established, receipt of child support) interacts with TANF exit or reentry, and coordination between TANF and child support agencies. Are child support enforcement services targeted to TANF recipients around the point of TANF exit? Because of child support distribution policies, after TANF exit many families will begin to receive all of the child support paid on their behalf for the first time. Do families know how much child support they will receive when they leave TANF? Are former TANF recipients getting the support paid on their behalf as soon as they exit TANF? Some of these questions could be answered through state administrative data matching and others through site visits to states that demonstrate best practices. The Office of the Inspector General (OIG) has done some preliminary work in this area that would inform this project and assist with site selection.

The Federal Parent Locator Service (FPLS), TANF, and Medicaid Database

The Federal Parent Locator Service (FPLS) is primarily a national data system to help states locate non-custodial parents, alleged fathers, and custodial parents so they can establish and enforce child support obligations. PRWORA expanded the data available in this system to include information on child support cases and wage and employment data on nearly all workers. The law also authorized HHS to retain samples of this data and use them for research likely to contribute to achieving the purposes of titles IV-A (TANF) or IV-D (Child Support Enforcement). Conference Committee language from the FY 2002 Appropriation for the Department of Health and Human Services recommends that Welfare Outcomes research funds be used in part for the collection and use of "data administratively linking that National Database of New Hires [which is part of the FPLS], other child support enforcement data, TANF, and Medicaid records together." The design and implementation of the Federal Parent Locator Service (FPLS), TANF and Medicaid data warehouse is a joint ASPE, ACF, and CMS project to monitor the progress of welfare reform. Child support data, TANF client data, and Medicaid client data will be merged into a research data warehouse to assist with federal and state program oversight, research, statistical reporting, policy and evaluation for the populations served by TANF, Child Support and Medicaid. One major advantage of the data base is that it will allow us to understand program participation and interactions over time. For example, information on child support, Medicaid participation, and earnings will help us understand individual and state differences in movement on and off TANF cash assistance and develop policies that appear to increase the potential for family self-sufficiency. Some of the difficulties in developing a state and nationally representative research data base that combines data from the various sources include: the various data bases are not programmed in compatible languages; the data cover different time frames; individuals have to be linked into related family units; and sampling schemes have to be constructed for each state. All of the program specific data bases are being maintained and/or were developed with contractor support. ASPE's FY 2002 contribution will help insure that we can fully respond to the Congressional intent of ensuring that other child support data is integrated into the research database to the full extent of their statutory authorizations.

Private Employers and Welfare Reform: Current Practices and their Implications for TANF

Over 10,000 companies participate in the Welfare-to-Work Partnership, and an array of companies are known for their ingenuity in recruiting, training, retaining and promoting TANF recipients. A number of case studies and pilot projects have examined innovative practices for successfully employing TANF recipients, and several recent surveys have examined particular industries and states. Nevertheless, we lack a national, overall portrait of the prevalence, variety, and limitations of such practices, such that basic questions have not been answered. Questions include what employers who rely on low-skill, entry-level workers do to successfully employ TANF recipients; why they do it; why many do not do it; what would enable them to increase and improve their efforts; and which segments of the TANF population present the greatest challenges. In order to begin to answer these questions, and to identify options for answering them more fully, this project will synthesize recent research and identify gaps in knowledge by reviewing existing studies, survey instruments and data sources, and consulting with experts and stakeholders. The final report will summarize the current state of knowledge in this area and its implications for TANF and for private employers, and will identify options for advancing this knowledge in order to observe the sensitivity of employer practices to changing labor market conditions, by conducting a followup survey or by revisiting the other data sources at a later time. In addition to having fundamental implications for TANF policy and administration, findings would allow the Department to better focus its technical assistance for private employers, labor market intermediaries and program administrators.

Welfare Closed Cases - job entry and earnings: Data Match TANF - FPLS: Data Matching to Assess Welfare Outcomes for the 50 States and the District of Columbia

This project will utilize five federally administrated databases to assess outcomes for former TANF recipients. The project will assess six outcomes: four are related to employment - job entry, earnings, earnings gains, job retention. By linking the various databases: ACF's TANF Database of closed TANF cases, National Directory of New Hires database (NDNH), Quarterly Earnings database, and possibly the Child Support Case Registry database, this project will provide state-by-state estimates of important welfare outcomes.

Project on Devolution and Urban Change

Our continuing support leverages data from a study of welfare reform in four large urban areas. The Urban Change project brings together data from an unusually wide array of sources: longitudinal administrative data for all families receiving AFDC/TANF or food stamps dating back to 1992, survey data, an implementation study, neighborhood indicators, an institutional study focusing on local service providers, and an ethnographic study of a limited number of families. In 2002-2003, MDRC will be primarily focused on writing the cross-component synthesis reports for Miami, Los Angeles and Philadelphia. (The Cleveland report is due out in Spring 2002.) Our contribution allows us to leverage the large amount of private money that has been invested in data collection toward questions of interest to HHS. Topics of interest include: the role of faith-based organizations in providing services in these communities, the use of sanctions as a mechanism to promote participation, and the characteristics of families that cycle on and off welfare.

Partners for Fragile Families Evaluation

Targeting young, never-married, non-custodial parents who may face obstacles to employment, the Partners for Fragile Families (PFF) demonstrations are designed to help the fathers in such families work with mothers in sharing legal, financial, and emotional responsibilities of parenthood. PFF demonstration projects in nine states were approved under HHS waivers and are currently underway. The projects test new ways for state-run child support enforcement programs and community-based organizations to work together to help young fathers obtain employment, make child support payments and learn parenting skills; and to help parents build stronger partnerships. The evaluation, which is being conducted by the Urban Institute, has three broad purposes: to increase knowledge about systems change; to build knowledge about program operations and delivery of services to fragile families; and to describe client behavior. Process and outcome evaluations are being conducted through interviews with service providers, including child support enforcement, community-based organizations, and partner agencies; and by analyzing client data and follow-up surveys. Case studies also are being conducted. ASPE and OCSE are sharing the cost of this five-year study; the current funding is year three of ASPE's four year funding commitment.

Analysis of Topics Related to Marriage: Program Supports for Married and Two-Parent Families

This project would seek to fill several important gaps in our knowledge of how state policies affect marriage and family formation outcomes. A key question in understanding the role of state policy in promoting two-parent and married-parent families is the degree to which these families access supports through public assistance programs, and the factors that might affect this. This project will examine participation of two-parent and married-parent families in TANF, food stamps, and Medicaid. This analysis would lend important support to an agenda undertaken by ACF that focuses primarily on developing marriage-strengthening programs, and we would work closely with ACF in implementing this analysis.

Child Outcomes in State Welfare Evaluation

With other federal and private funders, ASPE and ACF are working with states to improve measurement of child health and well-being outcomes in state welfare evaluations. Five states are using a common protocol to add child outcome measures to their welfare reform evaluations. Continuation funding is enabling states and their evaluators to receive research technical assistance on collecting survey data using the common core of instruments, using administrative data sources, and developing and coordinating data analysis and reporting strategies. The focus of the current phase of work is the production of a synthesis of the findings from the state evaluations. The research technical assistance is provided by the NICHD Research Network on Family and Child Well-Being under Child Trends' Leadership.

State Use and Reporting of TANF Administrative Data

The purpose of the project is to work with states to improve their capacity to use the administrative data they gather from the TANF program for program management and performance measurement. While every state and locality operating a TANF assistance program is mandated to collect a wide range of administrative data for program operations and mandated reporting requirements, many administrators fail to reap the full range of benefits from these data. The contractor, working closely with states through a series of working group meetings and other interactions, will develop a model or framework for using TANF administrative data for program management. This improved data capacity could then be "spun out" to other states that do not participate directly in the project. As a positive by-product of the project, there will be an improvement in the quality of the TANF administrative data collected by the states and reported to HHS. The final products of the study will include a CD-ROM that states can use to make their administrative data more usable, and a final report detailing the outcomes of the working group meetings.

Building Administrative Data Capacity Around Low-Wage Employment Outcomes

With the tremendous success achieved by welfare reform in moving large numbers of former recipients into jobs, attention is now turning to their ability to advance in the labor market, and the factors that affect those transitions. This study would analyze a unique administrative data base and produce a report describing the factors that are most likely to lead to positive employment transitions, or hinder those transitions, for low-wage workers and former public assistance recipients. These factors would include both personal characteristics of the workers, but also employer characteristics such as industry, firm size, turnover rates, capital investment, productivity, and location. With respect to location the analysis would show, for example, the nature of employment transitions in rural, urban or high poverty areas, or whether positive transitions are more likely among workers willing to commute from their central city neighborhoods to jobs in the suburbs. Existing studies on employment transitions based on survey data are limited in several ways. For example, CPS data can provide a current snapshot of the labor market, but are not useful for following workers' progress over time. Longitudinal surveys can follow workers over time, but sample sizes are often too small to produce reliable estimates for important subgroups, and are often outdated by a few years or more - a serious problem given frequently changing social policy and labor markets. Furthermore, most national surveys contain only information reported by the individual - they can analyze the effect of personal characteristics on employment, but can say little about what types of firms are more likely to generate positive transitions. This project using the Longitudinal Employer Household Dynamics data (LEHD) provides a unique opportunity to better understand the factors that affect job transitions and wage progression. The data are housed at the Census Bureau and are not publically available. The LEHD contains several administrative data files including records from the Census Bureau, UI wage records, and BLS establishment (company-based) records. The data cover the nine states of California, Illinois, Maryland, Florida, Texas, North Carolina, New Jersey, Pennsylvania and Minnesota, accounting for 60 percent of the U.S. labor market. Analysis using the LEHD has several advantages that address gaps described above. First, they are thought to be more accurate than survey data. Second, they contain information through 2001, capturing important changes in the U.S. labor market. Third, the LEHD contain millions of records and can produce reliable estimates for detailed subgroups. Fourth, the data are linked longitudinally to follow workers and the employers they work for over a period of about 10 years. Finally, they contain records not only for workers, but also for employers. The records are matched together using UI wage files, which contain both employee and employer identification numbers for nearly all workers.

Aggregated Data by State on the Web

Under this project, ASPE will work with ACF to enhance the web-based reporting system being developed for state reporting of aggregated caseload and expenditure data for the TANF program. The system will make recent data available more quickly and in a widely accessible form on the Internet. Data will be protected through a secure web site with passwords and other measures to ensure data integrity and security. The current web-based reporting system would be enhanced to produce national totals, graphs of time trends, and other tables and figures. The data will thus be more useful for program management and monitoring for both the states and federal government, especially since data would be available on a more timely basis than under current arrangements. In essence, the goal is to developing an enhanced, electronic version of the "flash report" that was used to provide monthly caseloads and expenditure data under the old AFDC program.