Understanding the Costs of the DOL Welfare-to-Work Grants Program. Participant Characteristics May Have Influenced WtW Costs per Placement

08/01/2002

To the extent that WtW programs worked with relatively more or less hard-to-serve individuals, their costs per placement may vary.(13) WtW programs that targeted WtW-eligible participants with the most severe barriers to employment, on average, had lower placement rates than programs that targeted the general WtW-eligible population or WtW-eligible participants who met at least a minimum threshold for employability (Table III.9).

Table III.9
Wtw Costs per Placement by Target Population
WtW Programs, by Target Population Cost per Placement
(in Dollars)
Placement Rate
(Percent)
Cost per Participant
(in Dollars)
Average Starting Hourly Wage
(in Dollars)
Hardest-to-Serve Among WtW Eligible
Fort Worth-ANS 7,725 33 2,365 NA
Chicago-Catholic Charities 8,339 40 3,310 7.00
Philadelphia-TWC 13,778 48 6,641 7.26
Chicago-Easter Seals 5,758 54 3,086 6.64
Averages 8,900 44 3,851 6.97
Relatively Job-Ready Among WtW Eligible
Boston-Partners 8,192 66 5,407 8.98
Boston-Marriott 3,251 71 2,308 9.67
Chicago-Pyramid 8,037 73 5,827 7.43
Averages 6,493 70 4,514 8.69
General WtW Eligible
Fort Worth-WC 5,241 42 1,887 NA
West Virginia-HRD 6,182 61 3,771 5.84
Nashville-Pathways 3,685 53 1,964 7.19
Yakima-OIC 8,762 51 4,433 7.40
Yakima-FWC 8,065 61 4,912 7.07
Chicago-E&ES 5,453 62 3,392 7.05
Phoenix-EARN 6,301 66 4,133 7.46
Yakima-PFP 4,829 73 3,530 7.75
Chicago-Maximus 4,622 78 3,605 6.98
Averages 5,904 61 3,514 7.09
Note:  NA = not available.

Some WtW programs--most notably Philadelphia-TWC and Fort Worth-ANS--explicitly targeted WtW-eligible clients with little or no work experience, low literacy or numeric skills, and other substantial barriers to employment (such as homelessness). These programs aimed to serve some of the most disadvantaged WtW-eligible people, and differences in their placement rates are consistent with such targeting strategies.

Conversely, those WtW programs that targeted the relatively job-ready among WtW-eligible people achieved higher placement rates. For example, the Boston employer partnership programs screened applicants for interest and skill. Participants had to apply for the programs and meet minimum literacy requirements. Thus, because of the nature of these programs, their participants may have been somewhat less disadvantaged and more motivated than other WtW-eligible people.

Differences in placement rates or costs per placement should not be equated with program success or effectiveness, however.Previous research has shown that achieving one placement of a harder-to-serve participant may create greater impacts than one placement of a relatively job-ready participant.(14) Thus, despite the lower average placement rates for programs targeting the hardest-to serve WtW-eligible participants, the greatest benefits of WtW may lie in achieving success with this population.

Endnotes

1.  Factors that affected enrollment are discussed in detail in other evaluation reports: Fender et al. 2001; Nightingale et al. 2002; Nightingale 2001; Perez-Johnson et al. 2000; and Perez-Johnson and Hershey 1999. Congress modified the WtW legislation in 1999 as part of the Fiscal Year 2000 Appropriations legislation for the Departments of Labor, Health and Human Services, Education, and related agencies, to expand WtW eligibility.

2.  In Table II.2, both JHU programs appear not to offer job readiness and pre-employment case management services, as their allocation of total costs to these activities is shown as zero. Most JHU program services were similar to those that other WtW programs offered. The main distinction of the JHU programs was that the staff generally (but not always) began working with WtW participants after they secured unsubsidized employment. Thus, most program costs were allocated to postemployment followup.

3.  An important exception was WtW participants who are noncustodial parents of children on TANF. Since these individuals usually are not TANF recipients themselves, they do not qualify for TANF-funded transitional benefits. The potential cost implications of serving more noncustodial parents can be seen somewhat in the differences in WtW support service costs across the Yakima WtW programs (Table II.2). Support services accounted for eight percent of total costs for Yakima-PFP, which targeted noncustodial parents. In contrast, support services accounted for half that amount in the two other Yakima programs, which did not serve, or served far fewer, noncustodial parents.

4.  For example, Nashville-Pathways could provide bus passes or gas reimbursement for 3 months out of a 12-month period for those in job readiness or work experience, among various other supportive services or payments.

5.  See Nightingale et al. 2002.

6.  Seventy-six percent of those individuals ever active during TWC's cost analysis year participated in transitional work during this same period.

7.  Other participants received retention services only, but they still figure in the calculation of average costs for the programs.

8.  The per-participant costs for these two WtW programs also could have been lower for other reasons. As in Philadelphia-TWC, the Chicago-Easter Seals work experience component integrated job readiness and case management activities. It was much shorter, however (four weeks maximum instead of six months maximum). Reportedly, the Chicago-Catholic Charities staff did not interact as often with WtW participants in work experience, who were only required to attend a weekly job club while in paid work experience activities.

9.  During the cost analysis year, the West Virginia-HRD program placed 228 participants in unsubsidized jobs and spent about $110,000 on wage supplements, for an average wage supplement cost of $480 per participant placed in unsubsidized employment. Supplements were reduced over three eight-week intervals--bringing the wage up to $7.75 per hour for the first eight weeks, $6.80 for the second eight weeks, and $5.80 for the third eight weeks.

10.  During its cost analysis year, TWC paid $258,200 in retention bonuses to 498 participants. Program records indicated that 69 percent of the TWC participants who had been placed in unsubsidized jobs by the end of the cost analysis year had received a first bonus, 48 percent had received a second bonus, and 32 percent had received a third bonus.

11.  The JHU programs (Florida and Maryland) are excluded from this discussion because of their postemployment focus. JHU staff helped WtW participants secure unsubsidized jobs if they lost their original positions or were ready to advance to better positions. Initial placement in unsubsidized employment was not a primary program objective, however.

12.  Based on the Bureau of Labor Statistics' average yearly rates for 2000 in each program's Metropolitan Statistical Area (www.bls.gov/lau/laumatch.htm).

13.  Participants across the WtW evaluation sites were similar in prevalence of recognized barriers to employment, such as low levels of education and physical or mental disabilities (Nightingale 2002). In any given evaluation site, however, individual WtW programs could have reached out to relatively more or less disadvantaged participants.

14.  See, for example, Scrivener et al. 1998; Maxfield 1990; and O'Neill 1990.

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