Understanding the Costs of the DOL Welfare-to-Work Grants Program. Sources of Cost Variation Go Beyond Program Model, Scale, and Duration of Participation


The WtW process evaluation identified three basic program models, representing distinct employment philosophies and approaches to providing WtW services.(5) As a starting point for our analyses, we classified the WtW programs into these same model categories (Table III.2):

· Enhanced Direct Employment (EDE). These WtW programs focused on moving WtW participants into unsubsidized employment as soon as possible. They were "enhanced" because, unlike traditional "rapid attachment" interventions, they complemented placement services with pre-employment job readiness activities, individualized counseling and support, and extended followup after employment. Among the programs included in the cost analysis, another distinguishing characteristic of enhanced direct-employment programs was that they helped their WtW participants gain access to a wide range of locally available employment opportunities.

· Transitional Employment (TE). These programs tried to gradually and systematically improve their participants' employability. Their objective was for participants to ultimately--not immediately--obtain unsubsidized employment. The WtW programs in the cost analysis used three distinct approaches to this systematic building of employability skills:

  1. Paid Work Experience. In some transitional programs, WtW clients were generally expected to participate in work experience as an intermediate step before unsubsidized employment.
  2. Employer-Tailored Programs. Some transitional programs were tailored to the needs or expectations of particular employers. These programs aimed to help participants develop the skills necessary for jobs with a given employer or a group of employers with similar characteristics.
  3. Small Steps. Only one of the WtW programs in the cost analysis used this approach, which was distinct from other transitional programs. The Nashville-Pathways program did not have participants follow a particular sequence of activities, nor did it offer an explicit menu of WtW services. Instead, case managers and participants together identified a highly individualized set of employment-related objectives and activities for the participant to pursue. Importantly, "small steps," such as time spent arranging child care or resolving housing issues, were counted as WtW activities and helped participants meet their TANF work activity requirements.
Table III.2
Average Costs per Participant, Average Duration, and Scale of Operations for Wtw Programs, by Model
WtW Site/Program Average Cost per Participant Average Duration of Participation
(in Months)
Participants Ever Active During Cost Analysis Period
Enhanced Direct-Employment Programs
Fort Worth-Women's Center $1,887 13.0 200
Fort Worth-ANS $2,365 12.0 91
Chicago-E&ES $3,392 5.2 1,180
Yakima-PFP* $3,530 9.5 251
Chicago-Maximus $3,605 4.5 946
West Virginia-HRD* $3,771 8.1 479
Phoenix-EARN $4,133 11.0 529
Yakima-OIC* $4,433 9.7 154
Yakima-FWC* $4,912 9.8 161

Model Mean

$3,559 9.2 443
Transitional Work Experience Programs
Chicago-Easter Seals* $3,087 5.4 291
Chicago-Catholic Charities* $3,310 7.6 763
Philadelphia-TWC* $6,641 6.5 2,178

Model Mean

$4,346 6.5 1,077
Transitional Employer-Tailored Programs
Boston-Marriott $2,308 12.0 87
Boston-Partners $5,407 10.0 90
Chicago-Pyramid* $5,826 6.1 223

Model Mean

$4,513 9.4 133
Transitional "Small Steps" Programs
Nashville-Pathways* $1,964 8.6 869
Model Mean $1,964 8.6 869
Postemployment Skills Development Programs
JHU-Florida $2,167 8.0 148
JHU-Maryland $2,189 9.9 213
Model Mean $2,178 9.0 181
Note: * = WtW programs that offered paid work experience.

. Postemployment Skills Development (PSD). The two JHU programs in the cost analysis emphasized supporting WtW participants after they had secured an unsubsidized job. They focused on providing services and assistance to help participants retain unsubsidized employment and advance to better jobs, in the hope of improving their prospects for long-term self-sufficiency.

On average, differences in the cost per participant of WtW programs were in the direction their model classifications would suggest. PSD programs aimed to serve primarily people who had already found jobs, and thus focused exclusively on postemployment services. They cost less per participant, on average, than EDE and TE programs, which provided both pre- and postemployment services (Table III.2). Similarly, EDE programs, which emphasized a quick entry into unsubsidized employment, were less costly, on average, than TE programs, which emphasized more gradual, systematic acquisition of employability skills.

Costs varied considerably, however, among programs in any given model. As a result, some EDE programs could cost less, as much, or more than some TE programs (Table III.2). Similarly, PSD programs were not cheaper than all EDE or TE programs. For programs belonging to the same WtW model, average costs per participant were not necessarily lower if they operated on a larger scale or had lower average durations. This suggested that factors other than program model, scale of operations, or overall duration of participation contributed to the cost differences across WtW programs.

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