Understanding the Costs of the DOL Welfare-to-Work Grants Program. Urbanicity and Prevailing Unemployment Rates Had No Obvious Effect on Costs per Placement

08/01/2002

The local economy can influence many aspects of a program, such as the choice of service strategies, operating expenses, and its ability to place participants in employment. However, differences in urbanicity and unemployment rates for the areas the WtW programs served were not strongly associated with differences in costs per placement, placement rates, or costs per participant across WtW programs (Table III.8).

The cost analysis periods examined were generally periods of relative prosperity, strong economic growth, and strong labor markets. Most of the WtW programs in the cost analysis operated in urban areas that, in 2000, had low unemployment, averaging 3.4 percent.(12) As expected, higher average unemployment rates for the WtW programs operating in rural areas suggested that these programs faced somewhat less prosperous economic conditions. However, these did not appear to lead to higher costs per placement for these programs. Despite serving a rural area with relatively high unemployment (10.6 percent), the Yakima programs achieved relatively high placement rates (50 to 73 percent) and thus, in general, more modest costs per placement ($4,829 to $8,762).

Table III.8
Wtw Costs per Placement by Urbanicity of Service Area
WtW Programs, by Urbanicity of Service Delivery Area Cost per Placement (in Dollars) Placement Rate (Percent) Cost per Participant (in Dollars) Unemployment Rate (Percent) (a) Average Starting Hourly Wage
(in Dollars)
Rural
West Virginia-HRD 6,182 61 3,771 8.0 (b) 5.84
Yakima-OIC 8,762 51 4,433 10.6 7.40
Yakima-FWC 8,065 61 4,912 10.6 7.07
Yakima-PFP 4,829 73 3,530 10.6 7.75
Averages 6,960 62 4,162 9.9 7.02
Urban
Fort Worth-ANS 7,725 33 2,365 3.2 NA
Chicago-Catholic Charities 8,339 40 3,310 4.2 7.00
Philadelphia-TWC 13,778 48 6,641 4.0 7.26
Chicago-Easter Seals 5,758 54 3,086 4.2 6.64
Boston-Partners 8,192 66 5,407 2.2 8.98
Boston-Marriott 3,251 71 2,308 2.2 9.67
Chicago-Pyramid 8,037 73 5,827 4.2 7.43
Fort Worth-WC 5,241 42 1,887 3.2 NA
Nashville-Pathways 3,685 53 1,964 2.8 7.19
Chicago-E&ES 5,453 62 3,392 4.2 7.05
Phoenix-EARN 6,301 66 4,133 2.7 7.46
Chicago-Maximus 4,622 78 3,605 4.2 6.98
Averages 6,699 57 3,661 3.4 7.57
Note:NA = not available.
a. Average unemployment rate in 2000, by Metropolitan Statistical Area.
b. Average across 29 service counties, weighted by proportion of WtW participants from each county.

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