Understanding the Costs of the DOL Welfare-to-Work Grants Program. WtW Costs Reflect Targeting of Hard-to-Employ Individuals


WtW programs as a whole represent a targeted effort to meet the needs of hard-to-employ individuals. After passage of PRWORA, Congress expected that some individuals would need intensive assistance to secure employment and make strides toward self-sufficiency. Hence, WtW funds were made available to supplement the work-first efforts of welfare agencies.

Some earlier employment programs intentionally omitted, or at least did not focus on, the hard to employ, and this difference accounts in part for their lower costs. For example, WIN programs--which, on average, cost $2,147 per participant, compared to $3,607 for WtW--targeted the most employable AFDC recipients (Figure IV.1). Even when program registration mandates applied more broadly, many individuals were deferred from participation due to transportation, health, or other problems (Levitan et al. 1971, Pacific Consultants 1976; and O'Neill 1990). Moreover, when program openings were scarce, priority was often given to the most employable.

Figure IV.1
Range of Average Costs per Participant for Wtw and Comparable Programs

Range of Average Costs per Participant for Wtw and Comparable Programs

Table IV.1
Costs of Work-focused Welfare Programs Comparable to WtW
Year Implemented Program Model:
Summary of Service Strategy
(Number of Sites Included in Evaluation)
  Average Cost
per Participant
Range (in dollars) Mean (in dollars)
WIN Programs
1967 WIN I: basic education, vocational training, unpaid work experience, some OJT, monthly stipends (4 sites) 2,868-4,106 3,384
1971 WIN II: mostly job placement; some OJT, unpaid public service employment, and vocational training (national mean) 2,014-2,926 2,470
1981 WIN: mostly job search and unpaid work experience (7 sites) 221-902 502
1985 WIN Balanced: employment services, basic education, vocational training, counseling (4 sites) 1,350-3,171 2,230
  Overall mean 2,147

JOBS Programs

1988 JOBS Two Tracks: employment or education (3 sites) 1,930-4,098 2,669
1989 GAIN: emphasized education (6 sites) 3,278-6,971 4,573
1993 JOBS labor force attachment: mostly placement assistance (3 sites) 1,302-3203 2,131
1993 JOBS human capital: mostly basic education and vocational training (3 sites) 3,196-4,914 3,934
  Overall mean 3,327


1971 Supported Work: highly structured paid work experience, job search training, and placement assistance (13 sites) Not available 11,572
1983 MFSP: mostly basic education and vocational training, plus supportive services (4 sites) 3,774-6,796 5,245


1998 WtW Enhanced Direct Employment with Work Experience (West Virginia-CEP and Yakima-FWC, PFP, and OIC) 3,530-4,912 4,162
1988 WtW Enhanced Direct Employment (Chicago-ES&S and Maximus; Fort Worth-ANS and Women's Center) 1,187-4,133 2,182
1998 WtW Transitional Employer-Tailored (Boston-Marriott and Partners, Chicago-Pyramid) 2,308-5,827 4,154
1998 WtW Transitional Work Experience (Chicago-Easter Seals and Catholic Charities, Philadelphia-TWC) 3,086-6,641 4,346
1998 WtW Transitional "Small Steps" (Nashville-Pathways) Not applicable 1,964
1998 WtW Postemployment Skills Development (JHU-Florida and JHU-Maryland) 2,167-2,189 2,178
  Overall mean (18 individual programs) 3,607
Sources: Levitan et al. 1971; Pacific Consultants 1976; Hollister et al. 1984; Handwerger and Thornton 1988; O'Neill 1990; Maxfield 1990; Scrivener et al. 1991 and 1998; Riccio et al. 1994; Hamilton et al. 1997; Storto et al. 2000; and Farrell et al. 2000.
Notes: All costs are reported in year 2000 dollars. Calculations of mean costs are based on available program evaluations.
Estimates for WIN job search, WIN balanced, and demonstration programs include child care costs, which were minor (likely under 10 percent per participant for WIN). Child care costs have been excluded from the remaining comparative programs, since our WtW estimates do not include child care assistance available to WtW participants through TANF or other sources. Costs for other supportive services (mainly transportation) have been included for all programs.
OJT = on-the-job training.

Expansion of target populations has been reflected in increased costs. Over time, programs to increase employment among welfare recipients have broadened the populations they serve. Instead of focusing on the immediately employable only, groups were included that had less work experience or more potential barriers to employment (such as limited education and longer welfare spells). For example, JOBS programs were specifically required to focus on long-term AFDC recipients, not just on the most employable recipients. Costs were higher than for the earlier WIN programs, averaging $3,327, even when, in practice, many hard-to-employ individuals were still exempted from participation.(2)

Differences in target population, however, do not fully explain program cost differences. WtW programs explicitly targeted the most disadvantaged TANF recipients, including many who might have been exempted from JOBS participation requirements, yet average WtW costs were similar to the average costs of JOBS programs (Figure IV.1). Moreover, WtW costs were substantially lower than those for programs operated as part of the National Supported Work Demonstration ($11,572), which also targeted hard-to-employ individuals. The reason for these apparent discrepancies is that the differences between WtW and both JOBS and Supported Work also reflect important differences in the services offered or emphasized.

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