This paper explores whether programs in the National Evaluation of Welfare-to-Work Strategies (NEWWS) helped welfare recipients attain employment stability and earn more over time. These outcomes (defined in greater detail below) are important prerequisites for achieving long-term self-sufficiency and have served as goals of welfare-to-work programs past and present. The need for programs to promote stable employment and earnings growth has grown stronger since passage of PRWORA, which imposes time limits on most families’ eligibility to receive federally funded welfare benefits. Further, as welfare caseloads continue to fall, administrators and policy makers face the greater challenge of achieving these goals when working with recipients with more serious barriers to employment and at greatest risk of exhausting their eligibility to receive benefits.
To meet the challenges of welfare reform, state and local administrators and policy makers require solid information on the types of welfare-to-work programs that help people maintain steady employment over several years and earn more over time. This paper helps address this need by describing useful ways of measuring employment stability and earnings growth and by analyzing the effects of ten welfare-to-work programs on these measures over a four-year followup period. The paper also describes ways of measuring unstable or sporadic employment and estimates program effects on these measures. Welfare recipients who work sporadically may benefit from additional pre- or post-employment services or financial incentives provided by welfare agencies. Results are presented for ten programs operated in six sites: Atlanta, Georgia; Columbus, Ohio; Detroit and Grand Rapids, Michigan; Portland, Oregon; and Riverside, California. Welfare recipients who enrolled in these programs were required to participate in employment-related activities and could incur financial sanctions (reductions in welfare benefits) for noncompliance.
Four programs (Atlanta, Grand Rapids, and Riverside Labor Force Attachment and Portland) were employment-focused. They encouraged rapid entry into the labor market in the hope that enrollees would work their way up to better jobs. The three Labor Force Attachment (or LFA) programs advocated work most strongly among the 10 programs. LFA program staff assigned nearly all enrollees to job clubs as their first activity and stressed the value of working even at low-wage jobs as a first step toward self-sufficiency. Portland’s program, in contrast, encouraged enrollees to look for jobs that paid above minimum wage and offered potential for advancement. In addition, Portland’s case managers had more discretion to assign some enrollees to skill-building activities as their first activity, although these activities were short-term and aimed at increasing employability. Program administrators in Portland hoped that these features would improve targeting of services: enrollees who would benefit from job search would go to job search; enrollees who would benefit from basic education would go to basic education.
The other six programs (Atlanta, Grand Rapids, and Riverside Human Capital Development, Columbus Integrated and Traditional, and Detroit) were education-focused. These programs sought to increase enrollees’ skills and credentials before they looked for work. Over time, welfare recipients in the education-focused programs were expected to make up for forgone earnings by obtaining more jobs or higher-quality jobs than they could have obtained on their own.
As discussed in previous reports and papers, the NEWWS Evaluation uses a rigorous experimental design based on random assignment to estimate program effects. The paper compares the employment experiences of program group members to those of control group members, who were precluded from these programs’ employment-related services and were not subject to the programs’ mandatory participation requirements.
The paper discusses program control group differences, or impacts, on several indicators of employment stability and earnings growth. The paper also considers whether employment- or education-focused programs produced positive effects for sample members who entered the program with one or more serious barriers to employment, as well as for more job-ready sample members.
It is important to keep in mind that any effects on employment stability and earnings growth were produced solely from programs’ pre-employment services, messages, and mandates. In contrast to many programs that operate today, programs in NEWWS did not impose time limits on welfare eligibility and did not offer post-employment services to sample members who found jobs.
The difference is especially pronounced in Riverside and Portland. Currently, the welfare departments in these sites provide case management services and arrange for vocational training for welfare recipients who find jobs. Nonetheless, the results for NEWWS remain important. The mandatory character of the programs in NEWWS and their pre-employment services and messages are similar to those operated today. Furthermore, to the extent that these programs did make a difference (especially for welfare recipients facing serious barriers to employment), the need for additional pre- or post-employment services or financial incentives will be that much smaller. (author abstract)