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Congress established the Welfare-to-Work (WtW) grants program under Public Law 105-33, the Balanced Budget Act (BBA) of 1997.(1) Its purpose was to provide additional resources to supplement the welfare reform funds included in the Temporary Assistance for Needy Families (TANF) block grants to states, which were authorized under Public Law 104-193, the Personal Responsibility and Work Opportunity Reconciliation Act (PRWORA) of 1996.(2) The federal WtW funds were distributed by the U.S. Department of Labor (DOL) to state and local grantees in 1998 and 1999. Initially, grantees were expected to spend the funds within three years of their receipt, but amendments in 1999 (Public Law 106-113) extended the period to five years.(3)
When it established the WtW grants program, Congress also mandated that it be evaluated. Under contract with the U.S. Department of Health and Human Services (DHHS), Mathematica Policy Research, Inc. (MPR), along with its subcontractors the Urban Institute and Support Services International, is conducting that evaluation to document implementation of programs funded by the grants in states and localities across the nation and to analyze outcomes for participants. This is the first in a series of reports on the analysis of participant outcomes. It describes the individuals who participated in grant-funded programs in terms of the following:
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The WtW grants program was to serve the hardest-to-employ and help them obtain employment that could ultimately result in long-term economic independence. Federal rules governing the program specified that its objectives were:(4)
Congress recognized that certain populations and certain high-poverty areas might require higher investments of resources over a longer period of time than the regular welfare caseload. Long-term services to achieve economic self-sufficiency were encouraged — beginning a job, either subsidized or unsubsidized, was assumed to be just the first step. WtW funds were also to target individuals in need of intensive services: long-term welfare recipients, high school dropouts, substance abusers, and those approaching their TANF time limits. In addition, WtW programs could serve noncustodial parents with severe employment problems.
To address the employment and service needs of such a diverse target population, WtW grants could fund a broad range of employment services. The program activities that WtW funds were intended to support, as specified in section 5001(C)(i) of the BBA, were:
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In addition, the 1999 amendments expanded this list of allowable activities to include up to six months of vocational education or job training.
Congress authorized $3 billion — $1.5 billion in FY 1998 and $1.5 billion in FY 1999 — for the WtW grants program, and included specific provisions about how the WtW funds were to be distributed. Most of the funds were distributed through competitive and formula-based grants.(5)
While DHHS administers TANF at the national level, DOL administers the WtW program, but the latter was implemented within the context of welfare reform. Achieving the primary objectives of the WtW grants programs — targeting welfare recipients with the most serious difficulties and providing them with services to help them succeed in the job market — required that local programs funded by the grants reflect an understanding of the welfare policies and programs in their communities and include arrangements for interacting with them.
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The WtW grants and the programs funded by them were to complement and supplement — but not duplicate — states' TANF funds and work programs. The federal TANF legislation enacted in 1996 solidified a trend among states to replace the former welfare system under the Aid to Families with Dependent Children (AFDC) program, which was based primarily on income transfers and benefit entitlements, with a work-based system of temporary public assistance. Welfare reform changed the nation's social assistance system in several ways, and shifted the focus to employment, which influenced the manner in which WtW grant-funded programs were implemented.
First, states have substantial flexibility in implementing TANF, meaning policies and programs vary considerably across states. States determine how to use their TANF block grant to fund cash assistance, work-related services, and other supports for low-income families with children. States also decide what types of work requirements are imposed on recipients and which individuals are subject to these requirements (within federal parameters). In contrast, the WtW legislation includes very specific provisions about who is eligible, and funds were specifically earmarked for employment services and could not be used for cash assistance payments. TANF recipients are the primary target group for WtW-funded services and are subject to state-determined welfare policies, which means WtW programs and participants must follow those policies.
Despite the flexibility states have, however, federal law specifies that federally funded welfare payments can only be temporary. More specifically, welfare is intended to be a short-term step toward securing employment and self-sufficiency. Unlike AFDC, TANF provides short-term assistance only — federal law stipulates that individuals can receive federal cash assistance for a maximum of 60 months in their lifetime, but states can opt to institute shorter time limits. Nearly all recipients of federally funded TANF cash assistance are, therefore, subject to a time limit. Some states, though, have decided to use state funds, rather than federal funds, to pay for some cash benefits, which allows them to extend the five-year time limit.
Congress underscored the emphasis on work by requiring states to meet steadily increasing requirements for the percentage of their TANF cases that must be engaged in unsubsidized employment or work-related activities. States were to have 45 percent of their caseload participating in work activities in fiscal year 2001 and 50 percent in 2002. To meet these goals, most state TANF policies stress job search activities and encourage or require recipients to find employment rapidly, rather than provide education or training.
The legislative and program changes in welfare contributed to a dramatic decline in caseloads. The welfare rolls, which began to shrink in the mid-1990s, continued to decline after the passage of PRWORA and the BBA. The number of cases receiving cash assistance under AFDC (and later TANF) decreased from 5.05 million in January 1994 to 2.01 million in July 2002, according to reports by DHHS (2003).(6) Prior research suggests the caseload reduction was due to a combination of the continuing strong national economy and the welfare reform policies that emphasize employment (see, for example, Wallace and Blank 1999).
Congress enacted the WtW grants program to complement state welfare reform policies by concentrating additional resources on parents who were particularly disadvantaged and likely to have the greatest difficulty finding and holding a job. The BBA gave authority to DOL to administer the WtW grants program, and local workforce investment boards (WIBs) have primary operational responsibility. In effect, at the local level, the job of moving welfare recipients into employment is shared by human services agencies responsible for TANF and its work programs, and the workforce development system, which oversees WtW grant programs.
Congress established eligibility criteria and spending rules for WtW grants to ensure that the funds were used primarily for individuals who had specific disadvantages in the labor market. As originally enacted, the BBA required that WtW grantees spend at least 70 percent of their grant funds on long-term TANF recipients or recipients within a year of reaching a TANF time limit, or noncustodial parents of children in a long-term TANF case. These individuals were further required to display two of three specific problems affecting employment prospects: (1) lack of a high school diploma or GED and low reading or math skills, (2) a substance abuse problem, and (3) a poor work history. The remaining funds, no more than 30 percent of the grant, could be spent on people who met less stringent criteria: TANF recipients (or noncustodial parents of TANF children) who had characteristics associated with long-term welfare dependence, such as being a school dropout or a teen parent, or having a poor work history.
As WtW grant programs were being implemented beginning in 1998, it became clear that the combination of the strict eligibility criteria and the "70-30" spending requirement were contributing to slow enrollment. In response, 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.(7) While the amendments left in place the requirement that 70 percent of WtW funds be spent on a defined category of participants, they broadened the population in two ways to make it easier for TANF recipients and noncustodial parents to qualify for WtW services under the 70 percent category:
The definition of the 30 percent category was also broadened to include youth who have received foster care, custodial parents (regardless of TANF status) with incomes below the poverty level, and TANF recipients who faced other barriers to self-sufficiency specified by the local WIB.
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The evaluation of the WtW grants program has four core components:
In addition to the four-part core evaluation, a special process and implementation study focuses on tribal programs. It documents welfare and employment systems operated by American Indian and Alaska Native WtW grantees, the supportive services they provide, and how these tribal grantees integrate funds from various sources to move members from welfare to work (Hillabrandt and Rhoades 2000; Hillabrandt et al.2001).
Originally this evaluation was to estimate the net impacts of the WtW grants program on participants, based on an experimental design, and then use those estimates to analyze the program's costs and benefits. However, enrollment in the local programs funded by the WtW grants proceeded much more slowly than expected (Nightingale et al. 2002). With the difficulties that service providers were experiencing in achieving their enrollment goals, they were uniformly unwilling to allow the random assignment of enrollees to treatment and control groups, as would be required under an experimental evaluation design.(8)
Given the impossibility of a rigorous experimental approach to estimating program impacts, DHHS consulted with its partners in the evaluation's interagency work group — DOL, the Department of Housing and Urban Development, and the Office of Management and Budget (OMB) — and with Mathematica Policy Research to develop an alternate evaluation design. The resultant design entailed the replacement of the infeasible impact analysis based on random assignment with an outcomes analysis. The alternate design and data collection instruments for all components of the evaluation were submitted to OMB and received formal clearance. A critical implication of this change in the evaluation design is that none of the findings presented in this report on the outcomes analysis should be interpreted as estimates of the net impacts of the local WtW grant-funded programs that participated in the evaluation.
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The findings presented in this report are based primarily on data from two surveys of WtW participants. The first was conducted at the time of enrollment in WtW. Participants completed a two-page background information form at their WtW service provider under the supervision of provider staff. The second survey was conducted as soon as possible after the first anniversary of enrollment in WtW. MPR survey staff conducted the approximately 35-minute interviews either by telephone or in-person using computer-assisted methodologies.(9) This report also includes findings on the employment and earnings of participants during the year prior to WtW enrollment that are based on Unemployment Insurance data from state administrative files. A forthcoming report will include more extensive findings based on state administrative data for Unemployment Insurance, TANF, and other programs.
The data that are the basis for the findings presented in this report were gathered in 11 sites where WtW services were provided under the auspices of ten WtW grantees. Each of the grantees was either the direct recipient of a WtW competitive grant or was a Workforce Investment Board that was participating in the state's formula grant as a subgrantee.(10) One of the grantees, Johns Hopkins University, was responsible for WtW services in two of the study sites. Exhibit I.1 identifies the study sites and the associated grantees.(11) The sites are not strictly representative of the universe of all sites where WtW-funded services were provided; rather, they were purposefully selected to achieve diversity in terms of grantee type, urban versus rural location, local economic conditions, and several other factors as enumerated in the report on this evaluation's implementation study (Nightingale et al. 2002).(12)
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The purpose of this report is to describe the characteristics and subsequent experiences of individuals who enrolled in programs funded by the WtW grants. It documents the characteristics of WtW participants at the time of enrollment and their outcomes over the course of the following year. Future reports on the outcomes analysis will extend the description to include the second post-enrollment year.
Four research questions guided the outcomes analysis and provide the structure for this report. In Chapter II, data from the background information form and state Unemployment Insurance administrative systems are used to answer the question, "Who enrolled in WtW?" In each of the next three chapters, data from the 12-month follow-up survey are used to answer a question regarding the post-enrollment experiences and outcomes of WtW participants. Chapter III answers the question, "What services did WtW enrollees receive?" Chapter IV presents findings pertaining to the key question, "Did WtW enrollees achieve success in the labor market?" Finally, Chapter V answers the question, "How were WtW enrollees faring one year after entering the program?" The answers to these four research questions provide the basis for our conclusions regarding the WtW program, which are presented in Chapter IV.
There will be two additional reports on the WtW outcomes analysis. The next report will be based on data from state administrative files for Unemployment Insurance, TANF, and other assistance programs for the period beginning one year prior to enrollment and ending two years after enrollment. The report will describe time patterns of employment, earnings, and participation in assistance programs by WtW enrollees. The final report on the outcomes analysis will use data from the 24-month follow-up survey, in conjunction with data from the 12-month follow-up survey, to provide comprehensive descriptions of employment patterns over the full two years following WtW enrollment and the well-being of participants and their families at the end of that period.
| Study Site | Grantee | Type of Organization | Enrollmenta | Fundingb (millions) | Distinctive Features of Program Design |
|---|---|---|---|---|---|
| Baltimore Co., MD | Johns Hopkins University, Institute for Policy Studies | Nonprofit Educ. Inst. | 350c | $5c | Workplace liaisons work with employed individuals and their employers to promote retention and help participants move up a career ladder. |
| Boston, MA | Office of Jobs and Community Services, Boston Econ. Dev. and Industrial Corp. | Public agency WIB |
900 | $11.3 | Partnership programs: employers select participants and collaborate with nonprofit partners on employability and skill training. |
| Chicago, IL | Mayor's Office of Workforce Development (MOWD) | Public agency WIB |
8,900 | $60 | MOWD contracts with 26 agencies for case management, training, and support services. |
| Ft. Worth, TX | Tarrant County Workforce Development Board (a.k.a. Work Advantage) | Nonprofit WIB |
350 | $7.2 | Work Advantage contracts with about 10 community-based organizations for rapid work attachment services. |
| Milwaukee, WI | WI Dept. of Corrections, Div. of Comm. Corrections, Region 3 (Milwaukee Co.) | State agency | 850 | $2 | Nontraditional Opportunities for Work (NOW) serves male noncustodial parents on probation or parole. Wisconsin Works (Wisconsin's TANF program) contractors provide employability and job retention services. |
| Nashville, TN | Nashville Career Advancement Center (NCAC) | Public agency WIB |
600 | $4.2 | The Pathways Case Management System entails monthly peer meetings to plan steps to employment, and intensive case management and problem-solving support. |
| Philadelphia, PA | Transitional Work Corporation (TWC) | Nonprofit corporation |
7,500 | $22.4 | Two weeks of job readiness class, followed by six months in a subsidized gov't. or nonprofit job, before placement in unsubsidized employment. |
| Phœnix, AZ | City of Phoenix Human Services Dept., Employment and Training Division | Public agency WIB |
750 | $5.95 | Three weeks of pre-employment preparation, followed by job placement and retention support from career specialists. |
| St. Lucie Co., FL | Johns Hopkins University, Institute for Policy Studies | Nonprofit Educ. Inst. | 350c | $5c | Workplace liaisons work with employed individuals and their employers to promote retention and help participants move up a career ladder. |
| West Virginia (29 counties) | Human Resources Development Foundation (HRDF) | Nonprofit foundation | 650 | $4.9 | Four-week job readiness workshop, followed by graduated-stress supported work experience over six-month period, with skills training where possible. |
| Yakima, WA | Tri-Valley Workforce Development Council | Nonprofit WIB | 800 | $6.4 | Individualized case management, job search assistance, job placement, subsidized work placement, and supportive services. |
1. Public Law 105-33, section 5001, August 5, 1997.
2. ublic Law 104-193, section 103, August 22, 1996.
3. Public Law 106-113, Title VIII, sections 801-807, November 29, 1999.
4. The Employment and Training Administration of the U.S. Department of Labor wrote the final rule for the WtW grants program. They were published in the Federal Register on January 11, 2001, and include on page 2712 the objectives for the program that are cited here.
5. Competitive grants were distributed based on applications to DOL, whereas formula-based grants were allocated to states according to a formula based on each state's share of the poverty population and number of adults on welfare.
6. After bottoming out at 2,006,155 families in July 2002, the U.S. total TANF caseload increased to 2,039,917 families in March 2003, which was the most recent month for which caseload statistics were available at the time this report was being written (DHHS 2003).
7. Public Law 106-113, Title VIII, sections 801-807, November 29, 1999.
8. Under an experimental evaluation design, members of the control group in a study site would have received minimal services or no services and, thus, would have contributed little or nothing toward the achievement of the enrollment goals of service providers in that site.
9. Appendix C provides details on how the surveys were conducted and data were processed. This appendix is not included in this volume, but is available on the MPR website: www.mathematica-mpr.com.
10. The grantees (and the WIBs that were subgrantees) typically did not directly provide services to WtW enrollees; rather, they subcontracted the provision of services to one or more for-profit or not-for-profit organizations in each site.
11. Nightingale et al. (2002), Appendix D, provides a detailed description of each of the study sites.
12. The study sites for the outcomes analysis are the same as for this evaluation's implementation study, with two exceptions: (1) A site in Southeastern Indiana was included in the implementation study but not in the outcomes analysis; and (2) Johns Hopkins University and the multiple locations where it administered WtW services constituted a single site in the implementation study, but its Baltimore County, Maryland, and St. Lucie County, Florida, operations were treated as two distinct study sites in the outcomes analysis.
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