The Cost‐Effectiveness of Welfare‐to‐Work Programs: A Meta‐Analysis

This article uses the tools of meta‐analysis to assess cost–benefit studies of 50 mandatory welfare‐to‐work programs that were targeted at Aid for Families with Dependent Children recipients and evaluated by random assignment. The findings suggest that the costs of a typical evaluated welfare‐to‐work program probably exceeded its benefits from the perspective of the government, but those assigned to the program, and possibly society as a whole, may reap small positive net benefits. However, there are individual programs that are very cost‐beneficial. Further analyses of the determinants of the cost‐benefits of welfare‐to‐work programs to government and society as a whole show that some services are cost‐neutral, but others entail net costs, which are sometimes substantial. The findings suggest that less successful programs might be made more cost‐beneficial by dropping vocational training and basic education as program components, leaving mainly lower cost components, such as mandated job search and sanctions, but also possibly the more costly financial incentives.     

The dissemination and utilization of welfare‐to‐work experiments in state policymaking

Abstract This paper reports the results of a telephone survey of state‐level officials as to the influence of evaluations of three state welfare innovations: California's GAIN, New York's CAP, and Florida's Project Independence. The three experiments were known to those interviewed, yet they did not have dramatic, decisive effects on policymaking. However, GAIN and CAP appear to have influenced policymaking in less dramatic and more subtle respects. Much more important than empirical findings about the effects of tested programs was information about how these programs actually operated in the field along with evidence that the policies tested in welfare‐to‐work experiments were logically consistent (that is, there was no obvious reason to think that they would be unsuccessful), could clear federal waivers, and would not encounter major political resistance. © 2000 by the Association for Public Policy Analysis and Management.     

The Impact of Earnings Disregards on the Behavior of Low‐Income Families

This paper investigates the impact of changes in earnings disregards for welfare assistance received by single mothers following welfare reform in 1996. Some states adopted much higher earnings disregards (women could work full‐time and still receive substantial welfare benefits), while other states did not. We explore the effect of these changes on women's labor supply and income using several data sources and multiple estimation strategies. Our results indicate these changes had little effect on labor supply or income. We show this is because surprisingly few women used the earnings disregards. We discuss several explanations for why this might occur.     

Child Care Subsidies and Employment Behavior Among Very‐Low‐Income Populations in Three States

Using merged administrative data from welfare reform evaluations in three states, we estimate the effects of child care subsidy use on the length of time it takes for a welfare applicant to move into substantial employment. Findings show that the use of a child care subsidy during an unemployed or marginally employed spell of welfare receipt is associated with between a 0.6 and 1.7 quarter (or 11% to 34%) reduction in the time to substantial employment in two of the three state samples. The positive influence of subsidy use on transitions to substantial employment is strongest for those welfare applicants with the lowest earnings who are mixing welfare and work prior to subsidy receipt.     

Cream‐Skimming,Parking and Other Intended and Unintended Effects of High‐Powered,Performance‐Based Contracts

As performance‐based contracting in social welfare services continues to expand, concerns about potential unintended effects are also growing. We analyze the incentive effects of high‐powered, performance‐based contracts and their implications for program outcomes using panel data on Dutch cohorts of unemployed and disabled workers that were assigned to private social welfare providers in 2002 to 2005. We employ a difference‐in‐differences design that takes advantage of the fact that contracts gradually moved from partial performance‐contingent pay to full (100 percent) performance‐contingent contracting schemes. We develop explicit measures of selection into the programs and find evidence of cream skimming and other gaming activities on the part of providers, but little impact of these activities on program outcomes. Moving to a system with contract payments fully contingent on performance appears to increase job placements, but not job duration, for more readily employable workers.     

Federal constraints and state innovation: Lessons from Florida's family transition program

Prevailing wisdom holds that limiting the federal role in welfare will free the states to be more innovative in welfare‐to‐work programs. Findings from Florida's Family Transition Program (FTP), a pilot welfare reform initiative, however, suggest that the relationship between federal “strings” and state innovation is more complex. A central feature of the welfare‐to‐work program in the FTP was the direct result of federal requirements imposed by the Department of Health and Human Services during waiver negotiations. Federal regulation, in this case, promoted innovation. Outcome‐orientation, media and political attention, and fiscal structure are argued to be potentially important factors structuring the impact of federal regulation on state innovation. ©1999 by the Association for Public Policy Analysis and Management.     

WORKFARE IN THE 1980s: SUCCESSES AND LIMITS

Between 1981 and 1987 twenty-eight states experimented with workfare programs. By requiring mandatory community service from welfare recipients, the states hoped to reduce welfare caseloads as well as increase community service. Based in part on those program experiences, Congress included the first national workfare requirement in the 1988 welfare reform package (the Family Support Act). This study is the first to attempt to evaluate the implementation and impact of workfare on a national basis. A pooled, cross-section, longitudinal model is used to estimate the effect of workfare on AFDC caseloads. Despite the low level of state-level implementation, the evidence suggests that workfare may have contributed to welfare caseload reductions in the 1980s.     

The long‐term effects of housing assistance on work and welfare

This paper examines the long‐term effect of project‐based housing assistance—public housing and private assisted housing—on work, earnings, and welfare receipt. We use the Panel Study of Income Dynamics–Assisted Housing Database to identify women ever living in project‐based assisted housing and to create comparison groups using propensity scores. Analyses show no evidence that moving into this type of assisted housing is associated with sustained reductions in employment rates, work hours, or earnings. Although welfare rates decline, they remain higher for assisted housing recipients compared with nonrecipients. Overall, these findings align with those of recent experimental and nonexperimental studies that include other forms of housing assistance and cover different time periods. © 2009 by the Association for Public Policy Analysis and Management.     

The long‐term effects of public housing on self‐sufficiency

Recent years have witnessed an intensification of the debate about the fundamental purpose of public assistance to the poor and the effects of these programs on children. This study uses enriched data from the Panel Study of Income Dynamics to examine the effects of living in public housing as a child at some point between 1968 and 1982 on four young adult outcomes: welfare receipt; individual earnings; household earnings relative to the federal poverty line; and employment. Living in public housing during childhood increased employment, raised earnings, and reduced welfare use, but had no effect on household earnings relative to the poverty line. The beneficial effects could have arisen because public housing improved physical living conditions, reduced residential mobility, or enabled families to spend more of their income on items that benefit children's development. Whether these effects apply to contemporary public housing is unknown. © 2002 by the Association for Public Policy Analysis and Management.     

The implications of differences between employer and worker employment/earnings reports for policy evaluation

Differences in administrative (UI) and survey (S) records on employment and earnings have substantial implications for assessing the impact of a variety of public interventions, such as welfare‐to‐work and employment training programs, and especially the state‐oriented welfare reform legislation of 1996. We use data from the 1998 and 1999 waves of the Child Support Demonstration Evaluation (CSDE) Resident Parent Surveys to explore individual differences between survey and UI employment and earnings reports for a Wisconsin sample of current and former welfare recipients. After exploring the potential causes of misreports from both sources, we document the degree of discrepancy between survey and UI earnings and employment measures and assess the difference between the two earnings measures in estimates of simple human capital (earnings) functions. Last, we evaluate the correspondence of the two measures with “hardship” indicators of economic well‐being.     

Incentivizing self‐regulation: Federal vs. state‐level voluntary programs in US climate change policies

How does program sponsorship influence the design of voluntary programs? Why and how do voluntary programs on climate change sponsored by the state and federal governments in the United States vary in their institutional design? Scholars emphasize the signaling role of voluntary programs to outside stakeholders, and the excludable benefits that induce firms to take on non‐trivial costs of joining voluntary programs. Scholars have noted several types of benefits, particularly reputational benefits programs provide, but have not systematically studied why different programs emphasize different types of benefits. We suggest that excludable benefits are likely to take different forms depending on the institutional context in which program sponsors function. We hypothesize that federal programs are likely to emphasize less tangible reputational benefits while state programs are likely to emphasize more tangible benefits, such as access to technical knowledge and capital. Statistical analyses show the odds of a voluntary program emphasizing tangible benefits increases by several folds when the program is sponsored by the state as opposed to federal government.     

Incentives,challenges, and dilemmas of TANF: A case study

This paper compares the incentives inherent in TANF (Temporary Assistance for Needy Families), the U.S. welfare system in place after the 1996 reforms, with those of TANF's predecessor, AFDC (Aid to Families with Dependent Children), using the experience in one state, Wisconsin, as an example. Is the new program successful in avoiding the “poverty trap” of the old welfare system, in which the marginal tax rates imposed on earnings and benefits were so high that they discouraged work effort outside a narrow earnings range? As women receiving assistance begin working more hours and earning more, income‐conditioned benefits (Food Stamps, EITC, Medicaid, and subsidies for child care) are reduced and withdrawn, in effect constituting a “tax” on earnings. Under TANF, there is more support for these families, at least in Wisconsin, and so economic well‐being should be higher for most women with earning in this range than it was under AFDC. But marginal tax rates under TANF remain high, and in some income ranges they are higher than under AFDC. Once in the work force, former TANF recipients have earnings over the long run that expose them to very high marginal tax rates, which decrease the benefits of working harder and make it very difficult to gain full eonomic independence. Evidence from other sources suggest that most low‐skilled women have earnings in the same range and so are likely to face similar reductions in benefits such as child care subsidies or the EITC as their earnings increase, even if they are not receiving welfare‐related benefits. © 2002 by the Association for Public Policy Analysis and Management.     

Welfare and child support program knowledge gaps reduce program effectiveness

There is little research on knowledge of the policy rules that could affect individuals, either in general or in evaluations of new programs. The lack of research is surprising, given that knowledge gaps could limit the effectiveness of reforms or lead to incorrect inferences regarding the effects of a policy change. In this article, we use survey data to examine the level and sources of welfare participants' policy knowledge in the context of a substantial change in child support and welfare policy in Wisconsin. We find very low levels of knowledge of child support policy rules. Multivariate analyses suggest that people tend to learn policy rules by experience; we find less consistent support for knowledge being primarily imparted through interactions with caseworkers. A difference‐in‐difference analysis suggests that if participants had been more knowledgeable, program impacts would have been larger. Implications of this research for policy implementation and policy evaluations are discussed. © 2007 by the Association for Public Policy Analysis and Management     

Con a voluntary workfare program change the behavior of welfare recipients? new evidence from washington state's family independence program (FIP)

This article examines a voluntary workfare demonstration program in Washington state—the Family Independence Program (FIP)—designed to encourage longer-term investments in employment and training (E&T) activities, with the ultimate objective of achieving economic self-sufficiency for welfare recipients. A unique longitudinal data set is used to compare E&T enrollment and the labor market and welfare outcomes for a sample of FIP clients and a comparison group of Aid to Families with Dependent Children (AFDC) recipients subject to the state's mandatory workfare requirements. Correcting for self-selection, the estimates obtained indicate that FIP's combination of financial incentives, enhanced support services, and a more client-centered environment results in an E&T enrollment rate that is from 9 to 12 percentage points higher during the post-FIP June 1989 to May 1990 period than the rate for respondents subject to the state's workfare program. Relative to the enrollment rate calculated for nonparticipants, FIP net impact estimates in this range represent a 33 to 44 percent increase in E&T enrollment. These results offer a more positive assessment of the potential of a voluntary workfare program to affect the behavior of welfare recipients than does the large-scale FIP evaluation carried out by the Urban Institute. However, both the evidence presented here and the Urban Institute's evaluation suggest that FIP had little impact on employment and earnings but significantly increased welfare receipt and the level of welfare benefits.     

Information Shocks and the Take‐Up of Social Programs

The causes of participation in social programs have been studied extensively, with prominent roles found for program rules and benefits. A lack of information about these programs has been suggested as a cause of low participation rates among certain groups, but it is often difficult to distinguish between the role of information sharing and other features of a neighborhood, such as factors that are common to people of the same ethnicities or socioeconomic opportunities, or uniquely local methods of program implementation. We seek to gain new insight into the potential role of information flows by investigating what happens when information is disrupted. We exploit rich microdata from Florida vital records and program participation files to explore declines in Women, Infants, and Children (WIC) participation during pregnancy among foreign‐born Hispanics in the “information shock” period surrounding welfare reform. We identify how the size of these reductions is affected by having a high density of neighbors from the same place of origin. Specifically, we compare changes in WIC participation among Hispanic immigrants living in neighborhoods with a larger concentration of own‐origin immigrants to those with a smaller concentration of own‐origin immigrants, holding constant the size of the immigrant population and the share of immigrants in the neighborhood who are Hispanic. We find strong evidence that having a denser network of own‐origin immigrants mediated the information shock faced by immigrant women in the wake of welfare reform.     

Innovation in Welfare Policy: Evaluating State Efforts to Encourage Work among Low‐Income Families1

This article examines what states are doing to help Temporary Assistance to Needy Families (TANF) recipients move into the workforce and become self‐supporting. We first present documentation regarding many different state TANF policies aimed at encouraging work, including benefit structures, time limits, work requirements, sanctions, and work supports. We then discuss how effective these policies are at helping welfare recipients get jobs and increase their income, by reviewing research on each of these elements. We conclude that the TANF program has been effective in increasing employment and decreasing welfare caseloads and expenses, but that this has not resulted in overall income gains for welfare recipients in the long run. We also conclude that the most promising state programs have a strong employment focus combined with focused training and educational opportunities. In addition, we also find that sanctions appear to be harming those most in need of assistance, and therefore that such policies should be reevaluated and refocused.     

Why teens do not benefit from work experience programs: Evidence from brother comparisons

Social scientists' research on the consequences of teenage employment suggests that government programs providing teenagers with work experience should have worked better than they have. One explanation is that the government failed to deliver an otherwise effective treatment. This article considers three alternative explanations. The first is that the apparent benefits of working during the teenage years are illusory, reflecting only unmeasured differences between teens who do and do not work. A second explanation is that the groups targeted by government programs, the disadvantaged, benefit less from working as teenagers. A third explanation asserts that program participants and working teens experience different benefits because they have different employment experiences. Using information on brother pairs, this article examines these issues. It determines that conventional analyses of the returns to teenage employment greatly overstate the benefits poor minority teenagers receive from working. Our results suggest that the mixed success of previous programs is not primarily due to poor implementation or government involvement per se. Rather, these programs have had limited success because, for those teenagers targeted, work experience during the teenage years does not raise future earnings.     

Improving the Implementation and Effectiveness of Out‐of‐School‐Time Tutoring

School districts are spending millions on tutoring outside regular school day hours for economically and academically disadvantaged students in need of extra academic assistance. Under No Child Left Behind (NCLB), parents of children in persistently low‐performing schools were allowed to choose their child's tutoring provider, and together with school districts, they were also primarily responsible for holding providers in the private market accountable for performance. We present results from a multisite, mixed‐method longitudinal study of the impact of out‐of‐school time (OST) tutoring on student reading and mathematics achievement that link provider attributes and policy and program administration variables to tutoring program effectiveness. We find that many students are not getting enough hours of high‐quality, differentiated instruction to produce significant gains in their learning, in part because of high hourly rates charged by providers for tutoring. We identify strategies and policy levers that school districts can use to improve OST tutoring policy design and launch improved programs as waivers from NCLB are granted.     

Has the Clean Air Interstate Rule Fulfilled Its Mission? An Assessment of Federal Rule‐Making in Preventing Regional Spillover Pollution

The Environmental Protection Agency developed the Clean Air Interstate Rule (CAIR) to minimize sulfur dioxide and nitrogen oxide emissions from power plants and prevent pollution spillover into downwind states. While observers of CAIR claim success in the reduction of air pollution, our innovative multivariate statistical analysis based on spatial and facility‐level panel data finds mixed results concerning the rule's effectiveness. On the one hand, we find that CAIR facilities are associated with increases in the reduction rate of pollution compared to non‐CAIR facilities. However, the evidence suggests that sulfur dioxide levels decreased in CAIR‐mandated facilities before the actual implementation of the program. Additionally, on the one hand, CAIR facilities in the interior of states are associated with slower pollution reduction rates than those on the border. However, this difference in reduction rate does not change dramatically before or after the adoption or implementation of this rule. This suggests that the CAIR program was ineffective in targeting specific facilities most likely to contribute to interstate pollution. We conclude that while CAIR spurred the electrical utility industry to reduce air pollution, some of these reductions occurred before the actual implementation of the program. More substantially, gains in interstate spillover pollution did not occur by targeting specific facilities most likely to spillover but rather through the overall reduction of air pollution in the eastern states.     

Looking for Sustainability in Not‐for‐Profit Program Delivery: An Experiment in Providing Post‐Bushfire Recovery Programs

This article examines an experiment in delivering services and programs in communities that were affected by the 2009 Victorian bushfires. Three not‐for‐profit agencies received funding to develop and deliver programs over a period of three years with the aim of achieving sustainability for the programs thus created. They were not constrained by the requirements of normal government funding, which is short term, subject to competitive tendering and targeted at specific programs and client groups. The nature of the funding allowed the three agencies to introduce innovative programs tailored to the needs of the community and with the aim of building community capacity. However the question of whether the programs are sustainable when existing funding runs out remains open.