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- Policy Brief
#1
Long-Term Job Placement
Introduction
Under the Temporary Assistance to Needy Families (TANF)
legislation, Indiana may remain under the rules of its welfare waiver program, resulting
in a requirement that all able-bodied adult welfare recipients find employment within two years of receiving benefits. This brief
examines the likelihood of reducing welfare receipt through longterm job placement. The
final section examines the implications of these findings for Indiana's welfare program.
Indiana
Over half of Indiana's welfare caseload is concentrated in
five counties: Marion (20.4 percent with 2.7 percent
unemployment), Lake (18.7 percent with 3.0 percent unemployment), St. Joseph
(5.7 percent with 3.2 percent unemployment), Allen (5.2 percent with 2.0 percent
unemployment) and Vanderburgh (4.1 percent with 4.3 percent unemployment).
A recent survey of able-bodied welfare recipients
found that: 92.2 percent of cases were single-parent families and 60 percent of individual
recipients were children
|
For
ongoing recipients(%) |
For
applicants(%) |
| Average age of adult |
29.0 |
27.0 |
| Average age of child |
6.8 |
5.9 |
| Average number of eligible
children |
2.0 |
1.7 |
An examination of the IMPACT program in Indianapolis found that: Slightly over 1 in 5 welfare recipients referred by the state to
private contractors is placed into a job. Of those people referred by the state for job
readiness and placement services, 7-12 percent get jobs and are still working after six
months.
A substantial portion of job placements (more than half in
the case of some outside contractors) do not meet the IMPACT standards (i.e., a wage rate
of at least $6.06 an hour). The average wage is in the range of
$6.50 per hour. Most jobs provided either
employer-paid health insurance or access to employer-sponsored coverage to which workers
contribute a substantial portion (or all) of the
premium.
The Indianapolis study offers several
recommendations for improvement in the current system: A management information
system (MIS) that better tracks individuals recipients' employment status and the success
rates of individual contractors.
Stronger efforts to acquaint welfare recipients with
the transitional benefits to which they are entitled if they begin working. These
include transitional Medicaid, child care, transportation, and the Earned Income Tax
Credit. These benefits may also need to be more generous.
The government may wish to consider moving toward a
Òcapitation payment" rate for services provided by outside contractors rather than
cost-based reimbursement and fee-for-service payments geared toward specific job readiness
services.
There is a need for improvement in the system for
distinguishing clients who are job-ready
from those who are not. In addition, clear criteria for referring clients to various
contractors should be developed and related to outside contractors' specific strengths. More private employers should be recruited to participate in job
placement.
Experiences in Other States
Studies show that in many cases, employment does not
guarantee independence from public assistance and, frequently, incomes only rise because
of a combination of earnings and welfare benefits.
Findings regarding where to focus funds are mixed.
One study argues that employment programs are most effective for the middle tier of
welfare recipients; those who are not likely to find jobs on their own, but also did not
have such extreme barriers as to be unemployable.5 In contrast, another study recommends
focusing on those deemed the most employable.
A demonstration project in San Diego required having
at least three-fourths of eligible participants active in the employment program at all
times. This program mimics the requirement of TANF in that a large proportion of the
welfare population is required to work. This program resulted in a short-term increase in
employment and earnings and reduced AFDC receipt.
A program focused on the harder-to-employ population
as measured by prior welfare receipt and lack of work experience resulted in participants
having a higher income (a combination of earnings and AFDC benefits), but not being more
likely to leave welfare or to find employment. A voluntary work plan had little
effect on employment and earnings. In addition the program significantly increased welfare
receipt and the level of benefits.
In another program, clients are assigned caseworkers
who act as coaches, contacting employers after a
job interview to offer support services if the welfare recipient is hired.10 Assistance
includes help in securing reliable child care, transportation vouchers, and money for
required uniforms and equipment. The program is too new to show positive results.
Implications
Broad programs that focus on employment for the
entire welfare population have little impact on
the mostemployable tier of welfare recipients, and have the greatest earnings gains for
the middle-tier of recipients. The largest welfare savings come from the most
disadvantaged. In contrast, high-cost, intensive job training and placement services can
get people jobs with somewhat higher earnings, but will produce lower welfare savings per
dollar invested.
Indiana must decide whether the goal of the program
is to reduce welfare expenditures or promote job
placement. Education and training programs may increase the starting wages of participants
who find jobs, thereby leading to independence from welfare, but the program itself may be
expensive. In contrast, immediate job placement may put more people to work, but may not
provide them with the skills necessary to find employment at wages sufficient to raise
their families above poverty.
Increasingly, public assistance caseworkers will
need to act as employment coaches for welfare
recipients, offering them tips on successful job interviews and following up once they are
employed.
Notes
1. Fein, David; Beecroft, Erik; Grover, Neelima;
O'Brien, Carolyn; and Holcomb, Pamela.
(August1996). The Indiana Welfare Evaluation: Second Quarterly Report. Abt Associates,
Inc. and The Urban Institute.
Ftp://stats.bls.gov/pub/special.requests/chicago/www/economy.htm
2. Meyer, Jack A.; Bagby, Nancy S.; and Klotz, Marilyn E. (1996).
"Welfare-To-Work in Indianapolis: A Preliminary Evaluation." Economic and Social
Research Institute, October, p. 1.
3. Ibid., p. 2.
4. Auspos, Patricia; Cave, George; and Long, David. (April 1988).
"Maine: The Demonstration of State Work/Welfare Initiatives: Final Report on the
Training Opportunities in the Private Sector Program." Executive Summary, Manpower
Demonstration Research Corporation.
Gueron, Judith M., and Edward Pauly with Cameran M. Lougy. (1991).
"From Welfare to Work." Summary, Manpower Research Demonstration Corporation,
Russell Sage Foundation. New York, 1991.
5. Friedlander, Daniel. (1988)."Subgroup Impacts and
Performance Indicators for Selected Welfare Employment Programs." Executive Summary,
Manpower Demonstration Research Corporation, August, 1988.
6. Levitan, Sar A. and Gallo, Frank. (February 1992). Spending to
Save: Expanding Employment Opportunities. The George Washington University Center for
Social Policy Studies.
7. Hamilton, Gayle. (August 1988). "Interim Report on the
Saturation Work Initiative Model in San Diego." Executive Summary, Manpower Research
Demonstration Project.
8. Auspos, Cave, and Long. Rank, Mark R. (1985). "Exiting From
Welfare: A Life Table Analysis." Social Service Review, Vol. 59, No. 3, September,
pp. 358-376.
9. Leigh, Duane. (1995). "Can A Voluntary Workfare Program
Change the Behavior of Welfare Recipients? New Evidence from Washington State's Family
Independence Program (FIP.)" Journal of Policy Analysis and Management, Vol. 14, No.
4, Fall, pp. 567-589.
Long, Sharon K. and Wissoker, Douglas A. (1995). "Welfare
Reform at Three Years." The Journal of Human Resources, Vol. 30, No. 4, Fall, pp.
766-790.
10. Jouzaitis, Carol. (1997). "States Face Task of Matching
Welfare Recipients with Jobs: Failure to Get People into the Work Force will Cut Federal
Aid." St. Louis Post-Dispatch, January 10.
11. Gueron, Pauly and Lougy.
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