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Policy Framework
A central feature of federal welfare policy in the 1990s — one later reinforced by the landmark 1996 welfare reform law — was to encourage states to experiment with new approaches to fostering employment and economic self-sufficiency among welfare recipients. Embracing this challenge, the State of Vermont developed the Welfare Restructuring Project (WRP), one of the first comprehensive statewide reform initiatives piloted under waivers of pre-1996 federal welfare rules. WRP used a gentler approach to increasing work and reducing reliance on welfare than reforms in most other states, but it represented a dramatic departure from Vermont’s previous approach. Among the policies tested in WRP were a time-triggered employment mandate and modest financial work incentives. MDRC studied the program’s implementation, effects on welfare recipients and their children, and financial costs and benefits over a six-year period.
Agenda, Scope, and Goals
Operated from 1994 through 2001, WRP had these key features:
- It required that recipients get a wage-paying job after a prescribed maximum number of months of benefit receipt: 30 months for single-parent families and 15 months for two-parent families.
- It provided job search assistance and — for recipients who could not find regular jobs — subsidized, minimum-wage community service positions.
- It encouraged work and self-sufficiency by changing some welfare rules (for instance, those governing how long a portion of a recipient’s earnings could be disregarded in benefit computations) and providing more generous transitional benefits to recipients who left welfare.
The WRP evaluation was directed at the following key questions:
- How was the program implemented?
- What were WRP’s effects on outcomes such as employment and earnings, public assistance receipt, family income and poverty, and children’s well-being?
- How large were WRP’s financial benefits relative to its financial costs, both from the perspective of government budgets and from the perspective of program enrollees?
Design, Sites, and Data Sources
The WRP evaluation is based on a rigorous research design. Starting in 1994, welfare recipients and applicants throughout Vermont were randomly assigned to one of three groups: (1) the WRP group, which was eligible for the program’s incentives and subject to its work requirement; (2) the WRP Incentives Only group, which was eligible for the incentives but was not subject to the work requirement; or (3) the Aid to Needy Families with Children group, to which the pre-WRP welfare rules continued to apply (that is, the group was neither eligible for the program’s incentives and services nor subject to its work requirement).
The random assignment design ensured that the groups did not differ at the outset of the study. Therefore, any differences among them that emerged during the six-year follow-up period are attributable to WRP.
The WRP research team gathered data throughout the state but focused on six of Vermont’s welfare districts:
- Barre
- Burlington
- Newport
- Rutland
- Springfield
- St. Albans
The program’s implementation, effects, and costs and benefits were assessed using administrative records of cash assistance receipt, food stamp receipt, and quarterly earnings; surveys of welfare clients and staff; field research conducted in welfare offices; WRP records; and fiscal data.
Findings
Findings from MDRC’s Evaluation of Vermont’s Welfare Restructuring Project can be found in WRP: Final Report on Vermont’s Welfare Restructuring Project.
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