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Research Results: What
is Known
What difference did these policies make? To answer this question,
this guide synthesizes findings from several major reports published
by MDRC, which in turn draw on findings from 29 separate evaluations
of welfare reforms undertaken in the 1980s and 1990s and from several
evaluations currently under way (the 17 most recent of which are
discussed in this report and listed in Table
1). These studies involved about 150,000 people living
in 11 states and two Canadian provinces. Nearly all of them used
rigorous random assignment research designs, wherein a lottery-like
process was used to assign each welfare recipient either to a program
group that was eligible for the new program being tested or to a
control group that was neither eligible for the new program's services
nor subject to its requirements but remained eligible for the state's
old welfare program. Because recipients were assigned at random,
there were no systematic differences between the program and control
groups at the outset of each study, and any differences that later
emerged can be confidently attributed to the program. Thus, the
control group can be seen as a benchmark indicating what would have
happened to recipients (and their families) under the old system
had they not enrolled in the new program. Comparing the program
and control groups' experiences with respect to a given outcome,
such as earnings, yields estimates of the program's effect - or
impact - on that outcome. For example, if control group members
earned an annual average of $3,139 while program group members earned
an annual average of $3,972, the program's impact on annual earnings
would be $833. In this document, reported "increases"
or "decreases" in outcomes are based on such program-control
comparisons, and all the tables and figures show program impacts
rather than outcome levels.
Although many of the programs examined here were launched prior
to l996, the three key reform approaches - mandatory employment
services, earnings supplements, and welfare time limits - are central
to most states' current welfare programs. And the range of program
strategies examined here faithfully reflects the diverse paths states
have taken following TANF's legislation. Because the three approaches
contribute distinct effects to the overall result - working sometimes
in complementary ways and at other times at cross-purposes - states
have to decide what emphasis to place on each.
These trade-offs and choices are illustrated in Table
2, which categorizes programs by reform approach and then presents
average results from some of the most recently completed evaluations.
Requiring welfare recipients to participate in mandatory employment
services designed to help them prepare for and find jobs increases
earnings and saves welfare dollars, but income does not change appreciably,
and the approach neither helps nor harms children. Within the mandatory
employment services category, "mixed" approaches that
offer both job search and education or training, depending on individual
needs, produce the largest earnings gains - about $1,150, on average,
for mixed-program participants, or better than twice as much as
the $550 that job-search-first program participants received, and
nearly four times as much as the $300 gain of the average education-first
program participant. By contrast, programs that combine mandates
with earnings supplements also increase earnings but also raise
public benefit receipt, and thus costs. These added costs have a
payoff, however; the combination of higher earnings (up about $650)
and higher benefit receipt (about $650 more) leads to dramatically
higher household income (up some $1,300) and benefits for young
children. Finally, adding time limits to the mix, as most states
have done, creates a contradiction. Before the time limit, the results
mirror those from earnings supplement programs (employment and income
both rise); but after the time limit goes into effect, the results
resemble those obtained from mandatory employment services (earnings
gains are offset by welfare losses, and income remains unchanged).
To help policymakers understand the individual and combined effects
of different policy approaches and come to better-informed decisions
about how to address these trade-offs, this document looks closely
at the effects of the different approaches in seven key areas -
program participation and mandates, employment and earnings, welfare
use, income and hardship, children's well-being, and family and
marriage - and then draws the policy implications of the research
findings for TANF reauthorization.
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