Box 2

What Makes Up Impacts on Earnings?

A welfare-to-work program’s impacts on earnings are likely to consist of several components. First, a program can result in more people becoming employed than would normally have been the case (an impact on job finding). Second, among people who would have become employed in any case, a program can shorten the time that passes until they find a job (an impact on time to first job), lengthen the time they stay in a job (an impact on employment stability), or raise wage rates (an impact on earnings on the job).

The chart below shows the relative contributions of job finding, time to first job, employment stability, and earnings on the job to the five-year earnings impacts of four of the NEWWS programs (the black bars). Each impact was made up of a different configuration of these four contributing factors.