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Preface
In 1993,
administrators of the Los Angeles County Department of Public
Social Services (DPSS) began a total overhaul of their welfare-to-work
program, GAIN (Greater Avenues for Independence). For the
previous five years, GAIN staff had assigned most welfare
recipients who entered the program to classes in adult basic
education, GED preparation, or English as a Second Language.
Evidence from several sources — including an evaluation
of the program by MDRC, agency reports on participation and
job placements, and discussions with supervisors and staff
— showed that GAIN’s basic education approach was
not working as hoped: The program was relatively costly, but
helped few additional people attain education credentials
or employment.
DPSS administrators
resolved that a program that offered job search assistance
as its primary service and encouraged welfare recipients to
start working as soon as possible would help greater numbers
of welfare recipients achieve self-sufficiency. Consulting
with administrators of other programs, including the GAIN
program in neighboring Riverside County, and working with
administrators in the County Office of Education, DPSS administrators
fashioned an innovative, strongly employment-focused program,
which they named Jobs-First GAIN.
Launched
in 1995, Jobs-First GAIN combined program services and mandates
that had worked in other settings and some that were relatively
new. Its main features included: (1) an unusually intensive
program orientation aimed at motivating new enrollees to find
work quickly; (2) high-quality job clubs, whose leaders taught
job-finding skills and engaged participants in activities
aimed at boosting their self-esteem and motivation to work;
(3) job development activities to increase job opportunities
and match people with prospective employers; (4) a strong
Work First message communicated through written handouts and
group presentations, and in individual meetings with program
staff; (5) a warning, repeated orally and in writing, that
California would impose time limits on welfare eligibility
for those who did not work; (6) a concerted effort to teach
people that California’s relatively generous rules for
calculating welfare grants would help them increase their
income in the short term by combining work and welfare; and
(7) a relatively tough, enforcement-oriented approach to encourage
people to complete the activities and find work quickly. Most
of the features of Jobs-First GAIN continue under CalWORKs,
California’s program under the TANF provisions of the
1996 federal welfare reform law.
DPSS administrators
contracted with MDRC to evaluate Jobs-First GAIN, using a
rigorous random assignment design. The Jobs-First GAIN Evaluation
began in 1996 and includes nearly 21,000 single parents and
members of two-parent households. The evaluation is jointly
funded by DPSS, the U.S. Department of Health and Human Services,
and the Ford Foundation. We are grateful for their commitment
and support.
The first
report from the evaluation described how DPSS restructured
its GAIN program, and concluded that it is possible to change
a large, urban, basic-education-focused welfare-to-work program
to a work-focused program. The present report explores whether
these changes made a difference. It describes patterns of
participation in Jobs-First GAIN and presents estimates of
the program’s effects on employment, earnings, and welfare
receipt during the first year following the date on which
people enrolled in Jobs-First GAIN and attended a program
orientation.
The main
findings for the first year are that Jobs-First GAIN:
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produced
a substantial boost in employment and earnings;
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led
to small reductions in the percentage of people receiving
welfare and Food Stamps, but larger decreases in expenditures
for such assistance;
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helped
welfare recipients replace welfare dollars with earnings,
though their overall income remained about the same;
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achieved
larger employment and earnings gains than the county’s
previous, basic-education-focused program; and
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produced
positive effects for many different types of welfare recipients.
Overall,
with more people employed but a substantial percentage still
not working, the findings convey a dual message: clear and
measurable progress, but, not surprisingly, no simple answers.
A later
report will extend the impact analysis to a second year and
study a greater range of program effects, including access
to medical coverage, use of transitional child care, incidence
of food insecurity and hunger, and the well-being of children.
The report will also include a benefit-cost analysis.
The findings
from the Jobs-First GAIN Evaluation have broad significance
for welfare reform. Los Angeles County has the largest welfare
population of any county in the United States — larger
than that of any state except New York and California. Hispanics
and African-Americans make up about 80 percent of the county’s
welfare population. Recent studies of welfare caseloads have
shown that minorities and residents of large cities are leaving
assistance more slowly than other welfare recipients. If Los
Angeles County’s program succeeds in moving significant
numbers of people from welfare to work and sustains these
gains over time, the program can serve as a model for many
other large urban areas.
Judith
M. Gueron
President
I.
Introduction
The Personal
Responsibility and Work Opportunity Reconciliation Act of
August 1996 ended the Aid to Families with Dependent Children
(AFDC) program, the nation's largest cash welfare program.
Among its provisions, the law replaced AFDC with block grants
to states, called Temporary Assistance for Needy Families
(TANF), and created financial incentives for states to run
mandatory, work-focused, welfare-to-work programs. The law
also placed a five-year limit on the amount of time most families
can receive federally funded welfare, and it required states
to place increasingly high percentages of welfare recipients
into jobs and employment-related activities.
In meeting
the new challenges of the federal welfare legislation, state
and local administrators and policymakers can benefit from
reliable information on the types of welfare-to-work program
approaches that can quickly move substantial numbers of people
into work and off welfare. This is especially true for programs
that operate in large cities, where the remaining caseload,
following large declines nationwide, is concentrated. Many
of the nation’s major urban areas have unemployment rates
above the national average, little or no public transportation
to connect inner-city residents to available jobs in the suburbs,
and large bureaucracies that can be hard to change. Further,
Hispanics, African-Americans, and other minority groups make
up most of the nation’s welfare caseload. Minorities
are leaving assistance more slowly than recipients who are
white and will likely make up an even larger portion of the
welfare population in the coming years. Thus, the success
of welfare reform nationally will depend increasingly on how
well large, urban welfare-to-work programs help predominantly
minority welfare populations find employment and leave assistance.
This report
presents first-year participation and impact findings from
the evaluation of the Los Angeles Jobs-First GAIN (Greater
Avenues for Independence) program, the largest county welfare-to-work
program in the nation. Consistent with the philosophy and
goals of the 1996 federal welfare reform legislation that
created TANF, Los Angeles Jobs-First GAIN emphasizes job search
assistance and imparts a strong pro-work message in attempting
to move thousands of AFDC/TANF recipients quickly into jobs
and, as soon as feasible, off the welfare rolls. This message
and emphasis place Jobs-First GAIN in the category of Work
First programs, the approach followed by most current state
and local welfare-to-work programs. Most of the features of
Jobs-First GAIN continue under CalWORKs, California’s
program under the TANF provisions. Los Angeles inaugurated
its CalWORKs program in April 1998, after the follow-up period
for this report.
The findings
on Jobs-First GAIN have broad significance for welfare reform.
Los Angeles County, with a total population of 9.6 million
people, has the largest welfare population of any county in
the United States (about 700,000 people, in about a quarter
of a million cases) — roughly one-twelfth of the nation’s
welfare caseload and larger than that of any state except
New York and California. Hispanics and African-Americans make
up about 80 percent of the county’s welfare population.
If Los Angeles County’s Work First program succeeds in
moving significant numbers of people from welfare to work,
the program can serve as a model for many other large urban
areas.
The Jobs-First
GAIN Evaluation began in 1996 and will continue through December
1999. It is jointly funded by the Los Angeles Department of
Public Social Services (DPSS), the U.S. Department of Health
and Human Services (HHS), and the Ford Foundation. This report
is the latest from the evaluation. The first report, Changing
to a Work First Strategy: Lessons from Los Angeles County’s
GAIN Program for Welfare Recipients (1997), described
how DPSS restructured its GAIN program services model from
a "human capital" development (primarily basic education)
approach to a Work First model. The report concluded that
it is possible to change a large, urban, education-focused
welfare-to-work program to a Work First program.
This report
explores whether these changes made a difference. It describes
patterns of participation in Jobs-First GAIN and presents
estimates of the program’s effects on employment, earnings,
and welfare receipt during the first year following the date
on which people enrolled in Jobs-First GAIN and attended a
program orientation.
Central
to the evaluation is an experimental design based on random
assignment. Nearly 21,000 single parents (AFDC-FGs, or Family
Group) and members of two-parent households (AFDC-Us, or Unemployed
Parents) who attended a Job-First GAIN orientation from April
1 through September 11, 1996, were randomly assigned to one
of two groups: the experimental and control groups. Experimental
group members had access to Jobs-First GAIN’s program
services and Work First message. They were subject to the
program’s mandatory participation requirements and could
incur a sanction (a reduction in their welfare grant) for
noncompliance. Control group members were precluded from receiving
Jobs-First GAIN services until October 1998, the end of the
follow-up period for the evaluation. They remained eligible
to receive welfare and Food Stamp payments, however. Control
group members could also seek other services in the community
and receive child care assistance from DPSS for employment-related
programs in which they enrolled on their own initiative.
Finally,
both experimental and control group members were eligible
for California’s rules for calculating welfare grants,
called "Work Pays" (described in Section II). Work
Pays allowed most welfare recipients who found a job to continue
receiving welfare benefits and retain eligibility for Medicaid.
Control group members may have been motivated by these rules
to look for work on their own initiative or to increase their
hours of work. As discussed in Section II, it is likely that
fewer control than experimental group members knew about Work
Pays.
Experimental
designs based on random assignment typically provide the most
accurate and reliable findings on effects of welfare-to-work
programs. Because people are assigned at random to the experimental
or control group, the two groups do not differ systematically
on both measured characteristics (such as length of time on
welfare) and unmeasured characteristics (such as strength
of motivation to get a job). Members of the two groups also
face the same labor market conditions. The employment and
welfare behavior of control group members represents what
would have happened to welfare recipients in the absence of
the program. Thus, any subsequent differences found between
the two groups can be attributed with confidence to the combination
of program services, messages, and participation mandates
that only experimental group members experienced. These differences,
known in the language of evaluations as program impacts,
will be discussed later in this summary and are statistically
significant unless otherwise noted (that is, they have greater
than a 90 percent chance of resulting from the program rather
than by chance).
I.
Overview of the Findings
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As
expected for a Work First program, Jobs-First GAIN produced
a substantial initial boost in employment and earnings.
Jobs-First GAIN increased the proportion of single parents
(AFDC-FGs) who worked for pay during the first year of
follow-up by 11 percentage points above control group
levels. This increase is large relative to results from
earlier studies of welfare-to-work programs. The program
raised first-year earnings for AFDC-FGs by an average
of $750 (31 percent) relative to the control group. Jobs-First
GAIN also boosted employment levels for members of two-parent
families (AFDC-Us) by 12 percentage points and increased
their first-year earnings by an average of $1,082, or
44 percent (compared to the control group’s earnings).
The AFDC-U sample for this evaluation is nearly evenly
divided between men and women. Jobs-First GAIN caused
employment and earnings gains for both men and women,
with the gains for AFDC-U men averaging $1,449 per experimental
group member (compared to the average earnings for AFDC-U
men in the control group). The gains for AFDC-U women
were not as large.
-
Jobs-First
GAIN produced small reductions in welfare and Food Stamp
receipt, but larger decreases in expenditures for public
assistance. At the end of year 1, the vast majority
of experimental group members — 78 percent of single
parents (AFDC-FGs) and 77 percent of members of two-parent
families (AFDC-Us) — still received AFDC/TANF payments,
but these proportions were 4 and 5 percentage points lower
than control group levels. Jobs-First GAIN reduced welfare
outlays in the first year of follow-up, with average savings
(relative to the control group) of $432, or 7 percent,
for single parents (AFDC-FGs) and $667, or 10 percent,
for members of two-parent families (AFDC-Us). Jobs-First
GAIN produced similar reductions in Food Stamp receipt
and payments as in AFDC/TANF for both AFDC-FGs and AFDC-Us.
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Jobs-First
GAIN helped welfare recipients replace welfare dollars
with earnings, but their overall income remained about
the same. Earnings gains for single parents (AFDC-FGs)
and members of two-parent families (AFDC-Us) were matched
by reductions in AFDC/TANF and Food Stamp payments. As
a result, Jobs-First GAIN did not increase combined income
from these sources during the first year of follow-up.
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Jobs-First
GAIN achieved larger employment and earnings gains than
the county’s previous, basic-education-focused program.
Welfare administrators changed the program’s self-sufficiency
approach from emphasizing skill-building to emphasizing
rapid entry into jobs. First-year results demonstrate
that the current program was more effective in helping
welfare recipients find employment. Though successful,
Jobs-First GAIN did not achieve as strong results as two
previously evaluated Work First programs operated in neighboring
Riverside County. The more positive results for the Riverside
programs could have been caused by differences in the
program environments, however.
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Jobs-First
GAIN achieved positive effects for many different types
of welfare recipients. The degree of consistency
achieved by the program is unusual and impressive. The
program increased employment and reduced welfare payments
for recipients in the central city and outer regions of
Los Angeles County, for different racial and ethnic groups,
for recipients with the most serious barriers to employment
(no high school diploma or GED — high school equivalency
— certificate, no recent work experience, and lengthy
prior welfare receipt) as well as for those facing fewer
barriers to employment. The program also achieved earnings
gains for most of these groups.
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Jobs-First
GAIN also achieved positive results for welfare recipients
who volunteered to enter the program early. Los
Angeles County lacked funding to serve all welfare recipients
required to participate. The agency developed a waiting
list for services but also invited some welfare recipients
to enter the program several months or more before their
name reached the top of the list. Results of the Jobs-First
GAIN Evaluation show that welfare-to-work programs can
pay off for recipients who volunteer for services: In
year 1, the program increased employment and earnings
by 14 percentage points and over $1,000 respectively and
reduced AFDC/TANF payments by 8 percent.
II.
Key Features of the Los Angeles Program
In response
to the 1996 law, most states and localities are implementing
some kind of Work First approach, with the central focus on
rapid employment. Los Angeles’s version — put in
place prior to the federal law — has a number of features
that together represent serious investments in the program.
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Communicating
a strong Work First message. Welfare administrators
have stated clearly that the goal of the program is to
move people to employment as rapidly as possible. This
philosophy is communicated to program enrollees through
written handouts and group presentations, and in individual
meetings with program staff.
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Warning
enrollees that time-limited welfare is coming and urging
them to get a job right away to preserve their eligibility
for assistance. Even before the federal welfare
reform legislation was enacted in August 1996, program
staff were informing new enrollees that the federal government
and the State of California would limit welfare eligibility,
possibly to two years, and encouraging them to find work
in order to avoid the expected cuts in welfare. As one
agency flyer put it:
Everyone
will be expected to work. . . . These changes could occur
as early as 1996. It is critical that you prepare now
for these social changes. Work experience is the best
training. Remember: "WORK IS IN, WELFARE IS OUT."
The
message was repeated during program activities, such as
job club (group sessions in which people get assistance
in looking for work), and in meetings between enrollees
and program staff.
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Operating
an unusually intensive program orientation. All
new enrollees attend a six-hour-long group orientation
session, followed by an individual appraisal meeting with
a case manager during their first day in the program.
In contrast, most other welfare-to-work programs, including
some that share Los Angeles County’s Work First philosophy,
run much shorter orientations. Further, staff in other
programs use most of the available time to collect background
information on new enrollees and to assign enrollees to
their first employment-related activity. Orientation meetings
aim to change recipients’ perceptions of Jobs-First
GAIN, to present them with the Jobs-First program’s
message, and to increase their self-esteem — particularly
with regard to their ability to find work. At the appraisal
meetings, case managers convey their expectation that
enrollees will be working soon. They also discuss the
availability of transitional child care and medical insurance
for participants who leave welfare for employment.
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Providing
high-quality job search assistance. As described
below, the vast majority of those who actively participated
in Jobs-First GAIN attended job clubs. Well-trained staff
from the Los Angeles County Office of Education run these
services at 15 Job Centers around the county, and —
along with Jobs-First GAIN staff — monitor participants’
progress. Jobs-First GAIN’s job clubs provide instruction
in many of the skills needed to obtain employment, including
finding job openings, writing a résumé and job application,
and conducting a job interview. Job club participants
then conduct up to two weeks of supervised job search,
using agency phone banks, job listings, and assistance
from program staff. These features are typical of job
clubs in many other programs. Jobs-First GAIN’s job
clubs, however, also feature a strong motivational component.
The message and a specially developed curriculum are upbeat,
stressing how work can lift self-esteem and that a low-paying
first job can lead to a better one in the future. In addition,
GAIN job developers aggressively develop linkages to local
employers and match enrollees to specific job openings.
These efforts go considerably beyond what is traditionally
offered in job search activities.
Jobs-First
GAIN offered short-term basic education and vocational
training classes as well, but assigned few enrollees to
these activities. The program also made limited use of
unpaid work experience jobs.
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Using
job development activities to support enrollees’
job search efforts. Each Jobs-First GAIN office
has job developers who cultivate relationships with local
employers and create lists of job positions. Job developers
then try to match enrollees to available job openings,
based on enrollees’ prior experience and interests.
Job developers begin working with enrollees during orientation
and appraisal, and continue assisting their job search
efforts during job club and other program components.
Job developers also arrange and host job fairs for clients
— weekly "mini" job fairs with one or two
employers, plus larger quarterly job fairs with numerous
employers. One office even experimented with having its
job developers work on a one-on-one basis with program
enrollees who had received a financial sanction for noncompliance
with program requirements.
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Demonstrating
that work pays. As noted above, California’s
"Work Pays" rules for calculating welfare grants
allowed many recipients to combine work and welfare. Using
waivers granted by the U.S. Department of Health and Human
Services, Work Pays increased, above national standards,
the amount of earnings that the welfare department "disregarded"
(did not count) when calculating welfare grants. As a
result, most welfare recipients who combined work and
welfare could receive hundreds of dollars per month in
income above what they would have received from welfare
alone. Work Pays became part of the Jobs-First GAIN strategy
for convincing people to find employment as quickly as
possible, even if available jobs paid little. Jobs-First
GAIN staff made a concerted effort to explain the financial
benefits of Work Pays to experimental group members. Staff
walked new enrollees through several examples of grant
calculations during program orientation motivational sessions
and repeated this message during job clubs and other employment-related
activities. Control group members were also eligible for
Work Pays financial incentives, although they did not
receive this message from Jobs-First GAIN staff. Possibly,
as a result, fewer control group members may have been
motivated to find employment than if they had received
this reinforced message.
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Running
a relatively tough, enforcement-oriented program.
Jobs-First GAIN case managers made frequent use of the
program’s formal enforcement procedures, including
threats to reduce welfare grants, to encourage enrollees
to participate in program activities or show good cause
why they could not. As discussed in the report, the vast
majority of program enrollees received at least one warning
that they were out of compliance with program rules. About
one in five incurred a grant reduction (sanction). Program
administrators intended that a "high enforcement"
case management approach and a strong pro-employment message
would complement the program’s high-quality, motivational
job clubs. Together, these components of Jobs-First GAIN’s
approach encouraged enrollees to find work quickly and
discouraged them from spending a long time in the program.
III.
The Research Sample and Program Environment
The research
sample for the evaluation includes 20,731 AFDC-FGs and AFDC-Us,
randomly assigned between April 1 and September 11, 1996,
when they showed up at a Jobs-First GAIN office for their
scheduled program orientation. During the evaluation, DPSS
followed the eligibility criteria written into the federal
Family Support Act of 1988 (FSA) when determining which recipients
had to enroll in Jobs-First GAIN. According to the FSA, any
single-parent AFDC recipient whose youngest child was age
three or over and who did not meet certain exemption criteria
was mandated to participate in a welfare-to-work program.
Exemption reasons included having a disabling illness, being
employed full time (30 hours or more per week), living in
a remote area that made program activities inaccessible, or
being in at least the second trimester of pregnancy. These
eligibility criteria also pertained to members of AFDC-U cases,
except that parents of children under three were also required
to enroll. Further, DPSS required both parents on an AFDC-U
case to enroll in Jobs-First GAIN, an option given to states
and localities under the FSA.
DPSS did
not have the resources to serve all welfare recipients mandated
to participate. The agency therefore implemented a targeting
strategy. Prior to the start of the evaluation, DPSS reserved
nearly all places in Jobs-First GAIN for people identified
by the federal Family Support Act of 1988 as having the greatest
risk of remaining on welfare for many years. DPSS gave highest
priority to those who had received welfare continuously for
at least three years.
Anticipating
the start of the evaluation, DPSS decided to change its targeting
strategy so that the evaluation could determine the effect
of the Jobs-First GAIN approach on a broad cross section of
the welfare caseload and on various types of welfare recipients.
To do this, DPSS administrators implemented a complex selection
and weighting procedure. The resulting sample, which included
nearly everyone who came into the program between April and
early September 1996, was drawn from specific groups in the
caseload and, in very broad terms, appears to reflect the
diversity of the mandatory caseload. The sample differs from
the full Jobs-First GAIN mandatory caseload in having a substantially
smaller percentage of persons experiencing a very long spell
— at least five years — on welfare and by not including
teen parents and a few other groups.
The sample
includes 15,683 single parents (AFDC-FGs) and 5,048 members
of two-parent families (AFDC-Us). It includes welfare recipients
who inhabit the inner-city neighborhoods of Los Angeles, as
well as the outlying suburbs. The sample is large and diverse,
by race and ethnicity, by age and family size, and according
to several indicators of relative disadvantage in the labor
market. Among AFDC-FG sample members, Hispanics form the largest
ethnic group (45 percent); about 31 percent are African-Americans;
17 percent are non-Hispanic whites; and 6 percent are Asians.
Just over half of all the AFDC-FGs had at least one preschool-age
child (under the age of six), for whom child care would have
been needed. Nearly 20 percent of AFDC-U sample members are
Asians (primarily Indochinese), and about half the AFDC-Us
had limited English proficiency. The AFDC-U group also contains
a larger percentage of non-Hispanic whites (many of them recent
immigrants from Armenia) and a much smaller percentage of
African-Americans compared to AFDC-FGs. Further, the AFDC-U
sample members had, on average, more children on their cases
than did the AFDC-FG sample members (2.4 versus 2.0, respectively).
A large
majority of AFDC-FG and AFDC-U sample members faced one or
more serious barriers to employment at the time of random
assignment: Fewer than half of each group had graduated from
high school or received a GED certificate; about 60 percent
had not worked for pay in the prior three years; and about
70 percent had received welfare for at least two years. Other
members of the research sample faced fewer barriers to employment:
About 30 percent of AFDC-FGs and AFDC-Us were newly approved
applicants for assistance or had received assistance for less
than two years, and more than a quarter of each group had
worked for pay in the year before random assignment.
A key
task of the evaluation is to analyze whether Los Angeles County’s
Work First approach benefited many types of recipients or
primarily certain groups within the caseload. Key subgroups
for analysis include:
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inhabitants
of different geographic areas of the county;
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members
of different racial and ethnic groups;
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people
who entered the program with a high school diploma or
a GED certificate and nongraduates;
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short-
and longer-term welfare recipients;
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those
with and without recent work histories;
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persons
with multiple barriers to employment (for example, no
high school diploma or GED certificate, no recent work
history, and long-term welfare receipt);
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among
AFDC-FGs, "early" and "regular" enrollees;
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among
AFDC-Us, men and women.
The last
two comparisons address specific questions on DPSS’s
strategy for targeting services to particular types of welfare
recipients. As discussed above, DPSS lacked funding to serve
all welfare recipients mandated to participate in Jobs-First
GAIN. In response, DPSS placed recipients on a waiting list,
which was ordered according to recipients’ length of
time on AFDC, as well as other background characteristics.
Most enrollees in Jobs-First GAIN entered the program after
reaching the top of the waiting list and receiving a notice
from DPSS informing them that a place in the program had become
available. These persons are called "regular enrollees."
Other enrollees asked DPSS to let them enter the program "early,"
that is, before they reached the top of the waiting list.
(Both "early enrollees" and "regular enrollees"
were subject to Jobs-First GAIN’s mandatory participation
requirements and could incur a reduction in their welfare
grant — a sanction — for noncompliance.) Including
early enrollees in a random assignment study of Jobs-First
GAIN allows the evaluation to address a long-standing issue
for welfare reform: When funds are scarce, should welfare-to-work
programs target recipients who show the highest motivation
to participate?
Most previous
studies of AFDC-Us in welfare employment programs focused
only on household heads (usually men). In contrast, the AFDC-U
group in this evaluation consists of both primary wage-earners
(usually men) and second parents (usually women). The research
design, however, permitted only one adult member of an AFDC-U
household to be included in the research sample: the first
person to show up for a program orientation during the sample
intake period. Nearly half of the AFDC-Us in the sample are
women. Thus, the evaluation provides an unusual opportunity
to learn about program effects on women in two-parent cases.
(What little research exists indicates that female AFDC-U
recipients have scant prior earnings, and also have tended
not to benefit as much from welfare-to-work programs as their
male counterparts.) In addition, the Jobs-First GAIN Evaluation
began after California received a federal waiver eliminating
regulations that terminated an AFDC-U case if the primary
wage-earner worked 100 hours or more in a month. Thus, studying
the employment and earnings effects for AFDC-U men (usually
the primary wage-earners) will provide needed information
on the long-term impact of the elimination of the "100-hour
rule."
A.
Additional Background Information
Labor
market conditions have been improving in Los Angeles County
during the evaluation period — employment levels have
risen, and unemployment has declined. Still, the county’s
unemployment rate is higher than the national average. Further,
within the county, unemployment rates vary considerably. For
example, unemployment rates in South-Central and East Los
Angeles — communities where more than 90 percent of the
residents are either African-Americans or Hispanics —
still hover over 10 percent (3 percentage points above the
county average).
County
AFDC/TANF caseload numbers followed the trends in employment
figures. As of July 1996, Los Angeles County had about 306,000
cases; two years later, the number declined to 245,000. California
has reduced grant levels by nearly 7 percent since the evaluation
began, although the state’s welfare grant levels remain
well above the national average.
IV.
The Policy Context of the Evaluation: Comparing the Effects
of Jobs-First GAIN to Those of Other Programs
Launched
in 1988, the original Los Angeles GAIN program, in keeping
with statewide directives, placed a strong emphasis on upfront
basic education. Working only with long-term welfare recipients,
the program assigned most of them to adult basic education
(remedial English and math), GED test preparation, or English
as a Second Language classes; relatively few were assigned
to job search activities.
A large-scale
evaluation MDRC conducted of the GAIN program in Los Angeles
and five other counties found that Los Angeles GAIN had incurred
substantial per capita costs but had produced little gain
in participants’ earnings and only modest savings in
welfare expenditures. Los Angeles GAIN staff voiced frustration
over the program’s shortcomings: Enrollees were neither
completing their education activities nor finding jobs. In
contrast, the GAIN program in neighboring Riverside County
had achieved unprecedented earnings gains, large reductions
in welfare payments, and substantial savings to government
budgets. Riverside GAIN used a mixed-services approach. The
program assigned a large percentage of people to job club
(usually as their first activity), used job development to
support their job search efforts, maintained job placement
goals for program staff, and communicated a strong and pervasive
message that encouraged people to find work as soon as possible.
In keeping with statewide directives, Riverside GAIN also
offered basic education instruction to welfare recipients
determined at program entry to have no high school diploma
or GED certificate, limited literacy or math skills, or limited
ability to read and speak English. The program discouraged
long stays in basic education, however, and transferred participants
with poor attendance to job club.
DPSS administrators
decided to revamp their program along the lines of successful
Work First programs such as Riverside’s. Administrators
adopted most of the prominent features of Riverside GAIN (except
its job placement goals for program staff), but put a greater
emphasis on building welfare recipients’ self-esteem
and motivation to find work. DPSS completed this process by
the end of 1995, changing the name of its program to Jobs-First
GAIN to emphasize the program goal of moving large numbers
of recipients rapidly into jobs. That same year, California
stopped requiring county welfare-to-work programs to assign
any welfare recipients to basic education. This change allowed
DPSS to implement a more strongly job-search-oriented program
than Riverside GAIN.
A key
question for the evaluation is whether Los Angeles County’s
Work First program did a better job of helping welfare recipients
find work and leave welfare than the county’s previous,
basic-education-focused program. The evaluation also considers
whether Jobs-First GAIN attained positive effects similar
in magnitude to those achieved by Riverside GAIN during the
late 1980s and early 1990s. As discussed above, Riverside
GAIN represents a different version of a Work First program
because (in accordance with state GAIN rules at the time)
it assigned a higher percentage of welfare recipients to basic
education. Finally, the evaluation compares program impacts
to those achieved by a later version of Riverside’s Work
First program, called Labor Force Attachment (or LFA). Operated
during the early-to-mid 1990s, as part of the National Evaluation
of Welfare-to-Work Strategies, the Riverside LFA program,
like Jobs-First GAIN, assigned most enrollees to job club
and relatively few to education and training. These comparisons
are performed with subsamples of AFDC-FGs who share similar
background characteristics.
V.
Findings on Program Implementation and Participation
This report
follows the analytical framework used in previous MDRC studies
of participation patterns in welfare-to-work programs. It
defines participation as attendance for at least one day at
an employment-related activity, but does not count program
orientations, appraisals, or other meetings with Jobs-First
GAIN staff in calculations of participation levels. This definition
of participation assumes that program enrollees who take part
in activities such as short-term job clubs or longer-term
education and training courses receive the strongest exposure
to the program "treatment." For Jobs-First GAIN,
however, the distinction between attendance at a program activity
and a meeting with program staff is not clear-cut. All
experimental group members attended a long informational
and motivational meeting at orientation during which program
staff strongly communicated the program’s Work First
message. In addition, experimental group members could receive
job leads from program staff during orientation or appraisal,
or at any time afterwards. Thus, using a more inclusive definition
of what constitutes a program activity, one could conclude
that 100 percent of experimental group members participated.
Relatively
few experimental group members participated in an employment-related
activity during the first year after orientation: 38 percent
of AFDC-FGs and 30 percent of AFDC-Us (see Figure
1). Nearly all participants in program activities attended
job club — a service of ten emphasized in Work First
programs. Participation was usually short term. Most participants
attended job club only, and most job club attenders took part
in only one three-week session.
About
two-thirds of AFDC-FG and AFDC-U experimental group members
who participated in an employment-related activity (hereafter
referred to as "participants") found a job during
the first year.[1]
Employment levels, however, exceeded by a wide margin the
rate at which participants exited AFDC/TANF. These findings
suggest that most former job club participants were combining
work and welfare. The vast majority of AFDC-FG and AFDC-U
participants were deregistered from the program during the
first year — that is, they became no longer required
to participate. About half entered this status because they
were employed 30 or more hours per week.
As noted
above, most experimental group members did not participate
in a Jobs-First GAIN activity after orientation. Low participation
rates, however, do not mean that the program did not affect
people, because even nonparticipants received some exposure
to the program’s Work First message and information on
California’s Work Pays incentives. In this way, the program
may have directly or indirectly encouraged nonparticipants
to find a job on their own initiative, contributing to the
program’s overall effects on employment and welfare receipt.
More-over, DPSS administrators have asserted that Jobs-First
GAIN’s mandatory participation requirements encourage
experimental group members who started working before orientation
to report their employment to program staff.
Among
both AFDC-FGs and AFDC-Us, just under half of the nonparticipants
found a job during the first year of follow-up, based on statewide
Unemployment Insurance (UI) earnings records. Strikingly,
a much higher percentage — more than five out of every
six AFDC-FG and AFDC-U nonparticipants — were deregistered
by program staff, mostly for reasons other than employment
(for example, long-term illness or disability, marriage, birth
of a child, or incurring a financial sanction). Jobs-First
GAIN staff learned of and reacted to changes in the circumstances
of nearly every nonparticipant. Almost no one in the experimental
group was "lost in the system."
The findings
on employment for nonparticipants suggest that the program’s
message and mandates may produce positive results beyond those
achieved through attendance in job club. It should also be
kept in mind, however, that employment levels of nonparticipants
fell below those of program participants. Possibly, Jobs-First
GAIN could have achieved greater employment overall through
additional investments in staffing and development of case
management strategies designed to increase participation in
job club.
Jobs-First
GAIN staff initiated formal enforcement proceedings for about
70 percent of AFDC-FGs and AFDC-Us during the first year of
follow-up. Reasons for commencing the "conciliation"
process (as DPSS terms it) include nonattendance at an assigned
activity or scheduled meeting with Jobs-First GAIN staff.
Some experimental group members also entered conciliation
status during their initial appraisal meeting following random
assignment, when they refused to accept an assignment to job
club.
About
23 percent of AFDC-FGs and 17 percent of AFDC-Us incurred
a reduction in their welfare check (a sanction) during the
first year of follow-up (compared to fewer than 10 percent
in the earlier Los Angeles GAIN and Riverside GAIN programs).
These rates are similar to those found for some other employment-focused
welfare-to-work programs of the 1990s. Not surprisingly, Jobs-First
GAIN staff were particularly likely to impose sanctions on
nonparticipants.
As might
be expected, early enrollees among the AFDC-FGs (people who
asked to enter the program before they were required to do
so) were much more likely to participate in employment-related
activities than regular enrollees (people who waited until
their regularly scheduled assignment to Jobs-First GAIN).
Participation levels were the same for AFDC-FGs with and without
a high school diploma or a GED certificate at random assignment.
Among AFDC-Us, however, experimental group members who had
not graduated from high school (or received a GED certificate)
recorded higher levels of participation. A larger proportion
of AFDC-U men than women participated in Jobs-First GAIN.
Among both AFDC-FGs and AFDC-Us, participation levels for
African-Americans and Hispanics exceeded the rates for whites
and Asians.
VI.
Impact Findings for AFDC-FGs
The next
two sections discuss the effects, or impacts, of Jobs-First
GAIN on employment, earnings, and welfare receipt. Impacts
were estimated in two steps. First, for each outcome measure,
separate averages were calculated for the experimental and
control groups. These calculations included all members of
each research group, and controlled for differences in members’
background characteristics, such as prior educational attainment,
that may have affected their chances of finding and keeping
a job. Second, the control group average was subtracted from
the experimental group average. The difference represents
the added value, or impact, of Jobs-First GAIN’s
combination of services, messages, and mandatory participation
requirements.
Because
of their employment focus, Work First programs are expected
to produce gains in employment and earnings early in the follow-up
period. Jobs-First GAIN met this expectation. Table
1 shows that 54 percent of AFDC-FG experimental group
members worked for pay at some point during year 1, versus
43 percent of control group members — a large increase
of 11 percentage points. On average, control group members
earned $2,438 in year 1, whereas experimental group members
earned an average of $3,187 — a gain of $750, or 31 percent.
(These averages include zeros for those not working during
year 1.) As expected of a Work First program, the program
increased earnings primarily by putting to work recipients
who would not have found jobs on their own. Jobs-First GAIN
attained only small increases in the number of quarters of
employment or in average earnings per quarter for experimental
group members who found a job (not shown in table).
Quarterly
employment rates for experimental group members moved up during
year 1, but the experimental-control group difference in employment
grew somewhat smaller over time. This decrease in impacts
occurred because larger numbers of control group members found
jobs, a phenomenon known as control group "catch-up."
Jobs-First GAIN continued to achieve earnings gains at the
end of year 1. Additional follow-up is needed to determine
whether impacts will be sustained over the long term. Some
previously evaluated Work First programs that produced large
gains early on showed diminishing impacts in year 2.
During
year 1, experimental group members received cash assistance
for about half a month less, on average, than control group
members (not shown in table). Average welfare payments decreased
by $432, or 7 percent (see Table 1).
Percentage reductions in welfare payments grew larger over
the course of follow-up, suggesting that the program will
continue to produce savings in year 2. While most of the AFDC/TANF
savings resulted from reductions in the number of months an
individual received welfare, a substantial portion of the
savings were accounted for by reduced welfare payment amounts
in months when individuals were still receiving welfare. It
is likely that California’s Work Pays financial incentives,
which encouraged people to combine work and welfare in the
short term, and Jobs-First GAIN’s relatively high sanction
rate contributed to this outcome.
A year
after random assignment, 83 percent of control group members
were still on welfare. Jobs-First GAIN reduced this proportion
to 78 percent, an impact of 4 percentage points (see Table
1). These findings, while positive, suggest that DPSS
will face a significant challenge in moving large numbers
of recipients off assistance after they complete their second
year of welfare receipt. Under CalWORKs (California’s
current welfare program), most recipients who reach a two-year
time limit without a job will be required to participate in
community service.
Figure
2 illustrates how Jobs-First GAIN affected self-sufficiency;
it breaks down the experimental and control groups into four
categories based on employment and AFDC/TANF status at the
end of year 1. As shown, Jobs-First GAIN reduced the proportion
of sample members in the most dependent group — those
who were jobless and on welfare — by 9 percentage points,
from 59 to 50 percent. The program raised employment levels
at the end of the first year of follow-up by 7 percentage
points, but most of the increase is attributable to experimental
group members’ combining work and welfare (a gain of
5 percentage points). Jobs-First GAIN only slightly increased
the percentage of recipients employed and off cash assistance.
California’s relatively high welfare grants and Work
Pays financial incentives helped produce these results. Earnings
for employed experimental group members reduced the size of
their welfare grants, but usually did not end their eligibility
for assistance.
In the
year following random assignment, control group members received
Food Stamps for approximately the same amount of time that
they were on welfare: a little over 10 months. Jobs-First
GAIN reduced the length of Food Stamp receipt by as much as
it reduced the length of AFDC/TANF receipt: about two weeks
(results not shown).
Total
Food Stamp expenditures for control group members averaged
$2,179 in year 1. (See Table 1.) In
comparison, the typical Jobs-First GAIN enrollee received
$2,005 in Food Stamps — a decrease of $174, or 8 percent
(about the same size as the percentage reductions in AFDC/TANF
payments).
-
During
year 1, losses in public assistance largely offset earnings
gains, so Jobs-First GAIN had little effect on experimental
group members’ combined income from earnings, AFDC/TANF,
and Food Stamps.
Previous
research shows that Work First programs that, like Los Angeles’s,
assign nearly all enrollees to job search first tend to replace
welfare dollars with earnings but leave families with about
the same amount of income. Jobs-First GAIN produced such results
in year 1. Experimental group members gained $750 in average
earnings during year 1, but lost $606 in average AFDC and
Food Stamp payments. Their net increase in combined income
relative to control group members totaled just $144 (1 percent,
not statistically significant) above the control group average
of $10,411.
-
Through
its substantial employment gain and moderate earnings
increase, Jobs-First GAIN outdid its predecessor, Los
Angeles GAIN, which produced little-to-no first-year impacts
on these measures. The program did not achieve as strong
results as Riverside GAIN and Riverside LFA, but this
disparity may have stemmed from differences in program
environments.
Table
2 illustrates how first-year impacts for single parents
in Los Angeles’s Jobs-First GAIN compare to first-year
impacts for single parents in three previously evaluated programs.
Each result displayed in the table was calculated in several
steps. First, to make results comparable across sites, demographically
similar subsamples from each of the comparison programs and
from Jobs-First GAIN were selected. Second, for each of these
subsamples, experimental-control group differences, or impacts,
were estimated on measures of employment, earnings, and welfare
expenditures during the first year of follow-up and on welfare
receipt at the end of year 1. (All dollar impacts were converted
to 1996 dollars.) Next, impacts estimated for each of the
three comparison programs were subtracted from the corresponding
impacts estimated for Jobs-First GAIN. Table
2 presents these differences. For measures of employment
and earnings, a difference greater than zero indicates that
Jobs-First GAIN produced a larger increase than the comparison
program. For measures of welfare payments and receipt, however,
a positive difference conveys a different meaning: that Jobs-First
GAIN was less effective than the comparison program because
its welfare reduction was smaller. Differences in impacts
were tested for statistical significance. In Table
2, stars next to a difference indicate that it achieved
statistical significance. Lack of statistical significance
means that the impact of Jobs-First GAIN was essentially the
same as the impact of the comparison program.
Table
2 shows that the Jobs-First GAIN program was more successful
than the original Los Angeles GAIN program. Jobs-First GAIN’s
first-year employment increase was 9 percentage points larger
than that of the earlier program, and its earnings gain was
$761 larger. In contrast, the two programs produced similar
impacts on welfare payments and receipt. These results indicate
that a Work First program can be more effective than a basic-education-focused
program in a major metropolitan area.
Jobs-First
GAIN’s first-year employment and earnings impacts fell
short of Riverside GAIN’s unusually strong results by
6 percentage points and $548, respectively (see Table
2). In addition, Riverside GAIN reduced welfare payments
by $441 more than Jobs-First GAIN. Decreases in the proportion
on welfare at the end of year 1 were similar for the two programs.
Like Riverside
GAIN, Riverside LFA produced an unusually large impact on
employment, which exceeded Jobs-First GAIN’s by 7 percentage
points. Both programs, however, produced similar increases
in average earnings. Riverside LFA was somewhat more effective
than Jobs-First GAIN (by $265) in lowering welfare expenditures.
Both programs reduced welfare receipt at the end of year 1
by about the same amount.
It is
unclear whether differences between the impacts of Jobs-First
GAIN and those of the two Riverside programs resulted from
differences in the way the programs were implemented or because
of other factors, such as differences in their program environments
(Los Angeles County is a large urban center, whereas Riverside
County is exurban) or in unobservable characteristics of their
sample members.
-
Jobs-First
GAIN benefited a broad cross section of the welfare caseload,
producing impacts for recipients with the most as well
as the fewest barriers to employment, for people of different
racial and ethnic backgrounds, and for recipients in all
parts of Los Angeles County. Such consistency of impacts
is not always found among Work First programs.
Jobs-First
GAIN produced impacts for subgroups that are typically considered
the least job ready: the "nongraduates" (those who
lacked a high school diploma or a GED certificate when they
were randomly assigned to the experimental or control group),
those who did not work for pay in the year prior to random
assignment, and the "most disadvantaged" recipients.
(These subgroups are not mutually exclusive.) The latter subgroup
contains nongraduates who did not work in the year prior to
random assignment and who had received welfare payments for
at least two years cumulatively before random assignment.
They face more barriers to employment than any other subgroup
examined in this study.
It is
particularly important to learn how Jobs-First GAIN affects
nongraduates because there has been uncertainty about whether
it is worthwhile to encourage recipients with low educational
attainment to take a job right away. In Jobs-First GAIN, about
40 percent of nongraduates attended job club, but only 10
percent attended education or training classes. In contrast,
in a basic-education-focused program like the previous GAIN
program in Los Angeles or in a Work First "mixed services"
program like Riverside GAIN, these recipients most likely
would have attended an education or training activity first,
as opposed to a job search activity. As shown in Table
3, Jobs-First GAIN raised employment and earnings and
decreased welfare payments and receipt for this subgroup,
demonstrating that job-search-first programs can work for
recipients who lack education credentials, and that education
and training are not the sole route to success.
Welfare-to-work
programs especially need to help recipients who lack recent
employment experience because they typically have much more
difficulty obtaining a job on their own than do recipients
with a recent work history. Table 3
shows that a mere 28 percent of control group members in the
Jobs-First GAIN Evaluation who did not work in the year prior
to random assignment obtained a job during the first year
of follow-up. Jobs-First GAIN produced a large (14 percentage
point) increase in employment and raised average earnings
by more than $800 for this subgroup. Reductions in first-year
AFDC/TANF payments were moderate.
For the
most disadvantaged sample members, Jobs-First GAIN raised
employment by a large amount (15 percentage points) and almost
doubled average earnings (with a $784 gain). The program also
reduced AFDC/TANF expenditures and receipt by moderate and
small amounts, respectively. These results provide convincing
evidence that even the most dependent welfare recipients can
benefit from a Work First program.
Jobs-First
GAIN also benefited recipients facing less serious barriers
to employment. Sample members who worked in the year prior
to random assignment can be considered the most job ready
subgroup. As shown in Table 3, 70 percent
of control group members in this subgroup worked in the first
year of follow-up, and first-year control group earnings averaged
$4,639. Jobs-First GAIN increased employment and earnings
for sample members with recent work experience by 6 percentage
points and $638, respectively. The employment gain was significantly
smaller than the gain for recipients who lacked recent work
experience, probably because the latter group was less likely
to find work without the program’s help. Otherwise, impacts
for the two subgroups were similar.
As shown
in Table 3, the program produced employment
and earnings increases for the four main racial/ethnic subgroups
in the single-parent sample: whites, African-Americans, Hispanics,
and Asians. There were modest reductions in welfare receipt
for three of the four subgroups.
In general,
first-year impacts for early enrollees did not differ by a
statistically significant amount from those for regular enrollees
(see Table 3), although trends in quarterly
earnings suggest that the program may work better for early
enrollees than for regular enrollees in year 2 (not shown
in table).
VII.
Impact Findings for AFDC-Us
In the
first year of follow-up, 42 percent of control group members
in the AFDC-U group worked for pay (see Table
1). The average control group member earned $2,455 (zeros
for people who never worked are averaged into this measure).
Jobs-First GAIN produced a 12 percentage point increase in
the proportion employed and an earnings gain of $1,082, or
44 percent. About two-thirds of the earnings gain resulted
from the program’s help in finding jobs for recipients
who would not have worked on their own. The remainder was
due equally to a longer duration of employment and higher
average earnings for recipients who would have worked anyway.
Employment and earnings gains remained substantial throughout
the follow-up period and are therefore likely to persist in
year 2.
These
results gain particular importance in light of TANF’s
work requirements, which are much stricter for AFDC-Us than
for single parents. TANF requires a higher percentage of two-parent
families to work or participate in employment-related activities
(in 1998, 75 percent of two-parent families versus 30 percent
of single parents) and specifies that they work more hours
per week in order to be counted as participants (35 versus
20).
The program
decreased the average length of AFDC/TANF receipt for the
AFDC-Us by a moderate amount (about 2˝ weeks, not shown in
tables) and reduced welfare expenditures by $667, or 10 percent
(see Table 1). As was the case for single
parents, most of these savings resulted from case closures,
but a substantial portion was due to lower average monthly
grants for those still on welfare. At the end of year 1, 77
percent of experimental group members versus 83 percent of
control group members were on welfare (see Table
1). While Jobs-First GAIN’s effect on welfare receipt
was promising, these results suggest that the vast majority
of program enrollees will still receive assistance at the
end of year 2. Jobs-First GAIN also reduced Food Stamp expenditures
by $310, or 11 percent. (See Table 1.)
-
Partly
as a result of California’s generous earnings disregards,
most employed Jobs-First GAIN enrollees still received
AFDC/TANF at the end of year 1. Consequently, the program’s
increase in the percentage employed and off welfare was
small. Jobs-First GAIN achieved a substantial reduction
in the proportion of AFDC-Us who depended on welfare as
their primary source of income, however.
Jobs-First
GAIN lowered the proportion in the least self-sufficient group,
those who were jobless and on AFDC/TANF, from 58 to 47 percentage
points. The overall employment gain at the end of year 1 resulted
partly from the program’s small (4 percentage point)
impact on employment without welfare (12 percentage points
for experimental group members minus 8 percentage points for
control group members) and partly from its similar (5 percentage
point) impact on combining work and welfare (30 percentage
points minus 25 percentage points). (These results are not
shown in tables or figures.)
In the
first year of follow-up, Jobs-First GAIN replaced welfare
dollars with earnings but did not raise average combined income
for members of two-parent families. Both experimental and
control group members received about $12,000 in earnings,
AFDC/TANF payments, and Food Stamps. (This measure of income
includes earnings only from the sample member, and not from
the other parent on the case.) Previously evaluated programs
tended to actually reduce overall income for members of two-parent
families.
-
Jobs-First
GAIN achieved similarly large increases in employment
for male and female AFDC-Us. First-year earnings gains,
however, were nearly twice as large for men as for women.
Over the course of follow-up, quarterly earnings gains
for men and women began to converge.
As shown
in Table 4, more male than female control
group members found a job during the first year of follow-up:
about one-half versus one-third. This result is not surprising,
because more men than women worked before random assignment.
Male control group members earned more than twice as much,
on average, as their female counterparts: $3,274 versus $1,497.
(Zero earnings for jobless sample members are averaged into
this measure.)
During
year 1, Jobs-First GAIN boosted employment by 13 percentage
points (to 43 percent) for women and by 11 percentage points
(to 63 percent) for men, both representing large increases
relative to the control group. Earnings gains were nearly
twice as large for men ($1,449) as for women ($740), despite
the similarity in their employment increases. This is because
male experimental group members who worked earned more per
quarter (on average) than their control group counterparts,
but female experimental group members did not (not shown in
tables).
The data
suggest that both subgroups will continue to achieve employment
and earnings gains in year 2, but impacts for men will probably
grow smaller. At the beginning of year 2, the employment gain
for men declined to 8 percentage points. Their earnings increases
also diminished slightly but remained large ($281). For women,
employment impacts remained large, and earnings gains peaked
at $253, the beginning of year 2, indicating that the women
may eventually approach the earnings gains of men.
-
Jobs-First
GAIN reduced first-year AFDC/TANF payments for both men
and women. At the end of year 1, the program decreased
the proportion of men on welfare by a moderate amount,
but it did not decrease AFDC/TANF receipt for women.
Despite
their higher earnings levels, male control group members received
more AFDC/TANF dollars, on average, than their female counterparts
during year 1: $7,133 versus $6,495 (see Table
4). It is unclear why this apparent inconsistency occurred.
In addition, they were more likely to be on welfare at the
end of year 1: 85 percent of men compared to 80 percent of
women received cash assistance.
Jobs-First
GAIN reduced first-year AFDC/TANF payments by a significantly
larger amount for men ($848, or 12 percent) than for women
($424, or 7 percent). For both subgroups, the program continued
to reduce AFDC/TANF payments at the end of follow-up, indicating
that savings will continue into year 2 (not shown in tables).
At the end of year 1, Jobs-First GAIN reduced welfare receipt
for men only, by 7 percentage points (see Table
4).
As shown
in Table 4, AFDC-Us who lacked a high
school diploma or a GED certificate achieved large employment
and earnings gains — 13 percentage points and $1,256,
respectively — and moderate AFDC/TANF reductions.
Of the
control group members who had been jobless for at least a
year before random assignment, only one-fourth found employment
in the year after random assignment, and their earnings averaged
just $1,240. Jobs-First GAIN produced a large (14 percentage
point) employment gain for this group (which exceeds the gain
for recipients who worked in the year prior to random assignment)
and a moderate earnings increase.
In the
first year of follow-up, about one-fourth of the "most
disadvantaged" control group members worked for pay.
Year 1 earnings and AFDC/TANF payments for control group members
in this subgroup averaged about $900 and $7,500, respectively.
Nine in 10 were still on welfare at the end of year 1. Jobs-First
GAIN raised employment by a large amount and more than doubled
average earnings. The program also reduced AFDC/TANF expenditures
and receipt.
Table
4 shows that Jobs-First GAIN also benefited more job ready
sample members. Although almost three-fourths of control group
members with recent employment experience worked in the first
year of follow-up, the program raised employment levels even
further — by 8 percentage points. First-year earnings
gains for experimental group members who worked in the year
prior to random assignment averaged $1,597 above the relatively
high control group level of $4,731. Higher earnings on the
job made a greater contribution to the overall earnings gain
for this subgroup than did job-finding itself.
As shown
in Table 4, Jobs-First GAIN produced
employment gains and welfare savings for recipients in each
of the three main racial/ethnic groups among the AFDC-Us:
non-Hispanic whites, Hispanics, and Asians. (There were not
enough African-American AFDC-U sample members for reliable
analysis.) Hispanics experienced the largest, most consistent
impacts. These results appear more impressive in light of
the fact that about half of the non-Hispanic whites and Hispanics,
and almost three-fourths of the Asians, lacked English proficiency
at random assignment. They show that Work First programs can
help recipients who have different national origins and languages.
VIII.
Discussion and Implications of the Findings
The findings
presented in this Executive Summary show that, in the short
term at least, Los Angeles County’s transition from a
basic-education-focused welfare-to-work program to a strongly
employment-focused program worked. Jobs-First GAIN achieved
relatively large first-year employment gains, a necessary
prerequisite for longer-term success. Employment impacts exceeded
those for the earlier GAIN program by a wide margin. Even
more impressive was the fact that Jobs-First GAIN attained
positive effects in a large urban setting, where welfare-to-work
programs have traditionally fared poorly. Moreover, the program
raised employment levels for many types of welfare recipients,
including persons facing relatively serious barriers to employment.
It is also interesting to note that Jobs-First GAIN achieved
these results while attaining relatively low levels of participation
in job club and other employment-related activities. These
findings suggest that programs that impart a strong pro-employment
message (as Jobs-First GAIN did) may thereby encourage a portion
of the caseload to find work who may not have done so on their
own initiative.
The first-year
findings also point to areas where the program has not yet
attained its goals. Notably, the program did better at reducing
welfare expenditures than in moving recipients off assistance.
This finding may be expected, because the program encouraged
enrollees to combine work and welfare in the short term, taking
advantage of California’s Work Pays financial incentives.
At some point, however, the program will need to increase
the rate of exits from assistance — otherwise, many adult
recipients will eventually begin to encounter lifetime limits
on eligibility for assistance. The key issue is whether experimental
group members begin advancing to better jobs — offering
stable, full-time employment at hourly wages exceeding the
state’s minimum wage (presently $5.75) by several dollars
— more frequently than their counterparts in the control
group. As discussed above, the program has so far boosted
average earnings mainly by putting more people to work, but
not yet by helping people get better jobs. A final issue concerns
recipients’ income. During the first year, Jobs-First
GAIN increased experimental group members’ self-sufficiency
by replacing welfare dollars with earnings. It has not, as
yet, increased their overall income, at least as measured
by earnings, welfare, and Food Stamps. It remains to be seen
whether the program can boost incomes and move recipients
out of poverty.
IX.
Future Research
In late
1999, MDRC will issue its final report on the Jobs-First GAIN
Evaluation. This report will include: (1) two-year impact
findings on program participation, employment rates, and earnings,
as well as on AFDC/TANF and Food Stamp receipt and payments;
(2) an expanded study of program impacts and other outcomes
— including household composition and income, use of
transitional child care and medical services, incidence of
food insecurity and hunger, and child well-being; and (3)
a benefit-cost analysis, comparing increased program costs
to welfare savings (and associated administrative costs) and
increased taxes paid by sample members. The analysis will
also consider whether sample members were made better off
financially as a result of Jobs-First GAIN, that is, whether
their gains in earnings, fringe benefits, and the Earned Income
Tax Credit exceeded their loss of income from increased taxes
and reductions in AFDC/TANF, Food Stamps, and other cash and
noncash benefits. MDRC will estimate these effects from automated
participation, earnings, and public assistance records for
the full sample and from data collected from a survey of selected
AFDC-FG sample members.
 Notes:
Sections VI and VII compare employment levels for all experimentals
(participants and nonparticipants) with people in the control
group and thus provide a more complete and accurate measure
of the program’s success.
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