Working Paper

The GAIN Evaluation

Five-Year Impacts on Employment, Earnings, and AFDC Receipt
Working Paper 96.1

| Stephen Freedman, Daniel Friedlander, Winston Lin, Amanda Schweder

The paper summarizes the latest finding on the effectiveness of California’s Greater Avenues for Independence (GAIN) Program, a statewide initiative aimed at increasing the employment and self-sufficiency of recipients of Aid to Families with Dependent Children (AFDC), the nation’s major case welfare program. GAIN’s effects are estimated for a sample of 33,000 persons from six counties — including single parents (AFDC-FGs) and unemployed heads of two-parent households (AFDC-Us) — who entered the program between early 1988 and mid-1990. Each sample member was then assigned at random to either an experimental group, who were required to participate in GAIN, or to a control group who were precluded from the program but could seek other services in their community. The paper compares average earnings and AFDC payments for each group over a five-year follow-up, beginning with the first quarter after random assignment (i.e., from quarters 2 through 21). Differences in average earnings and AFDC payments for each group represent the effects, or impacts, of GAIN.

The paper and attached tables and graphs add two years of follow-up to the impact results in Riccio, Friedlander, and Freedman (1994). Among the most noteworthy findings of this paper is that earning gains continued through year five for both assistance groups. GAIN also continued to produce savings in AFDC payments, but only for AFDC-FGs. Such persistence in program effects is unusual for a welfare-to-work initiative and represents a significant achievement for the GAIN program. On the other hand, only about 4 in 10 experimental group members in either assistance group worked for pay during the final year of follow-up; and a relatively large percentage (nearly 40 percent of AFDC-FGs and close to half of AFDC-Us) were receiving AFDC payment at the end of year five. These results indicate that future improvements in the program effectiveness will depend in part on success in helping these long-term AFDC recipients find stable employment.

Summary of Findings

  • Averaged across the six counties (with each county given equal weight), the GAIN program increased the percentage of AFDC-FGs who worked for pay during the five-year follow-up by 4.3 percentage points and raised average earnings by $2,853. Employment impacts generally decreased over time, whereas earnings gains were largest during years four and five.
  • For AFDC-FGs, five-year AFDC savings averaged $1,496, across the six counties. Moreover, the percentage reduction in AFDC payments was somewhat larger during the last two years of follow-up than during years 1, 2, or 3.
  • Five-year earnings gains and AFDC savings for AFDC-FGs were achieved in all six counties, although for some effects and some counties the experimental-control group differences were small and not statistically significant.
  • As before, Riverside’s GAIN program produced the largest increase in total earnings ($5,038) for AFDC-FGs and the largest reduction in AFDC expenditures ($2,705).
  • GAIN increased the percentage of AFDC-Us who found employment by 6.3 percentage points over five years. Earnings gains totaled $1,906 over five years and reached a maximum in year five.
  • GAIN reduced AFDC payments to AFDC-Us by an average of $1,432 over five years. However, AFDC savings declined substantially during years four and five.