Lessons from the National Evaluation of Welfare-to-Work Strategies
Ideas and Evidence
What Does MDRC’s Research Really Say About Work Requirements?
The recent squabble over raising the debt ceiling resurfaced the issue of work requirements in public assistance programs like Temporary Assistance for Needy Families (TANF), SNAP (or food stamps), and Medicaid. Both sides in the debate cited MDRC’s research to support their positions. As a nonpartisan research organization, MDRC does not take stands on legislation, but we’d like to clarify what we have studied and learned about this topic.
In short, most of MDRC’s studies do not speak to the effect of work requirements per se. We have studied many programs that provided employment services to parents receiving TANF cash assistance and required those parents to participate in the services. Each program we studied was different, but the broad conclusion is that most of them modestly increased recipients’ employment rates and earnings and reduced their receipt of welfare benefits, relative to people in a control group, who were neither eligible for nor required to participate in the services. However, the increases in employment and earnings were usually short-lived, and the programs did not significantly increase families’ total income from welfare and work. Whether one sees this pattern of results as a “success” depends on one’s view of the purpose of the programs.
What Did MDRC Study?
Over the past four decades (but particularly in the 1980s and 1990s), MDRC evaluated many welfare-to-work programs—that is, programs and policies designed to boost employment among adults receiving cash assistance. All the studies focused on recipients of TANF or its predecessor, Aid to Families with Dependent Children, which means that most of the adult recipients were single mothers. Most of the studies used a randomized controlled trial (RCT) design.
Each program that we studied was somewhat different. All of them provided some services designed to help people prepare for work, typically job-finding assistance, literacy and numeracy instruction, or job skills training. A few provided unpaid job slots (sometimes called “workfare” or “work experience” positions) or paid subsidized jobs. Many of the programs required adult recipients to participate in the activities just described. Those who failed to do so without a valid reason could have their benefits reduced or eliminated. Various groups of recipients (for instance, those with very young children or those with medical issues) were exempted from the requirements. Some of the programs boosted financial work incentives by changing the rules to allow recipients to keep more of their welfare benefits when they started working. Others placed time limits on the amount of time people could receive benefits.
Do Work Requirements Work?
Unfortunately, the question of whether work requirements work is very hard to answer directly, for two reasons. First, it is not always clear what people are referring to when they use the term “work requirements.” Ironically, one thing the term usually does not mean is a requirement to work. Many parents apply for assistance precisely because they are unable to find a job or earn very low wages, and no decent-sized state or county has been willing to provide subsidized jobs or workfare slots for all recipients who might need them. That would be complicated and expensive.
In practice, parents receiving TANF assistance are usually required to work or participate in activities designed to prepare for work. Each program is different, and the programs operate in different contexts. For example, it is plausible that work requirements would have different effects in a state that provides $200 a month in welfare benefits to a family of three versus one that provides $700 per month. Nevertheless, we try to draw some broad conclusions below.
Second, and more important, it is not clear what it means for a work requirement to “work.” For some people, the goal of a work requirement is simply to make sure that people are not “getting something for nothing.” Others believe that work requirements are successful if they increase the number of people who have jobs and/or reduce the number receiving welfare. But many advocates take a different view: They believe that the objective should be to make people—in particular, children—better off financially, in which case it is not necessarily enough to increase employment if people simply trade welfare benefits for earnings. As an organization dedicated to learning what works to reduce poverty and improve economic mobility, MDRC takes this view very seriously, and our studies were designed to assess the programs’ effects on families’ financial well-being.
And then there are the consequences of work requirements. Few would argue that people who are unable to comply with work requirements—for example, because they have serious physical or mental health issues or no safe child care options—should be penalized. But it is inevitable that this will happen, even in the best-implemented program. For some observers, that is unacceptable. Others believe the benefits of work requirements outweigh the costs.
With all that said, here is a quick summary of what MDRC learned from its many studies of welfare-to-work programs.
MDRC has very little direct evidence about the impact of work requirements. In almost all the studies we did, work requirements (or, more precisely, participation requirements) and employment services were bundled together. To measure the impact of only the requirements, one would need to compare a group of people who were offered employment services on a voluntary basis with a similar group who were offered the same services on a mandatory basis.
With or without work requirements or employment services, most welfare recipients find jobs. The most comprehensive study MDRC did was the Moving People from Welfare to Work | MDRC, which tested 11 different programs across the country. In each program, welfare recipients were randomly assigned to a control group that was neither eligible for nor required to participate in employment services or to a program group that was both eligible for and required to participate in services. Over a five-year period, about three-quarters of the people in the control group found jobs in the formal labor market.
Most of the programs that offered employment services and required recipients to participate in them increased employment rates or earnings temporarily and reduced welfare receipt but did not make families better off financially. Focusing again on the NEWWS evaluation: In almost all the programs, people in the program group worked and earned more, on average, than people in the control group at some point over a five-year period. They are also received less welfare. Most people in both groups worked sporadically in low-paying jobs, and the total amount of income from welfare and work was about the same for the two groups. In a few programs, income was actually lower for the program group. The program that produced the largest, most sustained effects within the five-year period used a mix of services, including some short-term job training. Later analysis showed that none of the programs led to long-term (that is, 10-15 years) increases in parents’ employment or earnings trajectories.
Extrapolating to Today
It is not straightforward to extrapolate the results described above to the current day and to different public benefits programs. The TANF program is very different now than it was in the 1990s, when the NEWWS study took place. For example, in 1996, there were about 68 families receiving TANF benefits for every 100 families with children with income below the poverty line. In 2020, the figure was 21 families. It is reasonable to assume that the characteristics of recipients may have changed substantially in the intervening years. Similarly, penalties for noncompliance with work requirements are harsher today in many states.
In thinking about other programs, it is important to note that the people who receive SNAP benefits and are able-bodied adults without dependents (the main focus of work requirement discussions) are, by definition, very different from adult TANF recipients, who are all parents, as is the labor market that they participate in.