As welfare caseloads have declined over the past decade, policymakers and administrators have focused increasingly on long-term and hard-to-employ recipients who have not made a stable transition from welfare to work. Many of these recipients face serious barriers to employment, such as physical and mental health problems, substance abuse, and limited work and educational backgrounds. This report presents final results from an evaluation of two different welfare-to-work strategies for hard-to-employ recipients of Temporary Assistance for Needy Families (TANF) in Philadelphia. The study is part of the Enhanced Services for the Hard-to-Employ Demonstration and Evaluation Project, which is testing innovative employment strategies for groups facing serious obstacles to finding and keeping a steady job. The project is sponsored by the Administration for Children and Families and the Office of the Assistant Secretary for Planning and Evaluation in the U.S. Department of Health and Human Services (HHS), with additional funding from the U.S. Department of Labor. It is being conducted by MDRC, a nonprofit, nonpartisan research organization, along with the Urban Institute and other partners.
The first approach being tested is a transitional jobs model that was operated by the Transitional Work Corporation (TWC). TWC quickly placed recipients who were referred by the welfare agency into temporary, subsidized jobs; provided work-related supports; and then, building on this work experience, helped participants look for permanent jobs. The second model, called "Success Through Employment Preparation" (STEP), aimed to assess and address participants’ barriers to employment — such as health problems or inadequate skills — before they went to work.
The evaluation uses a rigorous design in which nearly 2,000 long-term and potential long-term welfare (TANF) recipients were assigned at random either to TWC or STEP or to a control group that did not participate in either program. The research team followed all three groups for four years, using surveys and administrative data. Results show that:
- Early in the follow-up period, the TWC program group members had significantly higher employment rates than the control group members, but the difference faded, and the groups had similar outcomes beyond the first year. The TWC group also received significantly less welfare assistance in the first year and a half of follow-up, but these impacts also did not last.
- Recipients who were assigned to the STEP program did not work or earn more, or receive less welfare, than the control group. The results may have been affected by the fact that many people who were assigned to STEP did not participate in the program for long periods.
The results suggest some fairly clear patterns. The TWC program substantially increased employment in the short term, but this and other studies suggest that, in order to sustain impacts, short-term transitional jobs programs need to help more people obtain and retain permanent jobs. The STEP program did not increase employment, adding to a growing body of evidence suggesting that it can be difficult to engage welfare recipients in extensive preemployment services long enough to significantly improve their employability.