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About the Series
Assessing the New Federalism is a multi-year Urban Institute project designed to analyze the devolution of responsibility from the federal government to the states for health care, income security, employment and training programs, and social services. Researchers monitor program changes and fiscal developments. In collaboration with Child Trends, Inc., the project studies changes in family well-being. The project aims to provide timely, nonpartisan information to inform public debate and to help state and local decisionmakers carry out their new responsibilities more effectively.
Key components of the project include a household survey, studies of policies in 13 states, and a database with information on all states and the District of Columbia, available at the Urban Institute's Web site. This paper is one in a series of occasional papers analyzing the information from these and other sources.
Work has replaced welfare as the nation's preferred strategy for getting disadvantaged families the resources needed to meet the basic material needs of their at-risk children. For this strategy to succeed, parents (and other caretakers) in these families must be able to find jobs with adequate pay and then perform well enough to retain those jobs. This is a tall order for many recipients of Temporary Assistance for Needy Families (TANF), the nation's principal "safety net" program for low-income families since it replaced Aid to Families with Dependent Children (AFDC) in 1997. Many TANF recipients face serious, often multiple, obstacles to employment, such as limited work experience and poor health or education.1
Education, training, and employment services can break through these barriers by increasing work skills and access to good jobs. For the past 30 years, states have worked to deliver these services to welfare recipients in an effective way, creating extensive employment and training service systems for low-income parents on cash assistance. Those systems - and their evolution - have become more important in recent years, as new federal and state policies advocate work over welfare as the best source of economic security for most families. Together with other policy changes in the late 1990s (discussed below), the federal push for welfare reform has led or required states to reassess - and potentially overhaul - their employment and training systems for TANF recipients. This paper provides a picture of the existing welfare-to-work systems in 13 selected states and the nation in 1996 as these changes were about to get under way.
1. Policy Background and Research Goals
Two strategies have dominated welfare-to-work reform over the past decade: make work mandatory and "make work pay." To make work possible for more mandatory participants - and to make work pay for everyone - U.S. policymakers have generally favored the solution the free market demands: make better workers. This has been the primary goal of state education and training programs for welfare recipients for many years. Over that time, states have also pursued job placement and work experience as faster - and perhaps better - ways to turn inexperienced workers into valued employees.
Consistent with these themes, Congress passed three acts between 1996 and 1998 changing how states operate their welfare and workforce development programs to better support employment. These changes could strongly influence the types of employment and training services welfare recipients receive in the new century.
First, in 1996, the nation's largest cash assistance program for low-income families, AFDC, and its work support component, the Job Opportunities and Basic Skills program (JOBS), were converted into welfare reform block grants under the control of state governments. Prior to that point (since 1988), JOBS had provided education, training, job placement, and work experience to AFDC recipients required or volunteering to take part in the program. The switch to block grants took place through the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (PRWORA), which created TANF as the state-directed successor to AFDC and gave states enhanced freedoms to determine the employment and training services offered to TANF recipients, if any.
Second, additional federal legislation provided funds for states and localities to expand welfare-to-work services to the hardest-to-employ recipients, beginning in 1998. The Balanced Budget Act of 1997 allocated $3 billion over two years for this purpose through the Welfare-to-Work Grants Program, an initiative to support state and local efforts to serve the least employable TANF recipients as well as absent parents and recipients nearing their lifetime limit on benefit eligibility.2
Finally, the most recent piece of federal legislation, the Workforce Investment Act of 1998, requires states to move more quickly in integrating employment and training services into "one-stop" career centers serving multiple populations, including welfare recipients, dislocated workers, and other individuals in need of help finding or succeeding in jobs. As a result of these changes, it is widely anticipated that the systems states use to provide employment and training services for welfare recipients will change in important ways during the late 1990s and beyond.
Goals of the Paper
The consequences of these national reforms are now unfolding at the state and local levels, where employment and training services have always been designed and delivered. Where these reforms will lead is hard to anticipate, and the independent effects of each act may never be known. Still, one vital question can be answered with confidence at this point: Where did state employment and training systems for welfare recipients initially start as this era of federally initiated reforms began? This paper addresses this question by looking at the baseline year for federal reform - 1996. An accurate profile of the welfare-to-work system as it existed in 1996 - the one fixed point in a kaleidoscope of change - will be indispensable to understanding how states respond to their new freedoms (and obligations), how employment and training systems evolve in the process, and how welfare policy is strengthened or weakened as a result.
There has always been great variation in how employment and training services are delivered to welfare recipients, both within and among states and - in recent years - over time. In the first half of the 1990s, many states began their own welfare-to-work reforms by obtaining waivers from federal requirements for JOBS and related programs.3 Though focused in other policy areas (e.g., on AFDC earnings disregards and time limits), these earlier reforms undoubtedly affected the evolution of employment and training service systems for welfare recipients under the JOBS model. But the reforms were implemented at different times in different states - often for just a subset of counties - and emphasized different employment goals and strategies in different places. As a result, 1996 was not a static, baseline year so much as a "snapshot" of an evolving picture about to be redirected by national legislation.
To capture this cross-state variation at a common point in time, welfare-to-work services in 13 selected states for the period leading up to PRWORA's enactment in August 1996 are examined here. The states studied — Alabama, California, Colorado, Florida, Massachusetts, Michigan, Minnesota, Mississippi, New Jersey, New York, Texas, Washington, and Wisconsin — were home to more than half the families receiving low-income cash assistance in 1996. They cover all regions of the country and a range of large and small states with varying social policy histories. Taken individually, and in relation to one another, these states are a centerpiece of the Urban Institute's Assessing the New Federalism project, a study to assess the devolution of social policy to state and local government at the end of the century. The same 13 states will be revisited in 2000 to examine changes in employment and training services for welfare recipients that have taken place since 1996, including changes in policy focus, service delivery mechanisms, and fiscal commitments.
Because many dimensions of states' welfare employment and training systems are changing simultaneously, a broad yet detailed portrait is needed to fully understand the pre-PRWORA "picture." Information presented here includes
- The extent and sources of employment and training services for welfare recipients in 1996 (section 2);
- The employment goals and philosophies pursued by each state at that time (section 3);
- The mix of services received by welfare recipients from the largest service source, the JOBS program (section 4);
- Integration of JOBS and related employment and training systems at the state and local levels (section 5);
- The financial resources devoted to welfare employment and training services in each state (section 6); and
- Summary and questions for further investigation (section 7).
Preview of Findings
A look at each state's major employment and training service sources and their utilization by AFDC recipients reveals that 20 percent of AFDC adults participated in employment-oriented activities provided by JOBS or Job Training Partnership Act (JTPA) programs during the 12-month period just prior to TANF.4 Under the new legislation, the scale of service delivery could change dramatically from this reference point. For example, states that perceive a greater need to equip recipients for work because of TANF's individual work requirements and five-year time limit on benefits have room — if they choose (and have the resources) — to expand their employment assistance systems by orders of magnitude. Conversely, a state could decide to discontinue all work assistance services for TANF recipients under the block grant system. Simple reductions in the number of adults receiving welfare could shrink the welfare-to-work service system in some states.
Whatever scale is chosen for TANF work services, PRWORA gives states added incentives to focus on rapid work attachment rather than longer-term human capital development in education and training programs. Some states may see rapid linkage to the labor market as the only way for some — or possibly all — TANF recipients to meet TANF's ambitious work activity requirements or to ensure that recipients work long enough to become self-supporting before benefit time limits expire. Sections 3 and 4 demonstrate that in 1996 some states focused their welfare-to-work efforts on quick job attachment by adopting a Work First philosophy as part of their pre-PRWORA waiver reforms. Section 3 considers where each state stood in this regard as perceived by state policymakers and other state-level informants. Section 4 provides a more detailed assessment of employment and training emphasis at the local level using administrative records for JOBS participants. This second assessment describes the JOBS service mix in each of the 13 focal states — information of interest not just to TANF planners in those states but to all states considering service adjustments as PRWORA and the Welfare-to-Work Grants Program move forward.
Overlapping these changes are the consolidation requirements of the Workforce Investment Act (WIA). The success of WIA's "one-stop" employment centers will hinge, for welfare recipients, on the degree to which employment services for economically disadvantaged families can be integrated into more "mainstream" service delivery systems for experienced, higher-skill workers. In turn, the potential for "mainstreaming" welfare-to-work services will depend in part on a state's history of combining, or overlapping, these two historically distinct systems. Section 5 discusses the fact that historical experience with program integration is fairly limited in most of the 13 states as measured by the degree of formal coordination between alternative service delivery systems at the state level in 1996. Though still modest, somewhat more coordination and integration appears to have taken place at the local level based on the degree to which local JTPA programs and employment service offices served welfare recipients.
A final, critical set of questions facing states concerns the unprecedented opportunity for spending a great deal of or very little money on employment services for welfare families. Both PRWORA and the Welfare-to-Work Grants Program expand total federal dollars available to states for employment and training services compared with projected JOBS allocations — and soften or eliminate state matching requirements. Declining caseloads could further expand the funds available to assist the typical remaining recipient. Countering these inducements to spend more per recipient is the option states have to invest most or all of their TANF block grant funds in other forms of assistance — cash payments, subsidized child care, emergency shelter, vouchers (for transportation or baby products), and so on — without spending any funds at all on work preparation and training.5 Moreover, the new funds dedicated to employment and training services — the new Welfare-to-Work grants — do not always provide an eagerly awaited opportunity to spend more, as witness the fact that some states have turned down their federal allotments.6
As a result of these factors, spending patterns on employment and training activities — just like the service mix — could change considerably as the result of the recent reforms. Section 6 looks at spending patterns in the prereform year of 1996 as a baseline for later changes, finding a range of funding levels among the 13 focal states. Interestingly, rank in spending prior to federal reform depends on the point of reference used, i.e., whether expenditures are considered in relation to the size of a state's AFDC caseload, the number of recipients getting employment and training services, the size of the overall state budget, or the state's fiscal capacity (as measured by per capita income). Costs also varied depending on whether a state emphasized rapid work placement activities or investment in human capital through education and training; the former service emphasis was usually, though not always, less expensive.
Notes from this section
1. Zedlewski (1999) reports that in 1997 at least 40 percent of the national TANF population faced two or more significant obstacles to work.
2. See Nightingale and Brennan (1998) for a detailed program description.
3. See U.S. Department of Health and Human Services (1997) for a summary of state waiver policies in place as of early 1996.
4. Participation of some individuals could have been limited to just one or two hours of counseling or training over the course of the year, although longer and more intensive participation was the norm. Data on the duration and intensity of JOBS participation are not available.
5. TANF's maintenance-of-effort (MOE) requirements apply to overall spending on all TANF-funded activities, including - in addition to employment and training services - cash assistance, diversion grants, child care subsidies, and other family support functions. No MOE dollars - nor any federal block grant monies - need to be spent specifically on job search, education, or training activities.
6. Six states are in this group, including one of the Assessing the New Federalism (ANF) focal states: Idaho, Mississippi (ANF focal state), Ohio, South Dakota, Utah, and Wyoming.
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