National Evaluation of Welfare-to-Work Strategies How Effective Are Different Welfare-to-Work Approaches? Five-Year Adult and Child Impacts for Eleven Programs U.S. Department of Health and Human Services Administration for Children and Families Office of the Assistant Secretary for Planning and Evaluation U.S. Department of Education Office of the Deputy Secretary Planning and Evaluation Service Office of Vocational and Adult Education December 2001 Prepared by: Gayle Hamilton Stephen Freedman Lisa Gennetian Charles Michalopoulos Johanna Walter Diana Adams-Ciardullo Anna Gassman-Pines Manpower Demonstration Research Corporation Sharon McGroder Martha Zaslow Jennifer Brooks Surjeet Ahluwalia Child Trends With Electra Small Bryan Ricchetti Manpower Demonstration Research Corporation The Manpower Demonstration Research Corporation (MDRC) is conducting the National Evaluation of Welfare-to-Work Strategies under a contract with the U.S. Department of Health and Human Services (HHS), funded by HHS under a competitive award, Contract No. HHS-100-89-0030. Child Trends, as a subcontractor, is conducting the analyses of outcomes for young children (the Child Outcomes Study). HHS is also receiving funding for the evaluation from the U.S. Department of Education. The study of one of the sites in the evaluation, Riverside County (California), is also conducted under a contract from the California Department of Social Services (CDSS). CDSS, in turn, is receiving funding from the California State Job Training Coordinating Council, the California Department of Education, HHS, and the Ford Foundation. Additional funding to support the Child Outcomes Study portion of the evaluation is provided by the following foundations: the Foundation for Child Development, the William T. Grant Foundation, and an anonymous funder. The findings and conclusions presented herein do not necessarily represent the official positions or policies of the funders. To obtain other publications from the NEWWS Evaluation, and for information on how to access the NEWWS Evaluation restricted and public use data files, go to http://aspe.hhs.gov/hsp/NEWWS/index.htm. Selected Publications from This Evaluation Improving Basic Skills: The Effects of Adult Education in Welfare-to-Work Programs. Prepared by Johannes M. Bos, Susan Scrivener, Jason Snipes, and Gayle Hamilton, MDRC. 2001. Washington, D.C.: U.S. Department of Education, Office of the Under Secretary and Office of Vocational and Adult Education; and U.S. Department of Health and Human Services. Evaluating Two Approaches to Case Management: Implementation, Participation Patterns, Costs, and Three-Year Impacts of the Columbus Welfare-to-Work Program. Prepared by Susan Scrivener and Johanna Walter, MDRC. 2001. Washington, D.C.: U.S. Department of Health and Human Services, Administration for Children and Families and Office of the Assistant Secretary for Planning and Evaluation; and U.S. Department of Education. Do Mandates Matter? The Effects of a Mandate to Enter a Welfare-to-Work Program. Prepared by Jean Tansey Knab, Johannes M. Bos, Daniel Friedlander, and Joanna W. Weissman, MDRC. 2001. Washington, D.C.: U.S. Department of Health and Human Services, Administration for Children and Families and Office of the Assistant Secretary for Planning and Evaluation; and U.S. Department of Education. What Works Best for Whom: Impacts of 20 Welfare-to-Work Programs by Subgroup. Prepared by Charles Michalopoulos and Christine Schwartz, MDRC. 2001. Washington, D.C.: U.S. Department of Health and Human Services, Administration for Children and Families and Office of the Assistant Secretary for Planning and Evaluation; and U.S. Department of Education. The Experiences of Welfare Recipients Who Find Jobs. Prepared by Karin Martinson, MDRC. 2000. Washington, D.C.: U.S. Department of Health and Human Services, Administration for Children and Families and Office of the Assistant Secretary for Planning and Evaluation; and U.S. Department of Education. Four-Year Impacts of Ten Programs on Employment Stability and Earnings Growth. Prepared by Stephen Freedman, MDRC. 2000. Washington, D.C.: U.S. Department of Health and Human Services, Administration for Children and Families and Office of the Assistant Secretary for Planning and Evaluation; and U.S. Department of Education. Implementation, Participation Patterns, Costs, and Two-Year Impacts of the Detroit Welfare-to-Work Program. Prepared by Mary Farrell, MDRC. 2000. Washington, D.C.: U.S. Department of Health and Human Services, Administration for Children and Families and Office of the Assistant Secretary for Planning and Evaluation; and U.S. Department of Education. Oklahoma City’s ET & E Program: Two-Year Implementation, Participation, Cost, and Impact Findings. Prepared by Laura Storto, Gayle Hamilton, Christine Schwartz, and Susan Scrivener, MDRC. 2000. Washington, D.C.: U.S. Department of Health and Human Services, Administration for Children and Families and Office of the Assistant Secretary for Planning and Evaluation; and U.S. Department of Education. Do Mandatory Welfare-to-Work Programs Affect the Well-Being of Children? A Synthesis of Child Research Conducted as Part of the National Evaluation of Welfare-to-Work Strategies. Prepared by Gayle Hamilton, MDRC. 2000. Washington, D.C.: U.S. Department of Health and Human Services, Office of the Assistant Secretary for Planning and Evaluation and Administration for Children and Families; and U.S. Department of Education. (continued on inside back cover) This report is dedicated to the memory of Daniel Friedlander (1947-1999), an adroit and insightful researcher of social programs and an enthusiastic and dedicated colleague, mentor, and friend. Daniel was instrumental in developing the research design for the NEWWS Evaluation, formulating its key research questions, and developing the tools for analysis. Daniel’s unswerving commitment to rigorous experimental research and to clear, precise writing is an enduring inspiration to those who carry on his work. Contents List of Tables and Figures x Acknowledgments xvi Executive Summary ES-1 Chapter 1 Introduction 1 I. A Framework for Understanding Program Results 2 II. Research Questions and Design 6 III. Program Environments 7 IV. Program Features 12 A. Self-Sufficiency Approaches 13 B. Degree of Participation Mandate Enforcement 17 C. Other Program Features 21 V. Program Changes in the Last Two Years of the Five-Year Follow-Up Period 24 VI. Control Group Treatment Over Time 26 VII. A Brief Review of Two-Year Impact Results 27 VIII. Contents of This Report 30 2 Research Design, Sample Characteristics, Data Sources, and Analysis Issues 32 I. Research Design 32 A. Random Assignment Designs 32 B. Random Assignment Periods and Procedures 35 II. Analysis Samples and Sample Characteristics 40 A. Analysis Samples 40 B. Sample Characteristics 42 III. Data Sources 48 IV. Analysis Issues 50 A. Calculating Impacts 50 B. Control Group Treatment Over Time 53 3 Impacts on Employment-Related Services and Degree Receipt 60 I. Key Findings 60 II. Analysis Issues 61 III. Review of Two-Year Findings 63 IV. Five-Year Control Group Participation Patterns 64 V. Five-Year Impacts on Participation 66 A. Impacts for the Full Sample 67 B. Impacts by Education Subgroup 70 VI. Impacts on Participation in Year 5 73 VII. Trends Over Time in Participation Impacts 75 VIII. Five-Year Impacts on Degree Receipt 78 A. High School Nongraduates 78 B. High School Graduates 80 -v- IX. Conclusions 82 4 Impacts on Employment and Earnings 83 I. Key Findings 83 II. Expected Effects 84 III. Impacts on Employment and Earnings 85 A. Employment and Earnings Over Five Years 85 B. Employment by Year 89 C. Earnings by Year 95 D. Employment Stability and Earnings Growth 95 E. High School Graduates and Nongraduates 100 IV. Comparing Results for the LFA and HCD Programs 103 V. Effects on Employment and Earnings Impacts by the End of the Control Group Embargo 105 5 Impacts on Public Assistance 108 I. Key Findings 108 II. Expected Effects 109 III. Welfare Receipt and Payments 110 A. Welfare Receipt and Payments Over Five Years 110 B. Welfare Receipt by Year 113 C. Comparing High School Graduates and Nongraduates 118 IV. Food Stamp Payments and Receipt 118 V. Comparing the Effects of the LFA and HCD Programs 121 6 Impacts on Income and Self-Sufficiency 124 I. Key Findings 124 II. Analysis Issues 125 A. Defining Self-Sufficiency 125 B. Direct and Indirect Effects on Self-Sufficiency and Income 125 C. Measurement Issues 126 III. Impacts on Income 126 A. Combined Income Over Five Years 126 B. Combined Income by Year 128 C. Impacts on Combined Income for Educational Attainment Subgroups 132 IV. Impacts on Employment and Welfare Status Over Five Years 134 V. Comparing the Effects of the LFA and HCD Programs on Income 137 VI. Impacts on Respondent and Household Income at the End of Year 5 139 A. Additional Sources of Income for Respondents 139 B. Household Income 139 7 What Works Best for Whom: Economic Effects by Subgroup 141 I. Key Findings 141 II. Analysis Issues 142 III. Impacts by Subgroup 145 A. Welfare History 145 B. Recent Work Experience 147 C. Composite Level of Disadvantage 150 -vi- D. Race and Ethnicity 154 IV. Comparing the LFA and HCD Programs 158 V. What Has Been Learned? 158 8 Impacts on Health Care Coverage 159 I. Key Findings 159 II. Expected Effects 160 III. Health Care Coverage at the End of Year 5 161 A. Employment and Employer-Provided Coverage 161 B. Public Versus Private Coverage for Respondents 164 C. Coverage for Children 166 IV. Transitional Medicaid Use During the Five-Year Follow-Up 166 V. Loss of Coverage by the End of Year 5 169 VI. Conclusions 171 9 Impacts on Household and Personal Circumstances 173 I. Key Findings 174 II. Measurement Issues 176 A. Marital Status and Household Composition 176 B. Moving and Housing Status 177 C. Employment-Related and Domestic Abuse 178 III. Effects of Welfare-to-Work Approaches on Marital Status 179 IV. Effects of Welfare-to-Work Approaches on Fertility and Household Composition 183 A.