You asked for a summary of the Manpower Demonstration Research Corporation (MDRC) study "Jobs First: Final Report on Connecticut's Welfare Reform Initiative," in which MDRC, under contract with the Department of Social Services, compared Jobs First's effects to a control group of welfare recipients who remained under the pre-welfare reform Aid to Families with Dependent Children (AFDC) rules.

SUMMARY

The study randomly assigned about 4,800 single-parent welfare applicants and recipients in Manchester and New Haven to the new Jobs First group or the AFDC group. MDRC estimated Jobs First's effects by comparing the two groups over four years, starting in 1996.

Connecticut's program was one of the first state welfare reform initiatives to include three core components: broader and tougher work requirements, financial incentives to make work pay, and time limits on benefits, according to Gordon Berlin, MDRC's senior vice president, in the report's preface. Berlin writes that Connecticut's welfare reform made a difference because Jobs First succeeded in increasing work and reducing long-term welfare receipt, especially among those facing the most serious barriers to employment. He concludes that the program's work incentives raised overall income only temporarily because of the time limit, but that the study shows a time limit can be implemented without causing widespread, severe harm to families. The study also found small improvements in children's behavior.

JOBS FIRST PROGRAM STRUCTURE DURING STUDY PERIOD

During the study period, the Jobs First program goal was to replace welfare with work. It required welfare recipients to work or participate in employment services intended to help them find work quickly. It emphasized short-term job search activities rather than more extensive education and training. The program offered participants a work incentive by letting them keep their full welfare payments until their earnings reached the federal poverty level. It limited participants to 21 months of cash assistance (with certain limited exemptions), as well as unlimited six-month extensions if they had made a good faith effort to find a job. (Legislation passed in 2001 limited extensions to three and placed an absolute five-year limit on receipt of cash welfare payments, with a few exceptions).

MAIN FINDINGS

The report's main findings are that:

1. Jobs First made progress toward its key goal of replacing welfare with work. By the end of the four-year study period, 51% of parents in the Jobs First group were working and not on welfare, but only 42% in the AFDC group. The proportion of families still on welfare at the study's end was 19% for Jobs First, but 28% for AFDC.

2. Jobs First increased employment and earnings for some. Parents in Jobs First earned 7% ($ 1,800) more, on average, than those on AFDC. In fact, Jobs First participants with the most serious barriers (long-term welfare recipients with no recent work history and no high school diploma) made the biggest gains: 37% ($ 3,600). On the other hand, those with the fewest barriers (high school graduates with recent work history who were not long-term welfare recipients) saw little effect on employment and none on earnings.

3. Jobs First's effects changed over time. At first, the work incentive feature let Jobs First families receive higher welfare benefits and more total income than those on AFDC. Their average total income from both earnings and welfare was 12% higher than the AFDC group in the two years after they entered the study. Employment and earnings gains continued during the study period but because of the cash assistance reductions, income gains diminished. Once they reached the 21-month time limit, the Jobs First group received less in welfare payments and their income gains disappeared. Over the entire four-year period, the two groups received about the same in welfare payments, but the Jobs First group averaged 6% ($ 2,400) more in total income from welfare and earnings. (Levels of material hardship remained high in both groups. )

4. About half of Jobs First participants reached the time limit in the four-year study and two-thirds of them received at least one six-month extension (most of these left welfare in the next two years). Most participants whose benefits ran out because of the time limit were working.

5. Jobs First resulted in small improvements in children's behavior but not in their academic performance. It had mixed effects on adolescents.

FOUR-YEAR ECONOMIC IMPACT

Overall, for the four years, the report showed an economic impact on the two groups as follows:

Table 1: Impacts on Outcomes over Four Years

Source: Excerpt from Table 2, p. 16 of the MDRC report. See Table 3, p. 18 for a breakdown of the income statistics on an average annual basis for the pre- and post-time limit periods.

AFDC GROUP EFFECTS

The study, begun in 1996, was conducted during a period of unusually low unemployment, a 60% decline in the welfare caseload, and publicized changes in state and national welfare policies. These factors also affected the AFDC group, many of whom found jobs and left welfare even without the Jobs First program.

GOVERNMENT'S COSTS

The study found that the government's investment in Jobs First was not offset by decreased welfare payments. Jobs First's net costs for employment services and related support services (those above what the AFDC group cost) was only $ 2,250 per person for the period. Jobs First participants also received more in Food Stamps and Medicaid benefits. But these investments were not offset by welfare savings, as both groups received about the same amount in welfare payments. Overall, Jobs First cost the government about $ 4,150 more per person than the AFDC group.

EFFECT OF SANCTIONS

People whose benefits were reduced for noncompliance with employment-related requirements within four years after entering the study amounted to 8% for the Jobs First group and 5% for the AFDC group. The data did not include sanctions during extensions, when noncompliance resulted in benefit termination not reduction, but the report writers estimated this category at about another 5% for Jobs First, which brings the total sanction rate for that group to about 13%. The MDRC report writers judged this rate to be relatively low and ascribed it to the modest scope of the employment-related requirements and the lack of close monitoring of participation.

CONSIDERATIONS

The report cautions that when drawing conclusions it is important to remember that the program is an unusual hybrid and was implemented in a specific manner. The program's effects reflect the complex interactions of several components:

1. It has one of the shortest time limits in the nation, but during the study period those who still had very low income when they reached the limits often received extensions.

2. The unusually generous earned income disregard allowed many working parents to keep their entire welfare benefit at first.

3. The program provides employment services to help people find jobs but this aspect was not fully implemented during the study.

4. The study took place in an unusually strong economy, which made it easier to find jobs and helped reduce the chances that Jobs First would harm vulnerable families.

FULL REPORT ONLINE

To see MDRC's Overview, Executive Summary and the full report, go to: http: //www. mdrc. org/Reports2002/CT_JobsFirst/CT_JobsFirstSummaryReport. pdf

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