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This chapter considers whether employment- and education-focused programs helped program group members reach a higher level of self-sufficiency and economic security than control group members. First, the chapter analyzes whether programs led to impacts in combined income over five years from earnings (net of payroll taxes), Earned Income Tax Credits (EITC), welfare, and Food Stamps. Next, the chapter considers whether program group members were more likely to leave welfare for employment than control group members. Impacts on these measures were calculated with administrative data. Finally, the chapter looks at program effects on receipt of income from earnings and other sources by sample members and other members of their household at the end of year 5, based on responses to the Five-Year Client Survey.
Promoting self-sufficiency is an important goal for welfare-to-work programs, particularly in the current welfare environment. Programs that increase employment and raise income reduce the likelihood that families will return to welfare and/or experience long-term joblessness and hardship — a possibility under time-limited welfare if families exhaust their eligibility for assistance.
The findings in this chapter may also foreshadow results on other outcomes for families and children discussed in Chapters 9 through 12. Recent research has indicated that programs that increase employment and raise income are likely to benefit children, whereas programs that increase employment without increasing income typically do not. Moreover, programs that increased income resulted in less stress for parents and less domestic violence.(1)
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All welfare-to-work programs seek to increase self-sufficiency, although this concept may take on different meanings. Attaining self-sufficiency can mean ending welfare dependency, the primary goal of many welfare-to-work programs. As discussed in Chapter 5, all programs in the evaluation achieved this goal to some extent, although reductions in welfare receipt were small for some programs. Likewise, a program may promote self-sufficiency by increasing welfare recipients' reliance on earnings rather than welfare benefits. This goal may be accomplished by encouraging welfare recipients to combine work and welfare (at least in the short term) or by helping them to leave welfare for employment. As discussed in Chapter 4, most programs resulted in higher earnings, implying that they achieved this goal as well.
Single mothers must obtain adequate resources to be truly self-sufficient, however. Therefore, a more comprehensive measure of self-sufficiency is income. In the context of an experimental evaluation, a program successful at improving self-sufficiency would reduce welfare use but leave program group members with more income than they would have had in the absence of the program.
It should also be recognized that focusing solely on how programs affected sample members' income might lead to inaccurate conclusions about whether sample members benefited from enrolling in a welfare-to-work program. As will be explored at the end of the chapter, income from a spouse, partner, or other friends and family members may have contributed significantly toward the well-being of sample members and their children.
Welfare-to-work programs can directly increase self-sufficiency by increasing employment and decreasing welfare receipt. They may also increase people's income by helping them qualify for or find relatively well-paying jobs with benefits. The amount of effort that program staff devote to helping recipients who enter employment apply for the EITC, maintain eligibility for Food Stamps, and obtain medical coverage and child care assistance may also help participants maintain or increase their income (or forgo costly expenditures for medical care and other necessities). Programs may not increase income, however, if they encourage people to take jobs that pay less than welfare, impose financial sanctions on those who have difficulty in finding work, or induce them to leave welfare without employment.
Welfare-to-work programs can also indirectly affect self-sufficiency and income by changing welfare recipients' social and family networks once they begin working. For example, welfare recipients who work for pay may be more likely to find spouses or partners who work, or may find job leads for other members of their household, thereby increasing the household's income and economic security. Increases in employment and income may also improve people's ability to purchase goods (like cars and clothing) and services (like reliable day care and health care) that support job retention and advancement and may help them obtain credit or save for the future. Alternatively, welfare-to-work programs that increase unstable employment or encourage recipients to leave welfare without employment may lead to immediate hardship and decrease people's ability to maintain the social and material supports needed to find employment in the future. Later chapters in this report discuss the effects of the programs on marriage, household composition, and material hardship.
This chapter estimates effects on income and self-sufficiency using administrative records and data from the Five-Year Client Survey. As discussed in Chapter 2, each of these data sources has its advantages and limitations. Measures of employment and welfare status and income are calculated from statewide unemployment insurance (UI) earnings records and welfare and Food Stamp payment records for all sample members. Estimates based on these administrative records are useful because they include everyone, cover the entire follow-up period, and likely include the primary sources of income received by most sample members.(2) However, these estimates leave out other potentially important sources of income, including earnings not reported to the UI system, child support, other types of transfer payments, income from other household members (from earnings, public assistance, or other sources), or income from family and friends who live outside the household. Therefore, on the basis of administrative records alone some sample members may be incorrectly classified as not employed or as having no income. The Five-Year Client Survey includes these other sources of earnings and income, but for a much smaller group of sample members and for only one month at the end of year 5. Further, like all survey-based data, reported earnings and income are subject to recall error, nonreporting, and exaggeration.
Finally, it should be kept in mind that this analysis does not consider program effects on work-related expenses (such as out-of-pocket expenses for child care and transportation), which decrease the income of sample members and their households.(3)
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The upper panel of Table 6.1 shows average income over five years for program and control group members in each program, as well as the impact of each program, measured as usual as the difference between the program and control groups. For this analysis, sample members' income is the sum of their earnings, welfare payments, Food Stamps, and estimated Earned Income Tax Credits (EITCs) less estimated payroll taxes.(4)
Site and Program |
Sample Size | Program Group | Control Group | Difference (Impact) | Percentage Change (%) |
|---|---|---|---|---|---|
Average combined income in years 1 to 5 ($) |
|||||
| Atlanta Labor Force Attachment | 2,938 | 41,138 | 39,987 | 1,152 | 2.9 |
| Atlanta Human Capital Development | 2,992 | 41,120 | 39,987 | 1,133 | 2.8 |
| Grand Rapids Labor Force Attachment | 3,012 | 40,739 | 42,172 | -1,433* | -3.4 |
| Grand Rapids Human Capital Development | 2,997 | 40,925 | 42,172 | -1,247 | -3.0 |
| Riverside Labor Force Attachment | 6,726 | 38,929 | 39,804 | -875 | -2.2 |
| Lacked high school diploma or basic skills | 3,125 | 37,030 | 38,311 | -1,280 | -3.3 |
| Riverside Human Capital Development | 3,135 | 35,924 | 38,311 | -2,387*** | -6.2 |
| Columbus Integrated | 4,672 | 44,037 | 44,478 | -441 | -1.0 |
| Columbus Traditional | 4,729 | 44,232 | 44,478 | -246 | -0.6 |
| Detroit | 4,459 | 48,256 | 47,685 | 571 | 1.2 |
| Oklahoma City | 8,677 | n/a | n/a | n/a | n/a |
| Portland | 4,028 | 43,677 | 41,807 | 1,870 | 4.5 |
Earnings as a percentage of combined income (%) |
|||||
| Atlanta Labor Force Attachment | 2,938 | 36.0 | 32.4 | 3.5 *** | 10.9 |
| Atlanta Human Capital Development | 2,992 | 35.4 | 32.4 | 3.0 *** | 9.1 |
| Grand Rapids Labor Force Attachment | 3,012 | 43.7 | 39.8 | 3.9 *** | 9.9 |
| Grand Rapids Human Capital Development | 2,997 | 42.0 | 39.8 | 2.3 ** | 5.7 |
| Riverside Labor Force Attachment | 6,726 | 34.1 | 28.6 | 5.5 *** | 19.1 |
| Lacked high school diploma or basic skills | 3,125 | 28.5 | 22.8 | 5.7 *** | 25.0 |
| Riverside Human Capital Development | 3,135 | 26.3 | 22.8 | 3.5 *** | 15.2 |
| Columbus Integrated | 4,672 | 48.6 | 44.3 | 4.3 *** | 9.8 |
| Columbus Traditional | 4,729 | 46.9 | 44.3 | 2.6 *** | 5.8 |
| Detroit | 4,459 | 35.8 | 33.1 | 2.7 *** | 8.0 |
| Oklahoma City | 8,677 | n/a | n/a | n/a | n/a |
| Portland | 4,028 | 45.5 | 38.7 | 6.8 *** | 17.7 |
| SOURCE: MDRC calculations from state and
county administrative records. NOTES: See Appendix A.1. |
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Over five years, control group members in five sites received between $40,000 and $45,000 in combined income, or about $8,000 to $9,000 per year. Control group members in Detroit received a slightly larger amount: $9,500 per year (Table 6.1, upper panel).(5) Control group members differed in the proportion of their combined income that was made up by earnings: about 30 percent of combined income in Atlanta, Detroit, and Riverside over five years, compared with about 40 percent in Columbus, Grand Rapids, and Portland (Table 6.1, lower panel).
Programs in the NEWWS Evaluation generally did not increase sample members' income relative to the control group. More often, they helped program group members substitute earnings and EITC for welfare and Food Stamps but left them with about the same level of income as control group members. This finding applies to LFA and HCD programs and, more generally, to employment- and education-focused programs.
There were some differences in program effects on combined income, but impacts varied by site rather than program approach. In Atlanta LFA and HCD and Portland, program group members received from 2.8 to 4.5 percent more in combined income than control group members, although these program-control group differences were just above the 0.10 level of statistical significance.(6) (See Table 6.1.) In contrast, both programs in Grand Rapids and Riverside reduced combined income over five years by 2.2 to 6.2 percent below control group levels.(7) The programs in Columbus and Detroit affected income very little.
The general inability of welfare-to-work services and mandates to increase income is not specific to programs studied in the NEWWS Evaluation. Results from San Diego's Saturation Work Initiative Model (SWIM), California's Greater Avenues for Independence (GAIN) program, Los Angeles County's Jobs First GAIN program, and Florida's Project Independence were similar: even when programs increased earnings, they seldom increased income very much.(8)
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Figure 6.1 and Appendix Table E.1 display the combined income of program and control group members during each year of follow-up. Year-by-year trends in income varied considerably by site. In Grand Rapids, Detroit, and Atlanta, control group members' average combined income increased by about $900 to nearly $1,800 between years 1 and 5. In contrast, control group members' combined income decreased during these years in Portland and Riverside by about $700 and $1,050, respectively. Control group members in Columbus received about the same amount of income during years 1 and 5. Trends for program group members were similar.(9)
Figure 6.1
Impacts on Combined Income in Years 1 to 5
SOURCE: MDRC calculations from state and county
administrative records.
NOTES: See Appendix A.1.
Programs may have affected income in particular years, but these impacts can be obscured when impacts are calculated for the entire five-year follow-up. For example, it would be important to know whether programs increased income during the first three years of follow-up when no control group members had access to program services. Likewise, increases or decreases in income during year 5 would suggest future trends.(10)
According to Figure 6.1 and Appendix Table E.1, program impacts on combined income were concentrated during certain follow-up years. For example, during the first three years after random assignment, the Atlanta LFA program led to significantly greater income on average for program group members than for control group members. Similarly, the Atlanta HCD program achieved statistically significant increases in combined income in years 2 to 4. However, neither Atlanta program significantly increased income in year 5 of the follow-up period. Portland also increased program group members' income above control group levels in years 2 to 5 — by $400 to $600 per program group member.(11) These three programs were not the norm, however. Grand Rapids LFA and HCD were more typical. The reductions in income stemming from the two Grand Rapids programs were spread out over the entire five-year period, even though the differences were statistically significant only in years 1 and 2 for Grand Rapids LFA and years 1 and 4 for Grand Rapids HCD.
Perhaps the most troubling results were in the Riverside HCD program, which left program group members with significantly less income than control group members in each year of the follow-up period. Reductions in income were especially large in years 2 to 4, when the average program group member had between $460 and $560 less in combined income than the average control group member.
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Figure 6.2 shows program effects on combined income over five years for high school graduates and nongraduates. It appears that income was more adversely affected for high school nongraduates. Of the nine programs for which results can be compared for the two groups, six either increased income more for high school graduates than nongraduates or reduced income less for graduates than for nongraduates. The differences are most striking in Atlanta, where the average high school graduate program group members had about $1,500 to $2,000 more income than comparable control group members, but average nongraduate program group members had about the same income as comparable control group members. The main exception was Portland, which increased combined income for nongraduates by nearly $2,700 (or 7 percent) above the control group mean, but led to a much smaller gain for graduates. However, the program-control group difference for nongraduates was not statistically significant (p-value = .18).
Figure 6.2
Impacts on Combined Income in Years 1 to 5, by Hign School Diploma or GED
Status
SOURCE: MDRC calculations from state and county
administrative records.
NOTES: See Appendix A.1.
There is not much indication that program approach produced important differences in income gains or losses. Both Atlanta programs had virtually no effect on income for high school nongraduates, and both had much larger effects for high school graduates. Likewise, both Grand Rapids programs resulted in lower combined income for program group members than control group members in each subgroup. On the other hand, the income losses from the Grand Rapids LFA program were more concentrated among high school graduates, whereas the income losses from the Grand Rapids HCD program were more concentrated among high school nongraduates.
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Income is perhaps the most comprehensive measure of economic well-being, but welfare-to-work programs can also help welfare recipients attain greater self-sufficiency by helping them find jobs and leave public assistance. Table 6.2 shows the degree to which the NEWWS programs succeeded in this regard by showing outcomes and impacts for four composite measures: (1) the proportion of people who were working and not receiving welfare, (2) the proportion who combined work and welfare, (3) the proportion who were on welfare and not working, and (4) the proportion who were neither working nor receiving welfare.(12) The table reports the percentage of the five-year (or 20-quarter) follow-up that people spent on average in each employment-welfare status.
Most programs led to small increases (of less than 5 percentage points) in the likelihood that people would work without receiving welfare (Table 6.2, first panel). The Portland program produced the largest impact, an increase of 7.3 percentage points above the control group level. Except in Riverside, programs did not affect the likelihood that sample members would combine work and welfare (Table 6.2, second panel). The increase for the Riverside programs probably reflects their overall gains in employment and the relatively high grant levels and generous earnings disregards in California.(13)
Site and Program |
Sample Size | Program Group (%) | Control Group (%) | Difference (Impact) | Percentage Change (%) |
|---|---|---|---|---|---|
Employed and not on welfare |
|||||
| Atlanta Labor Force Attachment | 2,938 | 24.2 | 21.4 | 2.8 *** | 13.1 |
| Atlanta Human Capital Development | 2,992 | 23.8 | 21.4 | 2.4 ** | 11.2 |
| Grand Rapids Labor Force Attachment | 3,012 | 29.4 | 27.1 | 2.3 ** | 8.6 |
| Grand Rapids Human Capital Development | 2,997 | 28.6 | 27.1 | 1.5 | 5.4 |
| Riverside Labor Force Attachment | 6,726 | 19.5 | 17.3 | 2.2 *** | 12.9 |
| Lacked high school diploma or basic skills | 3,125 | 15.8 | 13.8 | 2.1 *** | 15.2 |
| Riverside Human Capital Development | 3,135 | 14.8 | 13.8 | 1.1 | 7.8 |
| Columbus Integrated | 4,672 | 35.1 | 30.3 | 4.8 *** | 15.8 |
| Columbus Traditional | 4,729 | 33.2 | 30.3 | 2.9 *** | 9.4 |
| Detroit | 4,459 | 21.6 | 19.7 | 1.9 *** | 9.5 |
| Oklahoma City | 8,677 | n/a | n/a | n/a | n/a |
| Portland | 4,028 | 35.1 | 27.8 | 7.3 *** | 26.4 |
Employed and on welfare |
|||||
| Atlanta Labor Force Attachment | 2,938 | 18.5 | 17.5 | 1.0 | 5.5 |
| Atlanta Human Capital Development | 2,992 | 17.8 | 17.5 | 0.3 | 1.7 |
| Grand Rapids Labor Force Attachment | 3,012 | 19.7 | 18.4 | 1.3 ** | 7.1 |
| Grand Rapids Human Capital Development | 2,997 | 18.7 | 18.4 | 0.3 | 1.6 |
| Riverside Labor Force Attachment | 6,726 | 14.3 | 10.8 | 3.5 *** | 32.2 |
| Lacked high school diploma or basic skills | 3,125 | 14.0 | 9.7 | 4.2 *** | 43.5 |
| Riverside Human Capital Development | 3,135 | 12.6 | 9.7 | 2.8 *** | 29.0 |
| Columbus Integrated | 4,672 | 16.1 | 18.7 | -2.7 *** | -14.2 |
| Columbus Traditional | 4,729 | 17.4 | 18.7 | -1.3 *** | -7.2 |
| Detroit | 4,459 | 19.8 | 20.5 | -0.7 | -3.2 |
| Oklahoma City | 8,677 | n/a | n/a | n/a *** | n/a |
| Portland | 4,028 | 12.1 | 11.2 | 0.9 | 7.9 |
Not employed and on welfare |
|||||
| Atlanta Labor Force Attachment | 2,938 | 42.0 | 47.4 | -5.4 *** | -11.4 |
| Atlanta Human Capital Development | 2,992 | 44.1 | 47.4 | -3.3 *** | -6.9 |
| Grand Rapids Labor Force Attachment | 3,012 | 29.4 | 37.2 | -7.8 *** | -21.0 |
| Grand Rapids Human Capital Development | 2,997 | 32.4 | 37.2 | -4.8 *** | -12.9 |
| Riverside Labor Force Attachment | 6,726 | 35.0 | 43.7 | -8.6 *** | -19.8 |
| Lacked high school diploma or basic skills | 3,125 | 39.3 | 48.5 | -9.3 *** | -19.1 |
| Riverside Human Capital Development | 3,135 | 40.4 | 48.5 | -8.1 *** | -16.7 |
| Columbus Integrated | 4,672 | 26.4 | 29.7 | -3.3 *** | -11.1 |
| Columbus Traditional | 4,729 | 27.3 | 29.7 | -2.4 *** | -8.2 |
| Detroit | 4,459 | 43.4 | 45.5 | -2.1 ** | -4.5 |
| Oklahoma City | n/a | n/a | n/a | n/a *** | n/a |
| Portland | 4,028 | 24.9 | 34.8 | -9.9 *** | -28.4 |
Not employed and not on welfare |
|||||
| Atlanta Labor Force Attachment | 2,938 | 15.4 | 13.7 | 1.6 * | 12.0 |
| Atlanta Human Capital Development | 2,992 | 14.3 | 13.7 | 0.6 | 4.3 |
| Grand Rapids Labor Force Attachment | 3,012 | 21.5 | 17.3 | 4.2 *** | 24.2 |
| Grand Rapids Human Capital Development | 2,997 | 20.3 | 17.3 | 3.0 *** | 17.5 |
| Riverside Labor Force Attachment | 6,726 | 31.2 | 28.2 | 2.9 *** | 10.4 |
| Lacked high school diploma or basic skills | 3,125 | 30.9 | 28.0 | 2.9 *** | 10.5 |
| Riverside Human Capital Development | 3,135 | 32.2 | 28.0 | 4.2 *** | 15.0 |
| Columbus Integrated | 4,672 | 22.4 | 21.2 | 1.1 | 5.4 |
| Columbus Traditional | 4,729 | 22.1 | 21.2 | 0.9 | 4.2 |
| Detroit | 4,459 | 15.2 | 14.4 | 0.8 | 5.9 |
| Oklahoma City | n/a | n/a | n/a | n/a *** | n/a |
| Portland | 4,028 | 27.9 | 26.3 | 1.6 | 6.3 |
| SOURCE: MDRC calculations from state and
county administrative records. NOTES: See Appendix A.1. |
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The largest change for most programs was in the likelihood that people would rely on welfare without working (Table 6.2, third panel). In general, employment-focused programs produced the largest reductions in the proportion of follow-up quarters not employed and on welfare. The Portland employment-focused program produced the largest impact among all programs — 9.9 percentage points below the control group level. The three LFA programs led to reductions in this status of between 5.4 percentage points (Atlanta) and 8.6 percentage points (Riverside). Among education-focused programs, only Riverside HCD led to a comparable reduction. All other education-focused programs (including Atlanta and Grand Rapids HCD) decreased the proportion of follow-up quarters not employed and on welfare by less than 5 percentage points.
Finally, five programs (the three LFA programs and Grand Rapids and Riverside HCD) led to small but statistically significant increases in the proportion of follow-up quarters not employed and not on welfare. These programs probably encouraged some people to leave welfare for reasons other than employment. Notably, the LFA and HCD programs in Grand Rapids and Riverside also led to the largest reductions in combined income.
The proportion of follow-up quarters that program group members spent neither working nor receiving welfare (Table 6.1, fourth panel) ranged from about 15 percent in Atlanta and Detroit to more than 30 percent in Riverside. These program group members may have experienced severe financial hardship during the follow-up period. However, it is important to keep in mind the measure includes only income from earnings and welfare. It does not include income from Food Stamps(14) or other forms of public assistance, income of other household members, or earnings from jobs that were out of state or not reported to the state's UI earnings system.(15)
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So far, the chapter has made informal comparisons of the effects of employment- and education-focused programs on measures of income and self-sufficiency. This section summarizes the results of a more precise test of the relative effects of the LFA and HCD programs in Atlanta, Grand Rapids, and Riverside on combined income over five years. (See Table 6.3.) Not surprisingly, there was no statistically significant LFA-HCD difference in combined income for the full samples in Atlanta and Grand Rapids. As noted above, both programs in each site led to similar effects on income: an increase for Atlanta LFA and HCD relative to the control group and a reduction for Grand Rapids LFA and HCD (Table 6.1).
Site and Program |
Sample Size | LFA ($) | HCD ($) | Difference (Impact) | p-value |
|---|---|---|---|---|---|
Full impact sample |
|||||
| Atlanta | 2,936 | 41,138 | 41,120 | 19 | 0.98 |
| Grand Rapids | 3,099 | 40,739 | 40,925 | -186 | 0.81 |
| Riverside | 4,980 | 38,929 | n/a | n/a | n/a |
No high school diploma or GED |
|||||
| Atlanta | 1,190 | 37,490 | 36,890 | 599 | 0.52 |
| Grand Rapids | 1,268 | 37,015 | 35,835 | 1,180 | 0.23 |
| Riverside | 3,182 | 37,030 | 35,924 | 1,106 | 0.17 |
High school diploma or GED |
|||||
| Atlanta | 1,742 | 43,596 | 43,994 | -397 | 0.70 |
| Grand Rapids | 1,827 | 43,249 | 44,489 | -1,240 | 0.26 |
| Riverside | 1,798 | 41,433 | n/a | n/a | n/a |
| SOURCE: MDRC calculations from state and
county administrative records. NOTES: See Appendix A.1. |
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The small overall difference in income generated by the two approaches masks larger differences for educational attainment subgroups. For high school nongraduates, the LFA program group had higher income than the HCD program group in each site. Although the difference was not statistically significant in any one site, a simple average of the impacts across the three sites indicates that the three LFA programs as a group resulted in nearly $1,000 more income over five years than the HCD programs. Moreover, this LFA-HCD difference for high school nongraduates was statistically significant. These results, along with the LFA programs' larger effects on employment and earnings, suggest that job search was a better approach for helping welfare recipients with low educational attainment than the type of mandatory adult basic education services provided by the HCD programs. It should be recalled, however, that both the LFA and HCD programs in Grand Rapids and Riverside decreased the income of nongraduates relative to the control group.
Among high school graduates and GED recipients, on the other hand, HCDs in Atlanta and Grand Rapids received more income over five years than LFAs. In neither site, however, was the difference statistically significant; the same result occurred when LFA and HCD impacts were averaged across the two sites.
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Survey respondents were asked whether they had received income from earnings, welfare, Food Stamps, child support payments, Supplemental Security Income (SSI) payments, Social Security benefits, or "other income" at the end of year 5. (See Appendix Table E.4, middle panels.) The last four types of income were not recorded from administrative records and not included in the measures of combined income presented above. Under some circumstances, programs may affect levels of receipt of child support payments. For instance, program group members were likely to have had more contact with the welfare department than control group members and may have received more help in seeking a child support order. Similarly, programs may have increased SSI receipt if program group members with disabilities had greater contact with the welfare department than control group members.(16)
It turns out, however, that programs had only small and scattered effects on receipt of these income sources at the end of year 5. Only Atlanta HCD increased receipt of child support payments — by 4.2 percentage points above the control group level of 13.7 percent. Two other programs, Grand Rapids HCD and Riverside LFA, produced a similar increase in SSI receipt. Finally, Riverside HCD reduced "other income" by 4.5 percentage points.
As noted above, it is important to consider whether other household members received income from work or other sources and may have contributed toward the purchase of food, clothing, shelter, and other necessities for respondents and their children and helped respondents to experience a higher standard of living than they could have attained from their income alone.(17) Higher household income may also be associated with favorable outcomes for children, an issue explored in Chapters 11 and 12.
Respondents to the Five-Year Client Survey reported whether other members of their household received income from employment, welfare, Food Stamps, child support, SSI, social security, or other sources at the end of year 5. (See Appendix Table E.4, lower panels.) About 55 percent of control group respondents in Grand Rapids, Portland, and Riverside and about 40 percent in Atlanta reported living with someone who received income from one or more of these sources. Most programs did not affect the likelihood of living with others who received income, although the decrease for Riverside LFA (of 4.2 percentage points) was just above the 10 percent level of statistical significance.(18)
A large majority of control group respondents reported that they were living in a household in which at least one person worked for pay: from 65.5 percent in Atlanta to 80.3 percent in Grand Rapids (Appendix Table E.4, upper panels). Furthermore, a fairly large proportion of control group members — 42 to 43 percent in Grand Rapids, Portland, and Riverside and 28 percent in Atlanta — lived with at least one person who was working for pay (Appendix Table E.4, lower panels). Fewer than half of these respondents (or from 10 to 19 percent of all control group members) reported that they were jobless but other household members were working for pay (Appendix Table E.5, lower panels).
Programs did not affect the likelihood of living with another person who was the sole wage-earner in the household or living in a household in which the respondent and another household member were working for pay. Similarly, programs had no impact on the proportion of sample members who lived in a household in which monthly earnings for other household members totaled $1,000 or more (results not shown).
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1. Morris et al., 2001; Bos et al., 1999; Knox, Miller, and Gennetian, 2000.
2. See, for example, Appendix Table E.4, which displays income receipt at the end of year 5, based on survey data. A relatively small percentage of respondents reported receipt of income from sources other than earnings, welfare, and Food Stamps. The main exceptions are child support payments in Grand Rapids and Portland.
3. See Chapter 10 for a discussion of out-of-pocket expenses for child care.
4. It was beyond the scope of this evaluation to measure the EITC and payroll taxes directly. Instead, these outcomes were estimated on the basis of sample members' measured earnings, rules for calculating the EITC and taxes, and assumptions about the percentage of sample members who applied for the EITC on their federal income tax return. For each sample member, EITC calculations for years 1 to 5 use the tax rules for the calendar years in which the quarters 4, 8, 12, 16, and 20 occurred. Tax years range from 1992 through 1996 to 1995 through 1999, depending on when sample members were randomly assigned. Calculations assume an 80 percent take-up rate (see Scholz, 1996). Specifically, sample members' EITCs were estimated for each year of follow-up and then multiplied by 0.8. Estimated payroll taxes were calculated by multiplying earnings by 7.65 percent, the tax rate during most of the follow-up period.
5. As noted above, it was assumed that 80 percent of sample members with earnings received EITCs. To test the effects of this assumption, sample, sample members' combined income was recalculated, assuming that 100 percent of sample members with earnings received thereceived the EITC. The higher rate made the impact estimates on combined income more positive by about $170 for Portland and $90 for90 for Riverside LFA. However, impact estimates for other programs changed verychanged very little. (Results not shown.)
6. P-values were 0.11 for Atlanta LFA and HCD and 0.15 for Portland.
7. The decreases for Grand Rapids LFA (-$1,433) and Riverside HCD (-$2,387) were statistically significant. The decreases for Grandfor Grand Rapids HCD (-$1,247, p-value = 0.11) and) and Riverside LFA (-$875, p, p-value = 0.16) were) were just above the 0.1 level of statistical significance.
8. See Riccio, Friedlander, and Freedman, 1994, for GAIN; Hamilton and Friedlander, 1989, for SWIM; Freedman et al., 2000b, for Jobs-First GAIN; and Kemple, Friedlander, and Fellerath, 1995, for Project Independence. See Bloom and Michalopoulos, 2001, for a synthesis of these and other studies.
9. Trends in average combined income for the program or control group may be misleading because they do not include other sources of income for sample members and their households. However, it is reasonable to assume that excluding these sources did not bias the cumulative or yearly estimates of impacts on combined income.
10. Appendix Table E.2 shows the cumulative effects of the programs on income from earnings and public assistance (that is, without estimated EITC payments and payroll taxes) over the first three years and for the last quarter of year 5.
11. For Portland, only the impact for year 4 was statistically significant, although p-values for years 2 (.139) and 3 (.102) were just above the .1 level of statistical significance. The increase in year 5 of $470 had a p-value of .245. Detroit's program also led to higher income during years 2 to 4, but the differences were small and not statistically significant.
12. Appendix Table E.3 shows similar results for the last quarter of year 5. Since the programs in general had small effects on employment during the last quarter of year 5, they also had relatively small effects on these outcomes. However, several, several of the programs continued to significantly reduce the proportion of people who were on welfare and not working. Notably, Portland, Portland increased the proportion of sample members who were working and not receiving welfare by 5.8 percentage points relative to the control group, by far the largest effect on this measure of self-sufficiency.
13. The other three employment-focused programsIn addition, Atlanta and Grand Rapids LFA both led to 1 percentage point gains in this measure. The fact that people were not able to leave welfare when they went to work implies that they earned fairly little, perhaps because they worked part time or earned close to the minimum wage. In addition, sample, sample members may have received welfare and earnings at different times during a quarter as they transitioned from welfare to work or from work back to welfare. MDRC did not investigate these issues.
14. Across all sites, program and control group members received income from Food Stamps only (no earnings or welfare payments) during 2 to 7 percent of follow-up quarters. Programs did not affect the likelihood of having income from Food Stamps only.
15. Appendix GH compares employment levels and impacts calculated with UI earnings and survey data. As discussed in Appendix G, survey respondents in Riverside and Portland reported considerably more employment than was recorded on UI earnings records. Furthermore, as will be discussed in greater detail below, according to responses to the Five-Year Client Survey, virtually all sample members had some type of income in the month prior to completing the survey. (See Appendix Table E.4.)
16. Some respondents also reported earnings that had not been recorded by the UI system. See Appendix H.
17. Some household members who received income may not have contributed financial support to sample members and their children. For instance, people receiving SSI or other types of assistance may have neededhave needed to use all of their income to meet their own needs.
18. A larger reduction for LFA nongraduates was statistically significant. The Portland program led to a program-control group difference of +6.0 percentage points that was not statistically significant (p-value = .21). The p-value for the Riverside LFA impact was .13.
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