Welfare Reform

The most effective welfare-to-work approaches combine job search assistance with education and training. Those that do have better employment and earnings outcomes than those that do not. Since welfare reform, the states have been focusing on helping people find employment rather than giving them monthly cash assistance. States now tend to expect clients to test the job market for a time before they give them other services, and the states largely reserve education and vocational training for people who need them to get or keep a job or to advance in their careers. The goals and operations of the welfare system have thus become increasingly similar to those of the nation's workforce development system. Although the two systems are still largely independent, they have begun to work together to meet the needs of clients of the Temporary Assistance for Needy Families (TANF) program. GAO found that most adults who left welfare were employed afterward, usually in low-paying jobs, and that many returned to welfare. The emerging welfare challenges are to help people who are hardest to employ get and keep jobs; enhance opportunities for low-wage workers to maintain employment and increase their earnings; and foster greater collaboration between the two systems in order to meet the needs of TANF clients, such as through one-stop career centers.

GAO noted that: (1) research conducted to date on the effectiveness of different welfare-to-work approaches--most of which pre-dated federal welfare reform--suggests that programs that combine approaches, including both job search assistance and some education and training, tended to have better outcomes in terms of employment and earnings than either approach alone; (2) consistent with these findings and the work focus of the Personal Responsibility and Work Opportunity Reconciliation Act, states have been revising their welfare programs to focus on moving people into employment rather than providing them monthly cash assistance; (3) to better support this new work focus, many states are changing how they do business; (4) clients are often expected to test the job market for a period of time before many other services are provided; (5) education and vocational training are largely reserved for those who need it to get or keep a job or to advance on a career ladder; (6) as welfare agencies nationwide have focused more on moving clients into jobs than on providing them cash assistance, the goals and operations of the welfare system have become increasingly similar to those of the nation's workforce development system; (7) the two systems have begun to work more closely together to meet the needs of Temporary Assistance for Needy Families (TANF) clients, although for the most part the systems are still largely independent; (8) GAO's review of seven state-sponsored studies and a recent nationwide study show that most of the adults who left welfare were employed at some time after leaving the rolls, usually in low-paying jobs, and that many have returned to the rolls; and (9) as welfare reform continues to evolve, attention should be paid to emerging challenges, such as: (a) developing ways in which the systems can help the hardest-to-employ get and keep a job; (b) enhancing opportunities for low-wage workers to maintain employment and increase their earnings; and (c) developing ways to foster greater collaboration between the workforce development and welfare systems, such as through one-stop career centers, to meet the employment needs of TANF clients.