Welfare Reform

Under welfare reform, adults who receive assistance under the Temporary Assistance for Needy Families (TANF) program for more than two years must participate in work or work-related activities. These activities fall into three categories: those that focus on finding a job, those that take place in a classroom, and those take place at the work site. This report addresses work-site activities. Many policymakers expect that as federal participation rises and as state welfare caseloads are increasingly comprised of the most difficult to employ--or if the economy falters--states will rely more heavily on work-site activities to meet federal work requirements or states' own welfare reform goals. To help Congress better understand work-site activities now in place and the role they may play as TANF evolves, this report reviews (1) the key characteristics of work-site activities that states and localities are using in their TANF programs, (2) the key challenges to implementing and administering work-site activities and some of the ways that states and localities have addressed these challenges, and (3) the effects that work-site activities have had on participants' ability to make the transition to unsubsidized employment and on their communities.

GAO noted that: (1) the work-site activities at the locations GAO visited have in common the assignment of TANF recipients to public or private sector employers to perform work in areas such as building maintenance, clerical work, unskilled health care, and food service; (2) however, these work-site activities differ in two key ways; (3) they play varying roles in their state's or locality's TANF program, with some TANF programs requiring almost all recipients who have not found a job after a fixed period of time to participate in work-site activities and others targeting work-site participation to individuals who face multiple barriers to work; (4) the work-site activities GAO reviewed range from those in which participants are expected to work in exchange for a welfare check to those in which participants: (a) receive paychecks subsidized by TANF funds or other funding sources from which payroll taxes, including Social Security, are deducted; and (b) qualify for the Earned Income Credit (EIC); (5) states and localities GAO visited have overcome multiple challenges in implementing and administering their work-site activities, including the challenge of recruiting employers and involving participants; (6) while states and localities GAO visited generally have outcome data on key aspects of their TANF programs, such as the number of TANF recipients who find unsubsidized employment or leave welfare, less is known about outcomes specifically for work-site activity participants, and information is not available on the effectiveness of work-site activities in promoting employment; (7) in cases where outcome data on employment and earnings for work-site participants are available, the data are not comparable among the different work-site activities; (8) while outcome data are valuable in helping to understand the extent to which work-site participants become employed, an evaluation using these data would be needed to determine a work-site activity's effectiveness; (9) program administrators, participants, and others suggest that work-site activities can help participants with no prior work experience develop a resume and at the same time provide community services; (10) however, some critics say that some work-site activities do not provide the necessary level or experience or skills to enable participants to make the transition to unsubsidized employment that leads to economic independence; and (11) some critics also say that work-site participants are brought in to replace regular salaried employees.

Recommendations

Our recommendations from this work are listed below with a Contact for more information. Status will change from "In process" to "Open," "Closed - implemented," or "Closed - not implemented" based on our follow up work.

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