Chapter 1: Introduction

This report summarizes the two-year findings from a large-scale, rigorous evaluation of the effectiveness of Jobs-First GAIN, Los Angeles County’s strongly employment-focused welfare-to-work program. Jobs-First GAIN emphasized job search assistance and imparted a strong pro-work message in an effort to move thousands of welfare recipients quickly into jobs and, as soon as feasible, off the welfare rolls. This message and emphasis place Jobs-First GAIN in the category of Work First programs, the approach followed by most current state and local welfare-to-work programs. The evaluation, conducted by the Manpower Demonstration Research Corporation (MDRC), has been jointly funded by the Los Angeles County Department of Public Social Services (DPSS), the U.S. Department of Health and Human Services, and the Ford Foundation.

DPSS began implementing Jobs-First GAIN in mid-1993 under provisions of the federal Family Support Act (FSA) of 1988. The program anticipated the philosophy and goals of the federal legislation of 1996 that replaced Aid to Families with Dependent Children (AFDC) and the FSA with block grants to the states called Temporary Assistance for Needy Families (TANF). Most of Jobs-First GAIN’s features were preserved under Los Angeles County’s TANF program, California Work Opportunity and Responsibility to Kids (CalWORKs). The similarities between the two programs make the findings of this evaluation especially useful to practitioners and researchers interested in the effects of Cal-WORKs.

The differences between Jobs-First GAIN and CalWORKs are also of interest. Like many other TANF-era programs, Los Angeles CalWORKs added to its predecessor’s program model time limits on welfare eligibility (although limited to adult recipients on the case), somewhat stronger financial incentives to work, extended transitional benefits, and post-employment services aimed at increasing job retention and advancement.1 The Jobs-First GAIN Evaluation thus investigates the effects of Cal-WORKs’ primary pre-employment strategy, but without features that administrators and policymakers in Los Angeles and in many other locales now advocate as important for helping former recipients stay employed and off public assistance. Jobs-First GAIN’s effects on employment, earnings, welfare dependency, and income will serve as a benchmark for gauging the effects of CalWORKs’ more comprehensive approach to promoting self-sufficiency.

Further, any success achieved by Los Angeles County in moving large numbers of welfare recipients into jobs and off assistance will have broad significance. Los Angeles operates the largest county welfare program in the nation, serving more recipients than all states except New York and, of course, California. Moreover, the nation’s welfare population has become increasingly concentrated in its largest cities. According to a recent study, in 1996 the typical U.S. city had a larger share of its state’s welfare population than of its state’s total population. The same study found that most large cities and urban counties “did not perform as well as their states in moving recipients off the welfare payrolls.”2 Thus, the future success of welfare reform will to a great extent depend on whether administrators and staff of large, urban welfare-to-work programs like Los Angeles County’s can design and implement innovative, effective approaches.

This is the third and final report on the evaluation. The first report, Changing to a Work First Strategy: Lessons from Los Angeles County’s GAIN Program for Welfare Recipients (1997), described how DPSS turned the Human Capital Development (HCD) model of its Greater Avenues for Independence (GAIN) program (primarily a basic-education model) into a Work First model. The second report, The Los Angeles Jobs-First GAIN Evaluation: First-Year Findings on Participation Patterns and Impacts (1999), began the study of whether these changes made a difference. It described patterns of participation in Jobs-First GAIN and presented estimates of the program’s effects on employment, earnings, and welfare receipt in the year following the date on which people enrolled in Jobs-First GAIN and attended a program orientation. The second report concluded that Jobs-First GAIN produced a substantial initial boost in employment and earnings relative to what welfare recipients would have achieved in the absence of the program and produced this effect for a wide range of welfare subgroups. Jobs-First GAIN also produced small reductions in welfare and Food Stamp receipt, but larger decreases in expenditures for public assistance.

The current report explores Jobs-First GAIN’s impacts on employment, earnings, and AFDC/TANF and Food Stamp receipt and payments over the second year of follow-up. The report also looks at a much wider array of program effects than did previous reports, including: (1) employment stability and wage growth, (2) income and self-sufficiency of welfare recipients and other household members, (3) medical coverage, (4) child care use, (5) household structure, and (6) child outcomes. Further, the report examines Jobs-First GAIN’s cost-effectiveness. It includes estimates of the additional, or net, costs of providing services to program enrollees — that is, over and above the cost of services for a similar group of welfare recipients who were not in the program. It then considers whether Jobs-First GAIN made welfare recipients better off financially and whether government agencies realized more in increased taxes and savings in welfare, Food Stamps, and Medi-Cal and administrative costs than they spent providing services to enrollees.

1. Summary of Los Angeles County’s Welfare Reform Efforts



From 1988 to 1993, DPSS ran the GAIN program, California’s welfare-to-work initiative under the FSA. The program closely followed statewide directives to provide basic education services to recipients who lacked a high school diploma or high school equivalency (General Educational Development, or GED) certificate, demonstrated low levels of literacy or poor math skills, or lacked English proficiency. GAIN staff assigned most welfare recipients who entered the program to classes in Adult Basic Education (ABE), GED preparation, or English as a Second Language (ESL; see Table 1.1). Lacking funds to serve all welfare recipients mandated to participate and required by FSA provisions to give priority to recipients at greatest risk of long-term welfare dependency, DPSS served almost exclusively adults who had received continuous assistance for three or more years. In its initial years of operation, GAIN served few recipients with children under age 6, despite the FSA mandate to enroll recipients with children as young as 3. Evidence from several sources — including an evaluation of the program by MDRC, agency reports on participation and job placement, and discussions with supervisors and staff — showed that GAIN’s basic education approach was not working: Despite being costly, the program helped relatively few people attain additional educational credentials or find employment. 3

In 1993 DPSS administrators began a total overhaul of the GAIN program. They resolved that a Work First approach — a program that offered job search assistance as its primary service and encouraged welfare recipients to start working as soon as possible — would help greater numbers of welfare recipients achieve self-sufficiency. In consultation with administrators of successful Work First programs, including the GAIN program in neighboring Riverside County, and working with administrators in the Los Angeles County Office of Education (COE), DPSS administrators fashioned an innovative, strongly employment-focused program, which they named Jobs-First GAIN.

Jobs-First GAIN combined program services and mandates that had worked in other settings and some that were relatively new (see Table 1.1). Its main features included: (1) an unusually intensive program orientation aimed at motivating new enrollees to find work quickly; (2) high-quality job clubs, the leaders of which taught job-finding skills and engaged participants in activities aimed at boosting their self-esteem and motivation to work; (3) job development activities to increase job opportunities and to match people with prospective employers; (4) a strong Work First message, communicated through written handouts and group presentations and in one-on-one meetings with program staff; (5) a warning, conveyed orally and in writing, that California would impose time limits on welfare eligibility for those who did not work; (6) a concerted effort to teach people that California’s relatively generous rules for calculating welfare grants would help them increase their income in the short term by combining work and welfare; and (7) a relatively tough, enforcement-oriented approach to encourage people to complete the program activities and find work quickly.

Jobs-First GAIN’s start-up phase began in July 1993, when DPSS contracted with COE to operate the program’s orientation meetings and job clubs, and was completed in 1995. A number of operational changes were required to implement a Work First program. These included: (1) developing a curriculum, hiring staff, and renting and equipping facilities to run orientations and job clubs throughout the country; (2) changing case management practices to increase assignments to job club and encourage job placements; and (3) crafting a consistent pro-work message to communicate to welfare recipients who enrolled in the program. Many of these changes took place within a year of the start-up. By early 1994, DPSS’s reports showed a significant increase in the number of participants in job club and an increase in job placements relative to the previous GAIN program. Other changes took longer to implement. For instance, in 1995 California stopped requiring county welfare-to-work programs to assign any welfare recipients to basic education, which allowed DPSS to assign a higher percentage of program enrollees to job club. It also took time for DPSS and COE to develop partnerships with area employers to help welfare recipients learn about and apply for available jobs.

Los Angeles Jobs-First GAIN Evaluation

Table 1.1

Selected Characteristics of Los Angeles GAIN, Jobs-First GAIN, and CalWORKs

Characteristic	Los Angeles GAIN	Jobs-First GAIN	CalWORKs
Time period	1988-1993 (transition to Jobs-First GAIN occurred 1993-1995).	1995-1998.	1998-present.
Targeted populations	Recipients on assistance for 3 or more years; priority given to those with the longest spells of continuous receipt. Long waiting list for services owing to limited funds.	Recipients on assistance for 3-5 years; some newly approved applicants, short-term recipients, and very long-term recipients. Waiting lists for services.	Most welfare recipients and recent applicants.
Exemption criterion for parents of young children	Youngest child must be under age 3.	Youngest child must be under age 3.	Youngest child must be under age 1.
Program orientation	Short introduction to program.	6-hour motivational session conveyed strong pro-work message.	6-hour motivational session conveys strong pro-work message.
Typical first post-orientation activity	ABE or ESL; some assigned to GED preparation.	Job club	Job club
Later activities	Vocational skills assessment, followed by vocational training or work experience.	Vocational skills assessment, followed by additional job club, vocational training, or work experience.	Vocational skills assessment, followed by additional jobclub, vocational training, or work experience.
Special services	None	None	Screening and special services for victims of domestic violence and for enrollees with mental health or substance abuse problems.
Other program features	Literacy and math tests administered during orientation to determine need for basic education.	Job development; strong message to begin work quickly, even at low-paying jobs; strong encouragement to combine work and welfare.	Time-intensive participation required (32 hours/week); job development; strong message to begin work quickly, even at low-paying jobs; strong encouragement to combine work and welfare.
Level of enforcement of mandatory participation requirements	High	High	High
Willingness to impose financial sanctions for noncompliance	Low	High	High
Post-employment services	None	None	Up to 1 year of post-employment services (case management, job retention, human capital development services).
Time limits on welfare eligibility	None	None; staff warned enrollees that time limits were coming to encourage enrollees to find work quickly.	Parents not employed after 18-24 months must perform community service; 5-year lifetime limit on cash assistance for adult portion of grant.
Financial incentives to work	Standard federal pre-TANF earnings disregards: first $120 and 1/3 of each additional dollar disregarded for first 4 months; $120 for next 8 months; $90 thereafter.	More generous earnings disregards than federal disregards: first $120 and 1/3 of each additional dollar disregarded for each month of employment. Remaining earnings subtracted from a standard of need set higher than maximum grant level. Recipients can "fill the gap" with additional earnings without losing welfare benefits.	Most generous earnings disregards of the three programs: first $225 and 50% of each additional dollar disregarded for each month of employment.
Transitional benefits for those who leave welfare due to employment	Subsidized child care and Medi-Cal coverage for up to 1 year.	Subsidized child care and Medi-Cal coverage for up to 1 year.	Subsidized child care for 2 years or until family's income exceeds 75% of state's median income; up to 2 years of Medi-Cal coverage.




Jobs-First GAIN was funded at higher levels than the previous GAIN program and emphasized short-term job search assistance that cost less per participant than basic education classes. These changes enabled DPSS to serve a larger proportion of the welfare population than previously, including parents of preschool-aged children, newly approved applicants for assistance, and short-term recipients. Nevertheless, funding limitations and ongoing FSA requirements to give priority to the most at-risk recipients prevented DPSS from bringing all eligible welfare recipients into the program.

Passage of the federal Personal Responsibility and Work Opportunity Reconciliation Act (PRWORA) in August 1996 required California and all other states to transform their welfare-to-work programs. PRWORA placed a five-year lifetime limit on the length of time most families can receive federally funded welfare. It also required states to place increasingly high percentages of welfare recipients in jobs and employment-related activities and to submit plans for requiring welfare recipients to work after receiving two years of assistance.

In August 1997, a year after the passage of PRWORA, Governor Pete Wilson signed into law Assembly Bill 1542, which replaced GAIN with CalWORKs, California’s TANF program. Cal-WORKs included limits on welfare eligibility for adults (but not for children); provision of one-time cash grants to applicants who forgo welfare; a requirement to be working full time at an unsubsidized job within 24 months of program entry for welfare recipients and 18 months for welfare applicants, or be placed in a community service job; more generous financial incentives to encourage full-time work; and extended child care benefits for recipients who leave welfare for employment. Importantly, CalWORKs dramatically increased funding for welfare-to-work services and mandated that counties serve all non-exempt recipients with children aged 1 or over by the end of 1998.4

California’s Department of Social Services, which oversees the state’s welfare programs, gave counties considerable latitude in operating CalWORKs. DPSS took the lead in developing Los Angeles County’s program, in consultation with a broad cross-section of public and private agency administrators, business leaders, welfare advocates, faith- and community-based organizations, welfare recipients, and other community members. DPSS kept Jobs-First GAIN’s mix of services, messages, and mandates as CalWORKs’ core pre-employment strategy. Beyond that, DPSS added special services for recipients with mental health or substance abuse problems and for victims of domestic violence and training for case managers to identify enrollees in need of these services. It also added post-employment services aimed at increasing job retention and advancement and promoting rapid return to work for people who leave employment. These post-employment services include extended access to case management services, help in obtaining transitional benefits and the Earned Income Tax Credit (EITC), opportunities to attend vocational training classes while working, and job search assistance for people who leave employment.

DPSS inaugurated Los Angeles CalWORKs on April 1, 1998. In many ways, the program represents a continuation of Jobs-First GAIN, but on a much larger scale. Statewide directives required DPSS to serve all nonexempt recipients by the end of 1998. Before CalWORKS, DPSS served around 45,000 recipients at any one time. In the ensuing months, DPSS referred around 150,000 recipients to CalWORKs and maintained an active caseload that reached 100,000 (see Table 1.2). DPSS hired new staff, expanded facilities, and opened new offices. Whether Los Angeles County’s economy can provide enough entry-level jobs to absorb the thousands of CalWORKs recipients who have entered the labor market is a key issue for the program. DPSS also faces the challenge of working with welfare populations who previously remained outside the program — in particular, recipients with very young children, whose child care needs are most acute.5

2. Key Features of Jobs-First GAIN



In response to the passage of PRWORA in 1996, most states and localities have implemented some kind of Work First approach, with the central focus on rapid employment. Los Angeles’s version — Jobs-First GAIN, which was put in place prior to the federal law — had a number of features that together represent serious investments in the program. As noted above, all of these features, which are described below, have continued under CalWORKs (see Table 1.1).

• Communicating a strong Work First message

Welfare administrators stated clearly that the goal of Jobs-First GAIN was to move people to employment as rapidly as possible. This philosophy was communicated to program enrollees through written handouts and group presentations and in individual meetings with program staff.

• Warning enrollees that time-limited welfare is coming and urging them to get a job right away to preserve their eligibility for assistance

Even before the federal welfare reform legislation was enacted in August 1996, Jobs-First GAIN staff were informing new enrollees that the federal and state governments would limit welfare eligibility, possibly to two years, and were encouraging them to find work in order to avoid the expected cuts in welfare. As one agency flier put it:

Everyone will be expected to work. These changes could occur as early as 1996. It is critical that you prepare now for these social changes. Work experience is the best training. Remember: “WORK IS IN, WELFARE IS OUT.”

The message was repeated during program activities, such as job club, and in meetings between enrollees and program staff.

Los Angeles Jobs-First GAIN Evaluation

Table 1.2

Characteristics of the Program Environment, Los Angeles County

Characteristic
Population, 1990 a		8,863,160
Population, 1996		9,369,800
Population, 1998		9,603,300
Population growth, 1990-98 (%)		8.4
AFDC/ TANF caseload b	July 1996	306,253
	July 1997	274,712
	July 1998	244,569
	July 1999	236,430
Jobs-First GAIN/CalWORKs caseload	July 1996	33,720
	July 1997	40,525
	July 1998	62,547
	July 1999	100,854
Total DPSS expenditures for Jobs-First GAIN/CalWORKs ($)	FY 95/96	58,809,460
	FY 96/97	63,300,738
	FY 97/98	63,267,072
	FY 98/99	164,122,049
AFDC/TANF grant level for a family of three ($) c	9/1/93 - 6/30/96	607
	7/1/96 - 1/31/97	594
	2/1/97 - 9/30/98	565
Food Stamp benefit level for a family of three ($) d	10/1/95 - 9/30/96	246
	10/1/96 - 9/30/97	251
	10/1/97 - 9/30/98	267
Minimum wage ($)	10/1/96	4.75
	3/1/97	5.00
	9/1/97	5.15
	3/1/98	5.75
Unemployment rate (%) e	1996	8.2
	1997	6.8
	1998	6.6
	1999	5.9
Employment growth (%)	1996-97	4.2
	1997-98	3.7
	1998-99	1.0
Employment growth, 1996-99 (%) f		9.2

SOURCES: Published reports from the U.S. Bureau of the Census; California Department of Social Services, Employment Development Department; and Los Angeles County Department of Public Social Services. NOTES: a Data are for Los Angeles County. (back) b AFDC/TANF caseload figures include single- and two-parent cases and refer to a monthly average. (back) c AFDC/TANF grant levels are based upon the maximum aid payment. (back) d Food Stamp allotments are based upon the AFDC/TANF maximum aid payment. (back) e Data for 1996, 1997, 1998, and 1999 are annual averages. (back) f Employment growth is calculated by: 100 x (number employed in 1999 minus number employed in 1996) / (number employed in 1996). Employment totals for both dates were seasonally adjusted. (back)

• Operating an unusually intensive program orientation

All new enrollees attended a six-hour group orientation session, followed by an individual appraisal meeting with a case manager during their first day in the program. In contrast, most other welfare-to-work programs, including some that share Los Angeles County’s Work First philosophy, run much shorter orientations. Further, whereas in these other programs staff use most of the orientation time to collect background information on new enrollees and to assign them to their first employment-related activity, Jobs-First GAIN staff devoted most of the orientation to changing recipients’ perceptions of Jobs-First GAIN, communicating the program’s message to them, and increasing their self-esteem — particularly with regard to their ability to find work. At the appraisal meetings, case managers conveyed their expectation that enrollees would be working soon. They also discussed the availability of transitional child care and medical insurance for participants who leave welfare for employment.

• Providing high-quality job search assistance

The vast majority of those who actively participated in Jobs-First GAIN attended job clubs. Well-trained staff from COE ran these services at 15 Job Centers around the county, and — along with Jobs-First GAIN staff — monitored participants’ progress. Jobs-First GAIN’s job clubs provided instruction in many of the skills needed to obtain employment, including finding job openings, writing a résumé and job application, and being interviewed. Job club participants then conducted up to two weeks of supervised job search using agency phone banks, job listings, and assistance from program staff. These features are typical of job clubs in many other welfare-to-work programs. Jobs-First GAIN’s job clubs, however, also featured a strong motivational component. The message and specially developed curriculum were upbeat, stressing how work can lift self-esteem and how a low-paying first job can lead to a better one in the future. In addition, Jobs-First GAIN staff aggressively developed relationships with local employers and matched enrollees to specific job openings. These job development efforts went well beyond what is traditionally offered in job search activities.

Jobs-First GAIN offered short-term basic education and vocational training classes as well, but assigned few enrollees to these activities. The program also made limited use of unpaid work experience jobs.

• Using job development activities to support enrollees’ job search efforts

Each Jobs-First GAIN office had job developers who cultivated relationships with local employers and compiled lists of job positions. Job developers then tried to match enrollees to available job openings, based on enrollees’ prior experience and interests. Job developers began working with enrollees during orientation and appraisal, and continued assisting their job search efforts during job club and other program components. Job developers also arranged and hosted job fairs for enrollees — small, weekly job fairs with one or two employers and larger, quarterly job fairs with many employers. One program office even experimented with having its job developers work on a one-on-one basis with program enrollees who had received a financial sanction (welfare grant reduction) for noncompliance with program requirements.

• Demonstrating that work pays

California’s Work Pays rules for calculating welfare grants allowed many recipients to combine work and welfare under the Jobs-First GAIN program. Using waivers granted by the U.S. Department of Health and Human Services, Work Pays increased, above national standards, the amount of earnings that the welfare department disregarded (that is, did not count) in calculating welfare grants. As specified by federal regulations, DPSS disregarded the first $120 of earnings plus one-third of the remainder. Normally, the remaining earnings would then be subtracted from the maximum grant amount available to the family, and the difference would be paid to the recipient as her welfare check. Under Work Pays, in contrast, the remaining earnings were subtracted from a higher standard of need. In effect, this method of calculating benefits, known as “fill-the-gap budgeting,” disregards additional earnings before reducing the grant. As a result, a welfare recipient with two children could, for example, have earned $375 in June 1997 (during the second year of the evaluation) and still have received her maximum grant amount of $565. Further, she could have earned up to $1,221 and still remained on assistance.6 Therefore, most welfare recipients who combined work and welfare could receive hundreds of dollars per month in income above what they would have received in welfare alone.

Work Pays became part of Jobs-First GAIN’s strategy for convincing people to find employment as quickly as possible, even if available jobs paid little. Jobs-First GAIN staff made a concerted effort to explain the financial benefits of Work Pays to new enrollees by walking them through several examples of grant calculations during motivational sessions at program orientation and repeating this message in job club and other employment-related activities.

• Running a relatively tough, enforcement-oriented program

Jobs-First GAIN case managers made frequent use of the program’s formal enforcement procedures, including threats to reduce welfare grants, to encourage enrollees to participate in program activities or show good cause why they could not. As discussed later in this report, the vast majority of program enrollees received at least one warning that they were out of compliance with program rules. Nearly one in three AFDC-FGs and a quarter of AFDC-Us incurred a sanction (grant reduction) for noncompliance. A sanction entailed dropping the recipient (but not the recipient’s children) from the grant; the dollar value of a sanction thus varied with grant level and family size. Program administrators intended this high-enforcement case management approach and the strong pro-employment message to complement the program’s high-quality, motivational job clubs. Together, these components of Jobs-First GAIN’s approach encouraged enrollees to find work quickly and discouraged them from spending a long time in the program.

3. New Program Features of CalWORKs7



Some of the features of CalWORKs described below came into being in April 1998, when the program started, whereas others took several additional months or longer to start up.

• Time limits on welfare eligibility

Welfare recipients in California, as elsewhere, are subject to TANF’s five-year lifetime limit on eligibility for federally funded benefits. CalWORKs modifies this restriction by applying it only to parents or guardians who receive welfare benefits for five years. The program drops these adult family members from the case, but commits state and county funds to provide ongoing support for children and other dependents. In effect, this policy reduces, but does not eliminate, welfare benefits for families who reach the five-year time limit.

CalWORKs also imposes an interim time limit for recipients who complete their initial pre-employment activity (usually job club) without finding employment. Most people in this situation undergo a formal assessment of their occupational skills, career interests, and barriers to employment. Cal-WORKs staff then meet with recipients to review the results of their assessment and to develop an individualized welfare-to-work plan, which outlines a strategy for overcoming barriers to employment and specifies the next employment-related activity the recipient will attend. Once her welfare-to-work plan is completed, a welfare recipient may receive cash assistance for up to 24 additional months, or up to 18 months if she began receiving welfare after April 1998, the start of CalWORKs. Thereafter, she must be working in an unsubsidized job or participating in community service for at least 32 hours per week to remain eligible for assistance.8

• Grant diversion

CalWORKs offers new and returning applicants for assistance who meet specific criteria a one-time payment (equivalent to up to three months of benefits) if they forgo welfare. Families are eligible for Medi-Cal (California’s Medicaid program) and child care assistance during grant diversion.

• Financial incentives

CalWORKs did not alter welfare grant levels initially, but changed the formula for calculating grants.9 Specifically, the program eliminated the practice of subtracting countable income from a higher standard of need. Instead, the first $225 of a recipient’s monthly earnings plus 50 percent of the remainder are disregarded, and the remainder is subtracted from the maximum grant amount. For example, the hypothetical welfare recipient with two children mentioned earlier could have earned up to $1,353 in June 1998 (that is, $132 more than a year previously) and still remain on welfare.10 Thus, the CalWORKs formula gives recipients a somewhat stronger incentive to increase work hours than the previous Work Pays formula in effect under Jobs-First GAIN. This aspect of CalWORKs began statewide in January 1998, three months before the launch of Los Angeles County’s CalWORKs program.

• Child care payments for welfare recipients

Under Jobs-First GAIN (and the GAIN program that preceded it), DPSS paid child care expenses for welfare recipients who participated in program activities. This practice continued under CalWORKs. However, CalWORKs changed the method of paying for child care used by recipients who worked for pay but still remained on welfare. Before CalWORKs, those who were employed paid for child care out of pocket and then submitted their expenses to DPSS along with their pay stubs. When determining a welfare recipient’s monthly welfare grant, DPSS disregarded up to $175 per month in child care expenses for each child aged 2 or over (and up to $200 per month per younger child). Employed recipients whose child care costs exceeded the maximum allowable amount could apply for reimbursement under a separate Supplemental Child Care program. Under CalWORKs, DPSS pays child care providers directly, and welfare recipients no longer have to pay for care first and then wait for reimbursement.

• Transitional benefits

CalWORKs offers recipients who leave assistance for employment subsidized child care for two years or until the family’s income reaches 75 percent of the state median. Under Jobs-First GAIN and the previous GAIN program, transitional child care benefits were available for only one year after welfare exit. CalWORKs also extends medical coverage for up to two years (compared with one year under Jobs-First GAIN and Los Angeles GAIN) to people who leave welfare for employment.

• Post-employment services

CalWORKs enrollees who find employment are eligible for case management services from the program while still receiving welfare and for one year after ceasing to receive a grant. Program staff can provide new workers with counseling to help them adjust to demands of work and family, assistance in applying for the EITC and transitional benefits, job search assistance (if enrollees leave employment), and referrals to counseling and treatment for problems related to mental health, substance abuse, or domestic violence. DPSS also pays for enrollees to attend job skills training programs during working hours for up to one year, if approved by enrollees’ employer.

• Special services

DPSS devoted additional funding and special training to help CalWORKs staff identify enrollees with problems related to mental health, substance abuse, or domestic violence. These enrollees may be referred to special counseling or treatment services instead of job club and still receive credit for meeting CalWORKs’ work requirements. Under Jobs-First GAIN (and its predecessor), many of these enrol-lees were exempted from the program’s participation requirement without being referred to treatment or counseling.

4. An Overview of the Evaluation

The Jobs-First GAIN Evaluation began in January 1996 and ended in June 2000. The evaluation involves nearly 21,000 welfare recipients who appeared at a Jobs-First GAIN office to enroll in the program between April and September 1996.11 It includes single parents (AFDC-FGs, or Family Group cases) – the great majority of whom are women – and parents in two-parent households (AFDC-Us, or Unemployed Parent cases).12

1. The Research Design



Central to the evaluation is an experimental design in which people who showed up at a Jobs-First GAIN office to enroll in the program were assigned, at random, to the experimental group or, for comparison, the control group (see Figure 1.1); these two groups combined are referred to as sample members. Experimental group members were given access to Jobs-First GAIN’s program services, including the initial orientation session, and its Work First message. They were subject to the program’s mandatory participation requirements and could incur a sanction for noncompliance. Control group members did not attend the six-hour information and motivational meeting at orientation and were precluded from receiving other Jobs-First GAIN services, but remained eligible to receive AFDC/TANF payments. Control group members could seek other services in the community and receive child care assistance from DPSS for employment-related programs in which they enrolled on their own initiative. Control group members also received Work Pays financial incentives.

Results for control group members represent the outcomes that would be expected for welfare recipients in the absence of Jobs-First GAIN. Differences in outcomes between the experimental and control groups — referred to as experimental-control differences— represent the effects, or impacts, of Jobs-First GAIN. These impacts reflect the extra value associated with having access to Jobs-First GAIN services and exposure to its Work First message and mandatory participation requirements.

[D]

2. Follow-up Period for Measuring Program Effects



Jobs-First GAIN’s effects were measured over the two-year follow-up period after each sample member attended orientation and was randomly assigned to either the experimental or the control group. September 30, 1998, marked the end of the follow-up period for sample members who entered the program in September 1996, the final month of sample intake. Starting on October 1, 1998, DPSS began assigning to CalWORKs all experimental and control group members who met the program’s mandatory participation criteria.

3. Effects of CalWORKs’ Start-up



Although CalWORKs started during the second year of the evaluation’s follow-up period, sample members’ exposure to the program was limited. By agreement with DPSS, control group members remained precluded from services. Further, experimental group members were not subject to CalWORKs’ two-year limit on continuous eligibility for welfare until after the end of follow-up. In the final months of follow-up, experimental group members had access to CalWORKs’ special services and post-employment services. However, tabulations from DPSS’s automated program tracking system, the GAIN Employment Activity and Reporting System (GEARS), show that less than 1 percent of experimental group members made use of these services. Similarly, only a tiny proportion of employed experimental group members arranged for DPSS to pay child care providers directly. All sample members experienced the change in the grant calculation formula starting in January 1998.

5. The Research Sample and Program Environment



The full sample for the evaluation includes 20,731 AFDC-FG and AFDC-U welfare recipients who were randomly assigned to the experimental or control group between April 1 and September 11, 1996, when they appeared at a Jobs-First GAIN office for their scheduled program orientation (see Table 1.3). During the evaluation, DPSS followed the eligibility criteria written into the federal Family Support Act of 1988 (FSA) in determining which recipients were Jobs-First GAIN-mandatory. According to the FSA, any AFDC-FG parent whose youngest child was aged 3 or over and who did not meet exemption criteria was mandated to participate in a welfare-to-work program. Grounds for exemption included having a disabling illness, being employed full time (30 hours or more per week), living in a remote area that made program activities inaccessible, or being in at least the second trimester of pregnancy. These criteria also applied to members of AFDC-U cases, except that AFDC-U parents of children under 3 who did not meet any exemption criteria were required to enroll in Jobs-First GAIN. Further, DPSS required both parents on an AFDC-U case to enroll, an option given to states and localities under the FSA.13

Los Angeles Jobs-First GAIN Evaluation

Table 1.3
Overview of Sample Sizes, by Assistance Category, Enrollment Status, and Research Group

		Experimental Group	Control Group	Total
Full sample	AFDC-FGs	11,521	4,162	15,683
	Percent	73.5	26.5	100.0
	Regular enrollees	8,620	3,821	12,441
	Percent	69.3	30.7	100.0
	Early enrollees	2,901	341	3,242
	Percent	89.5	10.5	100.0
	AFDC-Usa	4,039	1,009	5,048
	Percent	80.0	20.0	100.0
	Total	15,560	5,171	20,731
Survey sample	AFDC-FGs	372	374	746
	Percent	49.9	50.1	100.0
	Regular enrollees	294	298	592
	Percent	49.7	50.3	100.0
	Early enrollees	78	76	154
	Percent	50.6	49.4	100.0
	Total	372	374	746

SOURCE: MDRC calculations using data from the GAIN Employment Activity and Reporting System (GEARS). NOTE: aRegular and early enrollees combined.(back) Early enrollees, unlike regular enrollees, volunteered for the program before their regular scheduled appointment.




Because DPSS did not have the resources to serve all welfare recipients mandated to participate, it implemented a targeting strategy. Prior to the start of the evaluation, the agency reserved nearly all places in Jobs-First GAIN for people identified by the FSA as being at the greatest risk of remaining on welfare for many years. Among members of this group, DPSS gave the highest priority to those who had received welfare continuously for at least three years.

Anticipating the start of the evaluation, DPSS decided to change its targeting strategy so that the evaluation could determine the effects of the Jobs-First GAIN approach on a broad cross section of the welfare caseload and on various types of welfare recipients. To do this, DPSS administrators implemented a complex selection and weighting procedure. The resulting sample, which included nearly everyone who showed up at a Jobs-First GAIN office for their scheduled orientation between April and early September 1996, was drawn from specific groups and, in very broad terms, appears to reflect the diversity of the mandatory caseload. The sample differed from the full Jobs-First GAIN-mandatory caseload primarily in including a substantially smaller percentage of people going through a very long spell — at least five years — on welfare and in excluding teen parents and a few other groups.

The sample includes 15,683 single parents (AFDC-FGs) and 5,048 parents in two-parent households (AFDC-Us). It includes welfare recipients who inhabit the inner-city neighborhoods of Los Angeles as well as recipients in the outlying suburbs. The sample is large and diverse with respect to race and ethnicity, age, family size, and several indicators of relative disadvantage in the labor market (see Table 1.4). Among AFDC-FG sample members, Hispanics formed the largest ethnic group (45 percent); about 31 percent were African-Americans; 17 percent were non-Hispanic whites; and 6 percent were Asians. Just over half of all the AFDC-FGs had at least one preschool-aged child (under 6), for whom child care would be needed. Nearly 20 percent of AFDC-U sample members were Asians (primarily Vietnamese and Cambodians), and about half of the AFDC-Us had limited English proficiency. Relative to the AFDC-FG group, the AFDC-U group included a larger percentage of non-Hispanic whites (many of them recent immigrants from Armenia) and a much smaller percentage of Afri-can-Americans. Further, the AFDC-U sample members had, on average, more children on their cases than did the AFDC-FG sample members (2.4 versus 2.0).

A large majority of AFDC-FG and AFDC-U sample members faced one or more serious barriers to employment at the time of random assignment: Fewer than half of each group had graduated from high school or received a GED certificate; about 60 percent had not worked for pay in the prior three years; and about 70 percent had received welfare cumulatively for at least two years. Other members of the research sample faced fewer barriers to employment: About 30 percent of both AFDC-FGs and AFDC-Us were newly approved applicants for assistance or had received assistance cumulatively for less than two years, and more than a quarter of each group had worked for pay in the year prior to random assignment.

6. The Program Environment
1. County Demographic Characteristics



With 9.6 million inhabitants spread over 4,000 square miles, Los Angeles County is the most populous in the nation; by itself, the city of Los Angeles has 3.7 million residents. The county is ethnically diverse: Approximately 42 percent of its inhabitants are Hispanics, while Asian-Americans and African-Americans represent about 12 percent and 10 percent, respectively.14 The vast majority of Hispanics in the county are of Mexican descent, with Salvadorans being the next largest group. Approximately 46 percent of county residents over the age of 5 speak a language other than English at home,15 with the largest number (32 percent) speaking Spanish; the languages next most commonly spoken at home are Chinese, Tagalog, Korean, Japanese, and Vietnamese. Many speakers of these languages live in predominantly minority communities, such as South-Central and East Los Angeles, whereas others are spread throughout the county.

Los Angeles Jobs-First GAIN Evaluation

Table 1.4
Demographic Characteristics of the Full Sample

Characteristic			AFDC-FGs			AFDC-Us
			All	Regular Enrollees	Early Enrollees
Random assignment quarter (%)		April-June 1996	56.1	54.6	61.7	56.2
		July-September 1996	43.9	45.4	38.3	43.8
Female (%)			92.8	92.3	94.9	47.4
Aid status a (%)	Applicant		3.6	3.5	3.9	2.8
	Short-term recipient		23.6	22.9	26.1	28.8
	Long-term recipient (received AFDC for at least 2 years)		72.8	73.6	70.0	68.4
		5 years or more but less than 10 years	15.6	16.2	13.3	14.0
		10 years or more	7.8	7.4	9.3	2.4
Less disadvantaged recipient b (%)			42.5	43.2	39.9	38.7
Most disadvantaged recipient c (%)			30.3	30.3	30.1	29.7
On AFDC as a child (%)	Yes		25.4	24.3	29.7	13.1
	No		74.3	75.4	70.1	86.8
	Don't know		0.3	0.3	0.2	0.1
Long-term, second-generation recipient (%)			17.1	16.3	19.9	6.5
Likely to receive an exemption d (%)			18.7	20.0	13.5	20.3
Previous employment (%)	Employed within past year		27.1	27.7	24.8	29.4
	Employed within past 2 years		34.6	35.1	32.9	36.6
	Employed within past 3 years		38.2	38.5	37.2	40.1
Current employment (%)	Not employed		90.5	89.5	94.3	86.3
	Employed		9.5	10.5	5.7	13.7
		Employed 1-14 hours per week	1.2	1.2	1.2	1.3
		Employed 15-29 hours per week	4.2	4.6	2.3	8.5
		Employed 30 or more hours per week	4.1	4.6	2.3	3.9
Highest degree/diploma earned (%)	GED		5.1	5.1	5.0	2.7
	High school diploma		35.7	36.6	32.3	30.9
	Technical/AA/2-year college degree		3.7	3.8	3.0	3.5
	4-year (or more) college degree		1.3	1.3	1.2	3.4
	None of the above		54.3	53.2	58.5	59.5
Has a high school diploma or GED (%)			45.7	46.8	41.6	40.5
Highest grade completed in school (%)	Less than 8th		13.8	13.6	14.7	27.4
	8th		2.9	2.8	3.3	4.0
	9th		6.1	5.9	7.0	6.2
	10th		9.8	9.7	10.3	10.9
	11th		19.2	18.8	20.7	10.6
	12th		36.6	37.3	34.0	30.4
	Post high school		11.2	11.6	9.7	9.7
	No formal schooling		0.4	0.4	0.3	0.8
Average highest grade completed in school			10.8	10.9	10.6	10.3
Currently in a school or training program (%)			13.5	13.0	15.6	7.7
Ethnicity (%)	White, non-Hispanic		17.3	18.7	12.1	28.1
	Hispanic		45.2	43.8	50.3	46.8
	African-American e		31.2	30.2	34.9	5.3
	Asian/Pacific Islander		6.1	7.0	2.6	19.6
	Native American/Alaskan native		0.3	0.3	0.2	0.1
Limited English proficiency (%)			20.3	19.5	23.0	51.7
Age (%)	Less than 25		17.1	16.1	20.8	10.7
	25-34		40.8	41.3	39.1	31.6
	35-44		31.5	31.8	30.4	40.7
	45 or older		10.6	10.8	9.7	17.0
	30 or older		63.1	63.8	60.0	76.4
	Average age (years)		33.2	33.4	32.5	36.2
Parent under 24, no high school diploma (%)			8.1	7.3	11.3	5.5
Marital status (%)	Never married		43.0	42.8	43.8	9.1
	Married, living with spouse		6.8	7.0	5.8	87.8
	Separated		34.3	34.0	35.6	2.5
	Divorced		14.1	14.3	13.1	0.6
	Widowed		1.8	1.9	1.7	0.0
Has at least one child in the following age groups (%)	Under 6		53.3	52.3	56.9	59.4
	6-11		54.7	55.2	52.8	57.0
	12-18		38.8	39.2	37.6	44.4
Age of youngest child (%)	Under 3		9.3	7.7	15.1	33.0
	3-5		44.0	44.6	41.8	26.5
	6 or older		46.7	47.7	43.1	40.6
Number of children (%)	None		0.0	0.0	0.0	0.0
	1		43.0	43.1	42.7	23.2
	2		30.1	29.8	31.2	36.9
	3 or more		26.9	27.1	26.1	39.9
Average number of children			2.0	2.0	2.0	2.4
Current housing status (%)	Public		5.5	5.5	5.5	3.6
	Subsidized		9.3	8.9	11.0	6.4
	Emergency		0.4	0.4	0.7	0.1
	Other		84.8	85.3	82.8	89.9
Research sample status (%)	Experimental		73.5	69.3	89.5	80.0
	Control		26.5	30.7	10.5	20.0
	Sample size		15,683	12,441	3,242	5,048

SOURCE: MDRC calculations using data from the GAIN Employment Activity and Reporting System (GEARS). NOTES: Sample members with missing data were excluded from the calculations of percentages and means. Early enrollees, unlike regular enrollees, volunteered for the program before their regular scheduled appointment. a "Applicants" include sample members who reported never having received AFDC on their own or a spouse’s case. "Short-term recipients" reported having received AFDC on their own or a spouse’s case for one month to less than two years at some time prior to random assignment. "Long-term recipients" reported having received AFDC on their own or a spouse’s case for two years or more at some time prior to random assignment. (back) b "Less disadvantaged" sample members are long-term recipients who had a high school diploma or GED certificate at random assignment and/or who worked for pay during the year prior to random assignment. (back) c "Most disadvantaged" sample members are long-term recipients who did not have a high school diploma or GED certificate at random assignment and who did not work for pay during the year prior to random assignment.(back) d During orientation, but prior to random assignment, Jobs-First GAIN case managers identified sample members whose circumstances made them likely to be exempted from participation in Jobs-First GAIN. Recommendations for actual exemptions were made during appraisal meetings that followed random assignment, but only for experimental group members. (back) e Los Angeles County does not distinguish between non-Hispanic and Hispanic African-Americans. (back)



2. Unemployment Rates and Poverty Levels



Los Angeles County’s unemployment rate grew steadily in the early 1990s, rising from 5.4 percent in April 1990 to a high of 10.8 percent in July 1992. As shown in Table 1.2, it then dipped to 8.2 percent during 1996, the first year of the evaluation. Since then, the rate has continued to drop, averaging 6.6 percent in 1998 and 5.9 percent in 1999; however, even in these years, unemployment in the county remained above the national average. Employment numbers have reflected this trend, growing by about 325,000 workers, or 8.1 percent, between 1996 and 1998.16 The county’s poverty rate decreased only slightly during these years, from 23.4 percent to 22.1 percent. Poverty rates varied greatly by race and ethnicity. In 1998, nearly one-third of Hispanics in Los Angeles County had incomes below the federal poverty threshold, compared to less than 10 percent of non-Hispanic whites. The poverty rate for African-Americans matched the county average (22 percent), and was lower for Asians (16 percent).17

To a greater extent than in most U.S. urban areas, poor people live throughout the county. There are pockets of poverty not only in the city of Los Angeles, but also in many of the outlying suburban communities. Moreover, although the county’s economy has significantly improved over the last several years overall, local community unemployment rates vary considerably. For example, communities like South-Central and East Los Angeles — where more than 90 percent of the residents are either African-American or Hispanic — still have unemployment rates of 9 percent or higher.18

3. AFDC/TANF Caseload and Grant Levels



The county’s AFDC/TANF caseload numbers have followed the trends in employment figures. As shown in Table 1.2, the welfare caseload totaled about 306,000 in July 1996. The number fell steadily during the follow-up period, reaching about 240,000 in September 1998 and 236,000 in July 1999. Los Angeles County accounts for more than one-third of the entire California caseload.19

AFDC/TANF grant levels declined by nearly 7 percent over the course of the evaluation (see Table 1.2). The maximum aid payment in California for a family of three in April 1996 was $607. The state reduced it in July 1996, to $594, and again in July 1997, to $565.20 Food Stamp levels rose slightly more than 8 percent during this period, increasing from $246 in October 1995, to $251 in Oc-tober 1996, to $267 in October 1997. The maximum payment levels for welfare and Food Stamps remained in place until after September 1998, the final month of follow-up for the evaluation. Between the beginning and the end of the evaluation period, welfare recipients who did not work experienced a 2.5 percent decrease in their AFDC/TANF and Food Stamp benefits.

7. Research Questions for This Report
1. Participation



The report on the first-year findings from the evaluation concluded that all experimental group members encountered Jobs-First GAIN’s strong pro-work message during the six-hour orientation session and at other times. Relatively few experimental group members (38 percent of AFDC-FGs and 30 percent of AFDC-Us), however, participated in employment-related activities in year 1. Participation was short term: Nearly all participants attended one three-week spell of job club, and very few took part in longer-term education and training activities. That report also found that Jobs-First GAIN case managers made extensive use of enforcement procedures. About 23 percent of AFDC-FGs and 17 percent of AFDC-Us incurred a sanction for noncompliance with Jobs-First GAIN’s mandatory participation requirements during the first year of follow-up. These rates exceeded by a wide margin the sanction rate for the earlier GAIN program in Los Angeles, but were comparable to those found for some other employment-focused programs in the 1990s. The current report, which explores whether these patterns continued in year 2, addresses the following questions:

• Did participation levels continue to be relatively low? Or did a large percentage of experimental group members who had not previously attended a Jobs-First GAIN activity after orientation begin participating in year 2? Did most of these new participants attend job club?

• Did experimental group members who completed job club in year 1 without finding employment participate in additional employment-related activities in year 2? Did participants attend additional job club sessions or switch to longer-term skill-building activities?

• Did Jobs-First GAIN staff continue strongly enforcing the program’s mandatory participation requirements? Did sanction rates increase in year 2? How often did program staff sanction experimental group members who had not incurred a sanction in year 1?

The report also looks at patterns of participation outside Jobs-First GAIN during the two-year follow-up period:

• Did a substantial proportion of experimental and control group members attend employment-related activities outside Jobs-First GAIN on their own initiative? In what types of activities did they participate?

• Counting participation within Jobs-First GAIN and outside the program, did Jobs-First GAIN increase experimental group members’ use of employment-related services relative to control group members’? Did the program increase participation only in job club, its primary activity, or in other types of pre-employment activities as well?

2. Costs

• On average, how much did Jobs-First GAIN and other programs spend to provide services, case management, and supportive service payments to experimental group members?

• What was the program’s net cost — that is, what is the difference between the average cost for experimental group members and the average cost for control group members?

• Was Jobs-First GAIN’s net cost comparable to the net cost of other Work First programs in California? Did Jobs-First GAIN have a smaller net cost than the earlier, basic-education-focused Los Angeles GAIN program?

3. Impacts on Employment, Earnings, and Receipt of Public Assistance

• Did Jobs-First GAIN sustain the year 1 boost in employment and earnings in year 2?

• Did Jobs-First GAIN increase employment at jobs with full-time hours and medical coverage?

• To what extent did Jobs-First GAIN reduce dependence on welfare and Food Stamp benefits?

• Were short-term employment and earnings gains and welfare reductions larger for Jobs-First GAIN than for the earlier, basic-education-focused Los Angeles GAIN program and for other employment-focused programs?

4. Impacts on Income, Self-Sufficiency, and Material Well-Being

• Did Jobs-First GAIN increase the proportion of sample members who were working and off welfare at the end of year 2?

• Did the program make sample members better off financially? Did experimental group members’ gains from earnings, estimated fringe benefits, and the EITC exceed their losses in public assistance?

• Did Jobs-First GAIN increase the proportion of sample members who lived with another wage earner or with someone receiving income from other sources?

• Did Jobs-First GAIN affect levels of medical coverage?

• Did the program affect levels of food insecurity and hunger?

5. Impacts on Child Care Use, Home Environment, and Child Outcomes

• Did Jobs-First GAIN affect the use and reliability of child care?

• To what extent did experimental and control group members rely on child care that they paid for, subsidized care, and unpaid care from family and friends?

• Did Jobs-First GAIN increase the likelihood of AFDC-FGs’ getting married or living with a boyfriend or partner? Did the program affect the likelihood of sample members’ having another child?

• Did the program affect children’s academic performance, emotional and behavioral adjustment, or safety? Did the effects vary by children’s age or gender?

6. Impacts on Employment and Welfare for Key Subgroups



A key task of the Jobs-First GAIN Evaluation is to analyze whether Los Angeles County's Work First approach benefited many types of recipients or primarily certain subgroups of the caseload. Key subgroups for analysis include:

• Inhabitants of different geographic areas of the county

• Members of different racial/ethnic groups, and within these groups, people proficient or not proficient in English

• People who entered the program with a high school diploma or a GED certificate and nongraduates

• Short- and long-term welfare recipients

• People with or without a recent work history

• People with multiple barriers to employment (for example, no high school diploma or GED certificate, no recent work history, and long-term welfare receipt)

• Among AFDC-FGs, early and regular enrollees

• Among AFDC-Us, men and women

The last two subgroup analyses address specific questions concerning DPSS’s strategy for targeting services to particular types of welfare recipients. As discussed above, DPSS lacked the funding necessary to serve all welfare recipients mandated to participate in Jobs-First GAIN. Therefore, DPSS placed recipients on a waiting list, which was ordered according to recipients’ length of welfare receipt as well as other background characteristics. Most enrollees in Jobs-First GAIN entered the program after reaching the top of the waiting list and receiving a notice from DPSS informing them that a place in the program had become available. These people are called regular enrollees. Other enrollees asked DPSS for and were granted permission to enter the program early, that is, before they reached the top of the waiting list. These people are called early enrollees. Both early and regular enrollees were randomly assigned to the experimental and control groups. Further, both early and regular enrollee experimental group members were subject to Jobs-First GAIN’s mandatory participation requirements and could incur a sanction for noncompliance. Including early enrollees in a random assignment study of Jobs-First GAIN allows the evaluation to address a long-standing question in welfare reform: When funds are scarce, should welfare-to-work programs target recipients who show the highest motivation to participate?

Most previous studies of AFDC-Us in welfare employment programs focused only on household heads (usually men). In this evaluation, in contrast, the AFDC-U group consists of both primary wage earners (usually men) and second parents (usually women). The research design, however, permitted only one adult member of an AFDC-U household to be included in the research sample: the first to show up for the program orientation. Nearly half of the AFDC-Us in the sample are women. Thus, the evaluation offers an unusual opportunity to investigate a welfare-to-work program’s effects on women in two-parent families. (What little research exists indicates that female AFDC-U recipients have scant prior earnings and tend not to benefit as much from welfare-to-work programs as their male counterparts.)

The Jobs-First GAIN Evaluation began after California received a federal waiver eliminating regulations that terminated an AFDC-U case if the primary wage earner worked 100 hours or more in a month. This change affected all AFDC-Us, including control group members. Thus, studying the employment and earnings effects of Jobs-First GAIN for AFDC-U men (usually the primary wage earners) yields valuable information on the long-term impact of the elimination of this “100-hour rule.” The evaluation also tests whether a Work First program can increase employment and earnings among primary wage earners who face no regulations limiting how much they can work.

7. Comparisons with Other Programs



Another key task of the evaluation is to compare the effects of Jobs-First GAIN with those of the three previously evaluated welfare-to-work programs below.21

• Los Angeles GAIN, the country's basic-education-focused program, which served long-term recipients22 during the late 1980s and early 1990s

Most enrollees who participated in Los Angeles GAIN’s employment-related activities attended classes in ABE, ESL, or, less often, GED preparation. Relatively few participated in job search, unpaid work experience, or occupational skills training. The program’s emphasis on basic education conformed to statewide requirements to provide these services to welfare recipients who had not attained a high school diploma or a GED certificate, who scored below minimum levels on reading or math tests administered at program entry, or who were not proficient in English. Nearly everyone who entered Los Angeles GAIN during the late 1980s and early 1990s — 80 percent of AFDC-FGs and more than 90 percent of AFDC-Us — met at least one of these three criteria for needing basic education.

An MDRC evaluation of Los Angeles GAIN found that, for AFDC-FGs, the program reduced welfare expenditures to some extent, but did not raise earnings. The program had more positive effects for AFDC-Us, although the earnings gain was still small, averaging less than $300 per enrollee per year.

• Riverside County GAIN, a Work First, mixed-services program, operated in neighboring Riverside County during the late 1980s and early 1990s

The Riverside GAIN program offered job search services to a large segment of the caseload, employed job developers to help move enrollees quickly into jobs, issued job placement goals for program staff, and encouraged enrollees to find work as soon as possible. All of these program features are consistent with a strong Work First approach. In keeping with statewide directives, however, Riverside GAIN also offered basic education instruction as a first activity to enrollees determined to need it. Because of this combination of services, Riverside GAIN is sometimes referred to as a “mixed-services” program. An MDRC evaluation of the program found unprecedented employment and earnings increases and welfare savings.

• The Riverside GAIN Labor Force Attachment (LFA) program, a Work First, job-search-first program, operated in Riverside County in the early to mid-1990s; nearly all enrollees were placed immediately into job search activities.

As part of a national evaluation of welfare-to-work programs in the early 1990s, the National Evaluation of Welfare-to-Work Strategies, Riverside County welfare administrators operated two versions of the GAIN program simultaneously to determine which approach worked better. The first version used a Human Capital Development (HCD) program model, in which participants received education and training services to upgrade their skills prior to seeking work. The HCD objective was to prepare people for jobs that offered sufficient wages and benefits to get them and keep them off welfare. The second version of Riverside GAIN employed a Labor Force Attachment (LFA) program model. LFA placed enrollees (even those who had not graduated from high school or attained a GED certificate or who were determined to have low literacy or math skills) immediately in job search activities, advocating quick exposure to and entry into the labor market as the best route to earnings increases, job advancement, and self-sufficiency. Recent evaluations of Riverside LFA have found that the program produced larger earnings gains and welfare savings than many education-focused programs, including Riverside HCD and Los Angeles GAIN. Its effects were not as large, however, as those attained by the previous employment-focused, mixed-services Riverside GAIN program.

As discussed in the first report on the Jobs-First GAIN Evaluation, DPSS administrators consulted with their counterparts in Riverside County when designing Jobs-First GAIN in the mid-1990s. Sharing Riverside’s growing commitment to the Work First approach, DPSS administrators adopted several features of the Riverside LFA program (some of which, such as the use of job developers and encouragement of quick entry into the job market, were also part of Riverside GAIN). Other features, such as Riverside’s strong emphasis on placement goals for program staff, were not incorporated into Jobs-First GAIN.

The similarities between Los Angeles Jobs-First GAIN and Riverside LFA in their welfare-to-work approach and their operation under the same statewide welfare regulations make comparisons between them particularly meaningful.

8. Cost-Effectiveness

• Did Jobs-First GAIN realize savings in public assistance and associated administrative expenses and lead to increases in tax revenues? Did these benefits to government budgets exceed the higher costs of services for experimental group members?

• Was Jobs-First GAIN more cost-effective than the previous, basic-education-focused GAIN program? Were the results as positive as those attained by other employment-focused programs, such as Riverside GAIN?

9. Looking Toward CalWORKs



Studies of CalWORKs are still in an early phase. It remains to be seen whether DPSS’s strategy of combining Jobs-First GAIN’s services and pro-work message with welfare time limits, stronger financial incentives to work, special services, and post-employment services will produce larger boosts in employment and larger reductions in welfare dependency. The present evaluation may provide important context for future studies, however, by examining both the successes and limitations of Jobs-First GAIN. If the program led to large increases in stable employment with high earnings, self-sufficiency, and material well-being, the need for additional services and incentives may not be great. Alternatively, if many experimental group members remained poor and on welfare, despite the program’s employment and earnings gains, additional services and supports would likely be warranted. Questions of interest include:

• Did Jobs-First GAIN increase employment stability or increase employment by moving people into jobs that they quickly lost?

• At the end of year 2, were most experimental group members still receiving welfare benefits? Were most experimental group members who were working also receiving assistance?

• Did Jobs-First GAIN increase use of subsidized child care or transitional Medi-Cal?

• Did the program increase experimental group members’ incomes sufficiently to lift their families out of poverty?

8. Data Sources for This Report

1. GEARS Automated Appraisal and Program Tracking Records

Sample members’ background characteristics were recorded by Jobs-First GAIN staff during orientation and appraisal meetings and entered into the GAIN Employment Activity and Reporting System (GEARS). These background data, which are available for all sample members, are used to divide the sample into key subgroups. Most of the data, including educational attainment status and length of prior welfare receipt, are self-reported by sample members, although some, such as date of birth, were transferred automatically from DPSS’s automated welfare eligibility and payment system, the Integrated Benefit Payment System (IBPS).

GEARS also supplied data on experimental group members’ use of Jobs-First GAIN services, the frequency with which they entered nonmandatory status, and the likelihood of their encountering the program’s formal enforcement procedures, including financial sanctions. Moreover, GEARS records permitted estimation of experimental group members’ length of stay in program activities. At least two years of follow-up data are available for all experimental group members.

2. GEARS Supportive Service Records

The GEARS system also supplied two years or more of data on DPSS supportive services payments for child care, transportation, and ancillary expenses for supplies such as books, clothing, and protective equipment. As noted earlier, experimental and control group members were eligible to receive payments, and payments for both groups were recorded in GEARS.

3. Statewide Unemployment Insurance Earnings Records

Employment and earnings impacts were computed using automated statewide Unemployment Insurance (UI) records data from California’s Employment Development Department. Data for eight quarters, or two years, are available for all sample members, starting with the first calendar quarter after random assignment – that is, from quarter 2 through quarter 9. (UI earnings records for quarter 1, which includes the date of random assignment, are excluded from the analysis because they may contain earnings from employment that occurred before random assignment.) Recorded statewide, UI earnings can be used to make reasonably accurate and unbiased measures of employment, including earnings within California but outside of Los Angeles County. Data are not available for out-of-state earnings or for work not usually covered by the UI system, such as self-employment, domestic service, informal child care, and work “off the books” or for employees who do not report earnings. 23

4. Automated AFDC/TANF and Food Stamp Payment Records

Impacts on receipt of AFDC/TANF and Food Stamps were calculated using automated payment records from DPSS’s IBPS. Two years of follow-up data are available for all sample members. Because California’s counties maintain separate payment systems, the IBPS analysis misses payments to sample members who moved to other counties in the state and received welfare or Food Stamps there. As discussed in Chapter 5, calculations from statewide Medi-Cal eligibility data suggest that this problem did not affect the impact findings. Less than 5 percent of sample members received a payment elsewhere in California during the two-year follow-up period. Further, Jobs-First GAIN did not cause more experimental or control group members to move out of Los Angeles County and go on assistance.

5. Automated Medi-Cal Eligibility Records

Impacts on receipt and costs of Medi-Cal benefits were estimated from California’s statewide eligibility records in the Medi-Cal Eligibility Determination System (MEDS). Two years of follow-up data are available for all sample members. MEDS data were also used to estimate Jobs-First GAIN’s program effects on receipt of Supplemental Security Insurance (SSI) and receipt of AFDC/TANF benefits in counties other than Los Angeles.

Although the MEDS system provides both payment and eligibility information on every adult and child covered by Medi-Cal, MDRC collected eligibility information only for the sample member.24 To estimate the program’s impacts on Medi-Cal costs, MDRC used published data on Medi-Cal expenditures and assumptions about the number of people covered per month.

6. Two-Year Client Survey

This report also presents analyses of the Two-Year Client Survey, which was administered to a subsample of 746 single-parent (AFDC-FG) experimental and control group members about two years after random assignment (see Table 1.3). MDRC selected survey respondents from each month during which new sample members joined the program, but excluded male single parents and sample members not proficient in English or Spanish. A stratified random sample was chosen. About 80 percent of people in the survey sample were regular enrollees and 20 percent were early enrollees. As intended, these proportions closely match the proportions of these two groups in the full sample. Just over 74 percent of sample members chosen completed the survey.

Interviews for the Two-Year Client Survey were conducted in English or Spanish. Survey respondents were asked about their participation in employment-related activities within and outside Jobs-First GAIN since random assignment; educational attainment; employment history; household structure and income; medical coverage and receipt of noncash benefits; level of food insecurity and hunger; use of child care for employment and for other reasons; and indicators of their children's school progresses, emotional and behavioral well-being, and safety.

Data from the Two-Year Client Survey provide information on topics not covered by administrative data, such as use of program services outside Jobs-First GAIN by experimental and control group members. The survey data also fill in gaps in administrative data, such as participation in employment-related activities outside Jobs-First GAIN and employment at jobs not covered by the statewide UI system. Some of the survey data overlap with administrative data, and for several reasons, results calculated from the two sources may differ. First, survey respondents may have provided incorrect start or end dates when asked to recall participation or employment that occurred during the early months of follow-up. In addition, some respondents may have been reluctant to provide information on employment and income that can be found in administrative records. In other cases, survey data may be more accurate. For example, earnings that employers failed to report or inaccurately reported to the UI system may be captured by the survey.

7. Statewide and County Reports and Fieldwork and Interviews with Administrators and Staff

The descriptions of Los Angeles GAIN, Jobs-First GAIN, and CalWORKs reported above were based on site visits and observations of program operations, discussions with program administrators and staff, agency memos and directives supplied by DPSS, and calculations from tables in agency reports. Agency reports and expenditure data were also used in the benefit-cost calculations presented in this report.

9. The Contents of This Report

Chapter 2 examines experimental and control group members’ use of program services and estimates the impacts of Jobs-First GAIN on participation. The chapter also examines the extent to which experimental group members encountered Jobs-First GAIN’s formal enforcement procedures. Chapter 3 presents the average costs of providing employment-related services to experimental and control group members and calculates the experimental-control difference in cost, or net cost, of Jobs-First GAIN. Chapter 4 discusses the program’s impacts on employment rate, earnings, and AFDC/TANF and Food Stamp receipt for single-parent (AFDC-FG) sample members, including the impacts for key subgroups. These results are then compared with those achieved by the earlier Los Angeles GAIN program and several other employment-focused welfare-to-work programs. Chapter 5 examines Jobs-First GAIN’s impacts on indicators of income, self-sufficiency, access to medical coverage, and material well-being for AFDC-FG sample members. Chapter 6 summarizes the program’s effects on child care use, costs, and reliability; household composition; and child outcomes for AFDC-FG sample members. Chapter 7 presents the two-year impacts of Jobs-First GAIN on employment, earnings, and receipt of AFDC/TANF and Food Stamps for two-parent (AFDC-U) sample members and key subgroups thereof. Finally, Chapter 8 presents the results of a benefit-cost analysis of Jobs-First GAIN from the perspectives of experimental group members and the government budget.