Welfare and Work: Job-Retention Outcomes of Federal Welfare-to-Work Employees

Article excerpt

In 1996, President Clinton signed into law the Personal Responsibility and Work Opportunity Reconciliation Act (P.L. 104-193). The centerpiece of this law is a block grant, Temporary Assistance for Needy Families (TANF), designed to reform welfare by providing time-limited cash assistance, with mandatory work requirements for most recipients. Ultimately, the success of this policy initiative is not only dependent upon the actions of welfare recipients and social service agencies, but also upon the willingness of employers to provide job opportunities to welfare recipients.

The hiring of welfare recipients is an important step in realizing policy goals of federal welfare reform efforts. It provides an initial entry into the labor market, typically removing the employee from the welfare caseload. Other important steps remain, however. In particular, the ability of welfare recipients to retain their jobs after employment is an equally important step toward promoting long-term economic self-sufficiency. Although a substantial percentage of welfare recipients exit welfare within a year due to employment (Bane and Ellwood 1983; Ellwood 1986), many also return to welfare within a short time period (Brown et al. 1998; Pavetti 1997; Rangarajan 1998).

The challenge for many welfare recipients is to find "good"(1) entry-level jobs that are worth retaining. Since many entry-level, low-wage jobs offer part-time, temporary employment with few benefits (Brown et al. 1998; Pavetti 1997), government may be a particularly attractive employer. Miller (1996) finds that in lower-paying jobs, state and local governments generally pay better than the private sector. Federal employers may also place a higher priority on job stability by allowing employees the opportunity to correct unsatisfactory job performance (Robish 1996).

It is important for the federal government to demonstrate a commitment to hiring welfare recipients. By doing so, the federal government shows its willingness to support TANF's objectives and establishes the expectation that other employers will follow. To fulfill this commitment, on March 8, 1997, President Clinton announced the Welfare-to-Work Initiative, a major effort to employ 10,000 welfare hires to work in federal agencies by 2000. In particular, all executive departments and agency heads were directed to use all available hiring authorities to hire welfare recipients into available government positions. This goal was met in early 1999, with many agencies exceeding their hiring goals.

This study examines job-retention outcomes of the federal Welfare-to-Work Initiative. President Clinton's Welfare-to-Work memorandum directed all federal agencies to develop plans that "describe in detail how the agency will assist welfare recipients, once hired, to perform well and to keep their jobs" (Clinton 1997, 1). Although agencies are required to have a plan for retaining welfare recipients, data on job retention are not routinely reported. The Office of Personnel Management (OPM) reports "Welfare-to-work Commitment and Hires" on a monthly basis, but these data only include the number of Welfare-to-Work hires. These figures do not provide meaningful data to evaluate the administration's job-retention goals since they do not report Welfare-to-Work terminations. Consequently, important information about job retention and Welfare-to-Work employees is not known. How many Welfare-to-Work hires retain their jobs after three months? After six months? Do their job-retention patterns differ from other federal employees? The results from this analysis establish a benchmark to compare job-retention patterns between Welfare-to-Work and non-Welfare-to-Work employees.

The Importance of Job Retention

Job retention is important to welfare recipients, TANF program administrators, and employers. For welfare recipients, job-retention may be the first step toward evening out spotty work histories, establishing a positive work history, moving up the career ladder, and securing financial independence (Brown et al. …