Academic journal article Federal Reserve Bank of New York Economic Policy Review

Changing the Culture of the Welfare Office: The Role of Intermediaries in Linking TANF Recipients with Jobs

Academic journal article Federal Reserve Bank of New York Economic Policy Review

Changing the Culture of the Welfare Office: The Role of Intermediaries in Linking TANF Recipients with Jobs

Article excerpt

The Personal Responsibility and Work Opportunity Reconciliation Act (PRWORA), enacted in August 1996, brought sweeping changes to the country's welfare system. Through the elimination of the sixty-one-year-old Aid to Families with Dependent Children (AFDC) program and the creation of the Temporary Assistance for Needy Families (TANF) block grant, the new law shifted the emphasis of the welfare system from providing ongoing cash assistance to placing welfare recipients in jobs.

Local welfare offices have relied on a number of different strategies to shift to a more work-oriented assistance system. Some have expanded the role of former income maintenance (eligibility) workers to include more tasks related to helping welfare recipients find employment, or they have hired additional staff to perform these functions. Others have created closer alliances with, or transferred primary responsibility for employment-related activities to, the local workforce development system. Nearly all have increased their use of "intermediaries": private or public organizations that act as brokers between the welfare system and employers.

Because states have been given so much flexibility to decide how to structure their TANF programs, there has been considerable emphasis on understanding the variation in states' policy choices. However, there has been far less emphasis on trying to understand how states and local welfare offices have reorganized to provide the services TANF recipients need in order to make the transition from welfare to work. Clearly, a state's policy choices are important; these choices set the parameters that define what is expected of clients, what consequences they will face if they do not meet those expectations, and what benefits will be provided to them and under what circumstances. But a state or local TANF office's employment service delivery system is an equally important piece of the new social contract we have imposed upon families who turn to the government for support. It is through this service delivery system that TANF clients receive or do not receive the assistance they need to do what is expected of them, which in most states is finding work as quickly as possible.

In an effort to increase our understanding of the design and structure of this new service delivery system, this study examines the characteristics of intermediary organizations and explores the role they play in linking welfare recipients with jobs. The study was undertaken because there was widespread belief-but limited systematic evidence-that many welfare offices transferred to intermediaries significant responsibility for helping welfare recipients find jobs. Time limits on the receipt of benefits and full family sanctions for noncompliance with work requirements have increased the importance of providing TANF recipients with the assistance they need to find employment quickly and to maintain it over the long term. To the extent that intermediaries are able to link clients who would be unable to find employment on their own with employers who are willing to hire them, they will contribute to the success of welfare reform. However, if the intermediaries are unable to help clients make these linkages, they could contribute to the failure of welfare reform and increase the risk of clients being adversely affected by new policies such as time limits. Consequently, even though some states historically may have used intermediary organizations to help welfare recipients find employment, the increased emphasis on work increases the importance of understanding their role and what influence, if any, these organizations may have on the success or failure of welfare reform.


To reduce the cost and size of government, state and local governments are increasingly contracting with private agencies to provide public services. In recent years, the privatization of such social services as transportation, mental health care, corrections, health, and education has increased among state agencies (Council of State Governments 1993; Kettner and Martin 1995; U. …

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