Personal and Family Challenges to the Successful Transition from Welfare to Work

By
Krista Olson and LaDonna Pavetti
The Urban Institute
May 17, 1996

For the
Office of the Assistant Secretary for Planning and Evaluation
and the
Administration for Children and Families

EXECUTIVE SUMMARY

Time limits, increasing employment and training participation requirements, and strict economic sanctions for non-compliance with program expectations, all increase the importance of engaging a broader share of the AFDC caseload in employment or employment-related activities. Over time, these policy changes will require states and local welfare offices to develop strategies to engage welfare recipients who have traditionally been exempted from participation in education or training activities, as well as other long-term recipients, in welfare-to-work programs. This paper is the first of a series of papers that will examine the magnitude of this challenge and identify potential options for helping this group of families find and maintain employment.

In an attempt to identify the percentage of the caseload that is likely to need more assistance than traditional welfare-to-work programs generally provide, this paper examines the following questions:

1. What are the types of personal and family challenges that may hinder a welfare recipient's movement toward productive and successful employment?
2. What do we know about the prevalence of each of these potential barriers to employment among the welfare population?
3. When the presence of multiple barriers is taken into account, what fraction of the current AFDC caseload is likely to experience at least one potential barrier to employment?
4. What do we know about the relationship between the presence of these potential barriers to employment and actual work experience?
5. What are the implications of these findings for the design and deliver of welfare-to- work programs?

To provide a comprehensive picture, we utilize existing literature, such as evaluations of welfare-to-work demonstration programs, informal surveys of direct service providers, analyses of large-scale national surveys, and case record reviews, which we supplement with a primary analysis of the National Longitudinal Survey of Youth (NLSY). Later papers will examine the characteristics and structure of programs already addressing these issues, develop a set of alternative intervention models to promote sustained employment among those who would otherwise fail to achieve employment goals, and design a multi-site demonstration project to test promising intervention strategies.

Key Findings

• Welfare recipients, like many non-welfare families, experience a broad range of family and personal issues that make employment difficult.

  Through an analysis of the literature, eight major personal and family challenges that may affect a recipient's transition from welfare to work were identified. These challenges include:

  • physical disabilities and/or health limitations;
  • mental health problems;
  • health or behavioral problems of children;
  • substance abuse;
  • domestic violence;
  • involvement with the child welfare system;
  • housing instability, and;
  • low basic skills and learning disabilities.

• There is a wide range of estimates on the prevalence of specific potential barriers to employment among the welfare population.

  Because there has been minimal attention to the role these issues play in the lives of welfare recipients, there is little documentation on the prevalence of these issues among the welfare population. The literature that does exist lacks standard definitions of the challenges identified above, resulting in a very wide range of estimates on the prevalence of these issues. For example, studies examining the prevalence of health conditions that limit the amount or kind of work a person can do range from 16.6 to 30.8 percent of the AFDC caseload. Similarly, studies examining the prevalence of substance abuse report estimates ranging from 6.6 to 37 percent of the AFDC caseload.

• Most welfare recipients experience at least one potential barrier to employment, with low basic skills being the most common.

  Analysis of data from the NLSY reveals that almost 90 percent of current recipients between the age of 27 and 35 experience one of five potential barriers to employment (low basic skills, substance abuse, a health limitation, depression, or a child with a chronic medical condition or serious disability). About half of all recipients experience a more serious form of one or more of these barriers (i.e., depression five to seven days a week; a health limitation that prevents work; concern that one is an alcoholic; repeated use of crack or cocaine; or extremely low basic skills). Low basic skills are much more common than the other potential barriers to employment included in this analysis. About one-third of recipients score in the bottom decile of the women's distribution of the Armed Forces Qualifying Test (AFQT), a test of basic skills that is highly correlated with employment and earnings, and another one-third score in the 10th to 25th percentiles. In comparison, 10 percent of recipients report not seeking work because of a medical problem; 13 percent report being depressed between five to seven days a week; five percent report a serious drinking problem and nine percent report heavy cocaine or crack use.

• The majority of recipients who experience potential barriers to employment work, but do so intermittently.

  In general, recent employment was almost as common among recipients who report potential barriers to employment as among those who do not report any barriers, making the existence of a potential barrier to employment a relatively poor indicator of whether a recipient will need additional assistance to find employment. The one exception to this pattern is for recipients with extremely low basic skills. Only 44 percent of recipients who scored in the bottom decile of the women's AFQT distribution reported working in the current or previous year, compared to 68 percent who scored above this level. About 57 percent of recipients reporting a potentially serious barrier, excluding extremely low skills, reported working, a percentage only slightly lower than the 62 percent of recipients who did not report such barriers.

  While employment is common among welfare recipients who face most potential barriers to employment, continuous employment is not. Only eleven percent of recipients reporting a serious barrier to employment who worked reported being employed for a full year, compared to 27 percent of those who did not report such a barrier.

• The one-quarter of the AFDC caseload who report a potentially serious barrier to employment and have no recent attachment to the labor force are likely to need more assistance than most traditional welfare-to-work programs provide to succeed in the labor market. Almost twice as many may need additional assistance to maintain steady employment.

  While many recipients with serious barriers to employment work, albeit intermittently, a modest fraction have no recent connection to the labor market. This group of recipients, who account for about 25 percent of the AFDC caseload, are likely to need more assistance than traditional welfare-to-work programs generally provide to succeed in the labor market. When one accounts for the fact that the vast majority of recipients with potentially serious barriers to employment who work do so only intermittently, the percentage of the caseload likely to need additional assistance to fare well on their own over the long-term, especially within a time-limited welfare system, increases dramatically -- to 51 percent.

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