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The Effects of Welfare-to-Work Program Activities on Labor Market Outcomes

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Author Info
Dyke, Andrew (University of North Carolina-Chapel Hill)
Heinrich, Carolyn J. (LaFollette School of Public Affairs, University of Wisconsin-Madison)
Mueser, Peter R. (University of Missouri-Columbia and IZA Bonn)
Troske, Kenneth R. () (University of Missouri-Columbia and IZA Bonn)

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Abstract

Studies examining the effectiveness of welfare-to-work programs present findings that are mixed and sometimes at odds, in part due to research design, data, and methodological limitations of the studies. We aim to substantially improve on past approaches to estimate program effectiveness by using administrative data on welfare recipients in Missouri and North Carolina to obtain separate estimates of the effects of participating in sub-programs of each state's welfare-to-work program. Using data on all women who entered welfare between the second quarter of 1997 and fourth quarter of 1999 in these states, we follow recipients for sixteen quarters and model their quarterly earnings as a function of demographic characteristics, prior welfare and work experience, the specific types of welfare-to-work programs in which they participate, and time since participation. We focus primarily on three types of subprograms–assessment, job readiness and job search assistance, and more intensive programs designed to augment human capital skills–and use a variety of methods that allow us to compare how common assumptions influence results. In general, we find that the impacts of program participation are negative in the quarters immediately following participation but improve over time, in most cases turning positive in the second year after participation. The results also show that more intensive training is associated with greater initial earnings losses but also greater earnings gains in the long run.

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Publisher Info
Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 1520.

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Length: 48 pages
Date of creation: Mar 2005
Date of revision:
Handle: RePEc:iza:izadps:dp1520

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Related research
Keywords: evaluation; training; sub-programs; welfare;

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Find related papers by JEL classification:
J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials

This paper has been announced in the following NEP Reports:

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Louis S. Jacobson & Robert J. LaLonde & Daniel G. Sullivan, 1994. "The returns from classroom training for displaced workers," Working Paper Series, Macroeconomic Issues 94-27, Federal Reserve Bank of Chicago.
  2. David H. Autor & Susan Houseman, 2005. "Do Temporary Help Jobs Improve Labor Market Outcomes for Low-Skilled Workers? Evidence from 'Work First'," NBER Working Papers 11743, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  3. Dyke, Andrew & Heinrich, Carolyn J. & Mueser, Peter R. & Troske, Kenneth R., 2005. "The Effects of Welfare-to-Work Program Activities on Labor Market Outcomes," IZA Discussion Papers 1520, Institute for the Study of Labor (IZA). [Downloadable!]
    Other versions:
  4. A. Smith, Jeffrey & E. Todd, Petra, 2005. "Does matching overcome LaLonde's critique of nonexperimental estimators?," Journal of Econometrics, Elsevier, vol. 125(1-2), pages 305-353. [Downloadable!] (restricted)
    Other versions:
  5. V. Joseph Hotz & Guido W. Imbens & Jacob A. Klerman, 2001. "The Long-Term Gains from GAIN: A Re-Analysis of the Impacts of the California GAIN Program," Working Papers 01-03, RAND Corporation Publications Department. [Downloadable!]
  6. Black, Dan A. & Smith, J.A.Jeffrey A., 2004. "How robust is the evidence on the effects of college quality? Evidence from matching," Journal of Econometrics, Elsevier, vol. 121(1-2), pages 99-124. [Downloadable!] (restricted)
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  7. Michael Lechner, 1999. "Identification and Estimation of Causal Effects of Multiple Treatments Under the Conditional Independence Assumption," IZA Discussion Papers 91, Institute for the Study of Labor (IZA). [Downloadable!]
  8. V. Joseph Hotz & Guido W. Imbens & Jacob A. Klerman, 2000. "The Long-Term Gains from GAIN: A Re-Analysis of the Impacts of the California GAIN Program," NBER Working Papers 8007, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  9. Peter R. Mueser & Kenneth R. Troske & Alexey Gorislavsky, 2006. "Using State Administrative Data to Measure Program Performance," Working Papers 0702, Department of Economics, University of Missouri. [Downloadable!]
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  10. Heckman, J.J. & Hotz, V.J., 1988. "Choosing Among Alternative Nonexperimental Methods For Estimating The Impact Of Social Programs: The Case Of Manpower Training," University of Chicago - Economics Research Center 88-12, Chicago - Economics Research Center.
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  11. Jacobson, Louis & LaLonde, Robert & Sullivan, Daniel G., 2004. "Estimating the Returns to Community College Schooling for Displaced Workers," IZA Discussion Papers 1017, Institute for the Study of Labor (IZA). [Downloadable!]
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  12. Pascal Courty & Gerald Marschke, 2004. "An Empirical Investigation of Gaming Responses to Explicit Performance Incentives," Journal of Labor Economics, University of Chicago Press, vol. 22(1), pages 23-56, January. [Downloadable!]
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  13. Alberto Abadie & Guido W. Imbens, 2006. "Large Sample Properties of Matching Estimators for Average Treatment Effects," Econometrica, Econometric Society, vol. 74(1), pages 235-267, 01. [Downloadable!] (restricted)
  14. Carolyn J. Heinrich & Peter R. Mueser & Kenneth R. Troske, 2005. "Welfare to Temporary Work: Implications for Labor Market Outcomes," The Review of Economics and Statistics, MIT Press, vol. 87(1), pages 154-173, December. [Downloadable!] (restricted)
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Full references

Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Oscar Mitnik, 2008. "How do Training Programs Assign Participants to Training? Characterizing the Assignment Rules of Government Agencies for Welfare-to-Work Programs in California," Working Papers 0907, University of Miami, Department of Economics. [Downloadable!]
    Other versions:
  2. Steven F. Lehrer & Nuno Sousa Pereira, 2008. "Worker Sorting, Health Insurance and Wages: Further Evidence from Displaced Workers in the United States," CETE Discussion Papers 0804, Universidade do Porto, Faculdade de Economia do Porto. [Downloadable!]
  3. Rachel Gordon & Carolyn Heinrich, 2009. "The potential of a couples approach to employment assistance: results of a nonexperimental evaluation," Review of Economics of the Household, Springer, vol. 7(2), pages 133-158, June. [Downloadable!] (restricted)
  4. Ellen Meara & Meredith Rosenthal & Anna Sinaiko & Katherine Baicker, 2008. "State and Federal Approaches to Health Reform: What Works for the Working Poor?," NBER Working Papers 14125, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  5. Biewen, Martin & Fitzenberger, Bernd & Osikominu, Aderonke & Waller, Marie, 2007. "Which Program for Whom? Evidence on the Comparative Effectiveness of Public Sponsored Training Programs in Germany," ZEW Discussion Papers 07-042, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research. [Downloadable!]
    Other versions:
  6. Peter R. Mueser & Kyung-Seong Jeon & Andrew Dyke & Carolyn J. Heinrich & Kenneth R. Troske, 2006. "The Effects of Welfare-to-Work Program Activities on Labor Market Outcomes," Working Papers 0602, Department of Economics, University of Missouri. [Downloadable!]
    Other versions:
  7. Peter R. Mueser & David W. Stevens & Kenneth R. Troske, 2007. "The Impact of Welfare Reform on Leaver Characteristics, Employment and Recidivism: An Analysis of Maryland and Missouri," IZA Discussion Papers 3131, Institute for the Study of Labor (IZA). [Downloadable!]
    Other versions:
  8. Peter R. Mueser & Kenneth R. Troske & Carolyn J. Heinrich, 2007. "The Role of Temporary Help Employment in Low-wage Worker Advancement," Working Papers 0719, Department of Economics, University of Missouri. [Downloadable!]
    Other versions:
  9. Katherine Baicker & Helen Levy, 2007. "Employer Health Insurance Mandates and the Risk of Unemployment," NBER Working Papers 13528, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  10. Blomquist, Glenn C. & Coomes, Paul A. & Jepsen, Christopher & Koford, Brandon C. & Troske, Kenneth, 2009. "Estimating the Social Value of Higher Education: Willingness to Pay for Community and Technical Colleges," IZA Discussion Papers 4086, Institute for the Study of Labor (IZA). [Downloadable!]
  11. Steven F. Lehrer & Nuno Sousa Pereira, 2007. "Worker Sorting, Compensating Differentials and Health Insurance: Evidence from Displaced Workers," NBER Working Papers 12951, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
    Other versions:
  12. Peter R. Mueser & Kenneth R. Troske & Alexey Gorislavsky, 2006. "Using State Administrative Data to Measure Program Performance," Working Papers 0702, Department of Economics, University of Missouri. [Downloadable!]
    Other versions:
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