Welfare Reform:

More Information Needed to Assess Promising Strategies to Increase Parents' Incomes

GAO-06-108: Published: Dec 2, 2005. Publicly Released: Jan 3, 2006.

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Following major welfare reform in 1996, the number of families receiving cash assistance was cut in half to 2 million. While many former recipients now rely more on their earnings, they often work at low-wage jobs with limited benefits and advancement opportunities. To better understand how to help these individuals and their families attain economic self-sufficiency, GAO is reporting on (1) strategies designed to increase income for TANF recipients through employment; (2) the key factors related to implementing and operating such strategies; and (3) actions the Department of Health and Human Services (HHS) has taken to facilitate the use of these strategies. GAO consulted experts to gather information about promising strategies and visited 26 programs.

Based on interviews with experts and site visits, we identified four strategies that aimed to increase incomes for recipients of Temporary Assistance for Needy Families (TANF)--training, post-secondary education, self-employment, and financial asset building. Training strategies often targeted services to particular groups or job market needs. Other programs used post-secondary education to position clients for higher-wage jobs. Some programs we visited gave participants the tools to run their own businesses as a way out of poverty. Finally, asset building strategies aim to help clients save and invest money to pursue career goals and support their families. The 26 programs we visited used one or more of these strategies. A broad network of local non-profits, state and local TANF offices, employers, and community colleges is key to operating these strategies. Some of the programs we visited were non-profits under contract with the TANF office. Others relied on a mix of public and private funds, some because of concerns that TANF's emphasis on work was a barrier to providing education and training options. State and local TANF offices, for their part, sometimes set policies and provide additional funding to encourage the strategies discussed in this report. Local non-profits and TANF agencies either directly provided or helped link clients to supplemental services such as child care, housing, on-the-job support, and transportation. As part of the broader network, local non-profits and TANF offices often forged links with employers and community colleges to leverage additional resources for their clients, including training curricula, career ladders, and work opportunities. HHS is supporting these strategies through research, targeted grants, and technical assistance. Efforts by other federal agencies, such as the Departments of Education and Labor, also support some of the strategies discussed in this report. HHS has several research projects focused on helping low-income individuals find higher-wage employment and build their assets. While these efforts are important, more needs to be known about the effectiveness of specific strategies, such as those identified in this report, in increasing TANF recipients' earnings capacity. In addition to the TANF block grant, HHS has two small grant programs that support employment and asset-building strategies. While HHS has provided some technical assistance to facilitate the use of these strategies, it is not clear whether service providers understand ways they can incorporate education and training in a work-focused welfare system. Furthermore, HHS faces some challenges disseminating information on new research or promising strategies to all of the organizations providing services to TANF clients in the more decentralized welfare environment.

Status Legend:

More Info
  • Review Pending-GAO has not yet assessed implementation status.
  • Open-Actions to satisfy the intent of the recommendation have not been taken or are being planned, or actions that partially satisfy the intent of the recommendation have been taken.
  • Closed-implemented-Actions that satisfy the intent of the recommendation have been taken.
  • Closed-not implemented-While the intent of the recommendation has not been satisfied, time or circumstances have rendered the recommendation invalid.
    • Review Pending
    • Open
    • Closed - implemented
    • Closed - not implemented

    Recommendations for Executive Action

    Recommendation: To help ensure that the federal government considers research on these promising strategies and better informs welfare agencies and programs about how they might incorporate such strategies for TANF recipients, the Secretary of HHS should review its current research agenda and identify opportunities to conduct and promote additional research on increasing earnings capacity among low-income parents.

    Agency Affected: Department of Health and Human Services

    Status: Closed - Implemented

    Comments: While the agency disagreed with our recommendation, claiming that it was already conducting relevant research, it did keep our recommendation in mind when contracting for a new study, according to study researchers. This study--"Innovative Employment Approaches and Programs for Low-Income Families"-- was issued in February 2007 and HHS took steps to broadly disseminate it. HHS has also recently undertaken a broad, multi-year effort that will explore relevant issues, including strategies discussed in the report such as postsecondary education and training to enhance incomes. The effort, called the "Innovative Strategies for Increasing Self-Sufficiency" project (ISIS), began in 9/07 and will end in 9/14.

    Recommendation: To help ensure that the federal government considers research on these promising strategies and better informs welfare agencies and programs about how they might incorporate such strategies for TANF recipients, the Secretary of HHS should review existing research dissemination and technical assistance efforts across its relevant units to better ensure a comprehensive process for distributing information and implementation assistance to the wide range of program administrators and programs involved in welfare reform.

    Agency Affected: Department of Health and Human Services

    Status: Closed - Implemented

    Comments: HHS initially said that our recommendations were not warranted because of its existing efforts and it has not identified for us a systematic review of its existing efforts. However, it has used several mechanisms to disseminate information on the topic of former welfare families moving ahead. These include an electronic newsletter, a website, peer technical assistance listserve, as well as a national research conference. In addition, in 2008, its peer technical assistance listserve was revamped to more effectively reach all parties who could benefit. Lastly, as part of its new research project (ISIS) noted above, it performed extensive outreach to understand the research needs of key stakeholders in welfare programs. It conducted semi-structured discussions with over 250 individuals between May and September 2008. Respondents included a diverse selection of state executive office and agency staff, state legislators and staff, federal officials, researchers, advocates, and foundation representatives to understand the research needs of multiple entities. Results informed the design of the project and were issued separately (Innovative Strategies for Increasing Self-Sufficiency (ISIS) Project: Stakeholder Views from Early Outreach April 2009, HHH/ACF/OPRE at http://www.acf.hhs.gov/programs/opre/welfare_employ/isis/reports.) In addition, HHS is formally partnering with the American Public Human Services Association, National Governors' Association, and the National Conference of State Legislatures on this project. The organizations are extensively involved in disseminating useful information to state and local officials on a regular basis.

    Recommendation: To help ensure that the federal government considers research on these promising strategies and better informs welfare agencies and programs about how they might incorporate such strategies for TANF recipients, the Secretary of HHS should seek out additional opportunities to work with the Secretaries of Labor and Education to jointly conduct and promote research and distribute information and implementation assistance related to enhancing skills and earnings capacity among low-income parents.

    Agency Affected: Department of Health and Human Services

    Status: Closed - Not Implemented

    Comments: While HHS initially said that our recommendations were not warranted because of all its existing efforts, an HHS official did cite at least four joint efforts with Labor on helping welfare and other low-income families move ahead in the labor market. While some of these had begun before our study, at least one of these began after our study was issued. In addition, new study efforts under way include many partners, with the acknowledgement of the cross-cutting nature of the issues. More specifically, HHS' new long-term project ISIS, noted above, addresses education and employment training issues and HHS conducted extensive outreach efforts that included other federal agencies. While the new project under way include many partners, Education and Labor are not formal partners in the project.

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