Targeting Job Retention Services for Welfare Recipients by Rangarajan, Schochet, and Chu

The Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (PRWORA) terminated the welfare program known as Aid to Families with Dependent Children (AFDC). The federal government now provides states with block grants to provide cash assistance under the Temporary Assistance for Needy Families (TANF) program. States have wide discretion to structure TANF eligibility, but federal law imposes a lifetime limit of 60 months on benefit receipt and imposes work requirements on adult recipients after a maximum of two years of benefit receipt. These changes mean that welfare recipients must now find jobs and stay employed. To help welfare recipients reach these goals, many state welfare agencies are setting up (or are considering setting up) job retention programs. However, because large numbers of welfare recipients are moving into the workforce, states may not have sufficient resources to provide job retention and advancement services to all welfare recipients who become employed. Therefore, states may want to target job retention services to those groups of newly employed welfare recipients who are at high risk of losing their jobs and who can most benefit from these services. This chapter examines the feasibility of targeting clients for job retention services. In particular, we give states and programs some guidance on how they can identify welfare recipients for job retention services. We do not address what specific services should be offered or targeted, rather, we provide a general statistical framework that can be used to rank clients by their likelihood of having poor labor market out-