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    Document Summary
    - Report Published -

    House Document No. 27

    Document Title
    Making Welfare Work: Virginia's Transformation From Dependency to Opportunity

    Department of Social Services

    Enabling Authority
    HB 2001 (Regular Session, 1995)

    Executive Summary
    The 1995 General Assembly passed into law Virginia's innovative welfare reform program - The Virginia Independence Program (VIP). The law mandated that "in administering the program, the Commissioner shall develop and use evaluation methods that measure achievement of the goals of the Program.'' It further specifies that "beginning December 1, 1996, and annually thereafter, the Commissioner shall file a report with the Governor and General Assembly regarding the achievement of such goals. The annual report shall include a full assessment of the Program, including effectiveness and funding status, statewide and for each locality a comparison of the results of the previous annual reports; and the impact of the Program." (See Appendix A for a copy of House Bill 2001.) This report addresses this mandate.

    VIP includes eligibility and work related policies for TANF (Temporary Assistance for Needy Families) recipients. The work related policies are known as VIEW (Virginia's Initiative for Employment not Welfare). This report covers the story of VIP from implementation to outcomes to future considerations.

    Since July 1995, more than 44,893 of the TANF cases mandatory for VIEW enrolled in the program. A high 71 percent, or 31,688, of those enrolled in VIEW found unsubsidized employment. Working VIEW participants earned more than $143 million by the end of SFY 99. Virginia helped these working parents with more than $255 million in case management, day care, transportation and other supportive services since VIEWS inception. Additional funds have helped develop regional initiatives that are seeking long-term solutions to transportation problems, especially in Virginia's rural areas. Even with the added supportive services expenses, Virginia had a net taxpayer savings of more than $202 million from pre-welfare reform expenditures. In short, Virginia invested in VIPNIEW and thousands of participants have responded by finding employment and contributing to Virginia's economy.

    VIP/VIEW Evaluation Initiatives. Although thousands of VIP/VIEW participants have joined the labor force, an innovative program like VIP warrants a full evaluation effort. This evaluation effort was planned and through a competitive application process, $2.3 million in federal evaluation funds were awarded to Virginia for an independent evaluation of VIP/VIEW. There are five studies included in this evaluation initiative: (1) an implementation study; (2) an outcome and impact analysis of VIP/VIEW; (3) a longitudinal study of the 24-month time limit cases; (4) a study of cases exempt from the VIEW program; and (5) a job retention demonstration project. All of the federally funded evaluation studies are being conducted by Virginia Tech's Center for Public Administration and Policy and their subcontractor Mathematica Policy Research Inc. (MPR). Interim and final reports from these studies will be completed over the next three years.

    The first of these reports, "Implementation of Welfare Reform in Virginia: A Work in Progress," (*1) was completed and the full executive summary was included in House Document 46 for the 1999 legislative session. Key findings of the implementation study were that: VIP/VIEW has been fully implemented; worker focus has shifted from one of providing cash assistance to one of supporting client efforts to find employment; full funding was critical to successful implementation; businesses have been receptive to hiring welfare recipients; the majority of VIEW enrollees found employment; and employment services workers believe that the earned income disregard, supportive services and the eligibility sanctions have been critical to program success.

    Executive summaries of the reports on the impact of VIP/VIEW as compared to AFDC/JOBS (Aid to Families with Dependent Children/Job Opportunities and Basic Skills) (impact study), the effect of the 24-month time limit on cases six months after closure (time-limit study) and the status of cases closed on their own one year after closure (closed case study) are included in this document.

    The impact study is based on an experimental design with cases in five research sites (Petersburg, Prince William, Portsmouth, Lynchburg, and Wise) randomly assigned to treatment and control groups. Cases in the treatment group received services under VIP/VIEW policies. Cases in the control group received services under AFDC/JOBS policies. The impact study compares the outcomes between those assigned to the treatment group and those assigned to the control group. Key findings from the impact study include:

    • The VIEW component of VIP quickly increased employment relative to what it would have been under pre-reform policies. VIEW also led to higher earnings, but its impact on earnings was less consistent than its impact on employment rates.

    • VIEW's mixed incentives for leaving TANF led to different effects by site: TANF participation and benefits were lower in Petersburg, but there were no impacts in the other VIEW sites. VIEW's time limit and work requirement provide incentives for clients to close their cases, but VIEW's generous earnings disregard provides incentives to stay on TANF.

    • The VIP eligibility reforms in themselves did not affect employment, earnings, or TANF receipt in the first nine quarters. The finding is not surprising, because the goals of the eligibility reforms were primarily to affect other outcomes (such as birth rates and receipt of child support).

    TANF cases that enroll in VIEW have a 24-month time limit for receipt of TANF benefits. The time limit study assesses the status of TANF cases six months after they reached their 24-month time limit. Key findings from the time limit study are that:

    • In the six months after reaching the time limit, most parents worked, and many worked steadily, but primarily in lower-wage jobs.

    • There is almost no evidence of major deprivation, such as homelessness or children being sent to live elsewhere.

    • On average, despite the loss of the TANF benefit when the case closed, incomes were the same before the case closed and about six months later.

    • TANF recipients who reached the time limit were likely to be older, to have more children, and to have been on TANF longer than other VIEW cases.

    In addition to these studies funded by federal evaluation dollars, the Department contracted with Virginia Tech and MPR to conduct a study of closed TANF cases to explore the dynamics of cases that left before reaching their 24-month time limit. The full executive summary of this report is also included below. Findings from the TANF closed case study show that, similar to the Time-Limit cases, former TANF recipients have accepted responsibility for their lives and their families. Key findings are that:

    • Most cases closed because the client found a job or decided she or he could do without TANF.

    • Eighty-five percent had worked at some time since their case closed.

    • Fifty-five percent worked steadily in the year after leaving TANF.

    • On average, those working earned $1,067 a month.

    • Average household incomes increased by 40 percent after leaving TANF.

    • Most children received child care from a single provider and spent an average of 27 hours a week in child care.

    • More than 80 percent of the former clients have health insurance coverage, most often through Medicaid.

    To further understand what happened to closed TANF cases, VOSS research and staff in collaboration with Dr. Carole Kuhns and Ms. Barbara Guglielmo from Virginia Tech analyzed the difference between selected findings of the time limit and closed case studies. Key similarities include: that most (over 85%) had worked at some time since their case closed; about one-third received child support; and most were more likely to rely on family and friends than community services when they needed help. Key differences show that time limit cases tend to be families with two or more children and the children are somewhat older than in other closed case families. Time Limit cases also tend to be somewhat more dependent on Food Stamps. On the other hand, the other closed cases are more likely to demonstrate their independence by working full-time, earning higher average wages, receiving higher average child support payments and more frequently asking for help from family, friend, and non-benefit program community resources.

    Outcome Measures. House Bill 2001, required that outcome measures be defined and reported on annually. These outcome measures cover sanctions, employment and earnings, and supportive services, as well as TANF participation. Key findings are that: relatively few cases receive eligibility sanctions; VIEW participants have achieved high rates of employment; and high percentages of families stay off TANF following diversionary assistance or after leaving TANF with employment. Each of the outcome measures is defined and reported in the VIP/VIEW Outcome Measures section of this report. Appendix B includes tables showing the full locality specific detail for these outcome measures for SFY 99.

    Looking Forward. The last section of this report, Looking Forward: The Virginia Independence Program, reflects on plans for Welfare Reform Phase II, including welfare-to-work and efforts to address hard-la-serve issues.
    (*1) "Implementation of Welfare Reform in Virginia: A Work in Progress" (L. Pavetti, N. Wemmerus, and A. Johnson, Mathematica Policy Research Inc., November 1998)