Brief Summary

• In 1987 and 1988 a number of Wisconsin urban and rural counties initiated education and training programs for welfare recipients under a so-called WEJT model, which was similar to the mix of services offered under the Family Support Act of 1988. Fourteen counties were evaluated, compared to the traditional Job Service/WIN model of requiring job search and leveraging educational services through non-welfare funding sources. Nine of these counties (all small rural counties) were compared to comparable counties with no program in place during the period.

• The newly funded programs developed in Wisconsin did not appear to lift families out of poverty above what could be achieved through their own efforts or through modest job search programs coupled with use of other available programs. In one Wisconsin county (Rock), families were randomly assigned to the new welfare employment program or to the traditional job search/Job Service program. Two years after recipients were in the new program, 58 percent of families were off AFDC. For families randomly assigned to the traditional job search/Job Service program, 69 percent were off AFDC.

  Among program and non-program clients, only about one in five single parent families showed earnings above $2,500 a quarter (three month period), and only a third or less of the two-parent families had earnings above $2,500 a quarter -- a very rough measure of whether the family was still living in poverty.

• The type of econometric model prescribed by the federal terms and conditions was used to test for any impact of Wisconsin's welfare demonstration experiments after controlling for the effect of lowering unemployment rates and the six percent cut on the AFDC population and using the actual beginning date of the waivers in October 1988. Monthly AFDC caseloads for the period beginning January 1984 were used to track caseload changes and state unemployment rates, lagged by one month, were used to predict the impact of the economy on fluctuations in the total AFDC caseload during and after the implementation of the waiver experiments beginning in October 1988. Analysis controlled for the September 1987 six percent AFDC benefit reduction through the use of a dummy variable.

  The relationship between unemployment rates and caseloads was found to be direct and consistent over time. The econometric model constructed for the time period January 1984 to September 1988 predicted expected caseloads for October 1988 to December 1990 within the established norm of 5 percent for all 27 time periods, indicating that the model was very stable over the estimation and prediction periods and that the implementation of the waiver experiments and programs did not show reduced statewide AFDC caseloads.

• From June 1989 to September 1992, the U.S. Department of Health and Human Services awarded Wisconsin $148.4 million in federal waiver savings monies. The evaluation analyses of costs and savings using the methodology prescribed by the federal waivers showed substantial cost increases rather than savings. In July 1993 federal officials reported that $78.4 million of the "waiver savings" was based on the state reports of federal savings. Officials could not locate documentation for the methodology used to determine another $70 million of federal monies awarded to Wisconsin by the previous administration.

DHSS Projected Caseload Trends Used to Claim Waiver "Savings"

Factors Contributing to Lack of Overall Impact of Wisconsin Welfare Employment Programs

Large expenditures of state and federal funds for Wisconsin welfare employment programs have been shown to produce at best only modest impact and in many counties no measurable impact. The impact of these programs was diminished due to the effects of the economy which had begun a rapid improvement in spring of 1987. AFDC caseloads began declining significantly due to the improving economy well before the welfare reform waivers and most WEJT and CWEP programs went into effect. Other factors contributing to the lack of measurable impact of WEJT and CWEP programs include:

1. The failure of DHSS officials to effectively target services to cases likely to remain long term AFDC recipients resulted in training resources going to populations likely to leave AFDC regardless of intervention. Targeting goals were not clearly defined or monitored throughout the implementation of the welfare programs. State officials identified the population of single parent families where the mother had less than a twelfth grade education as a target group most likely to benefit from training. However, this group did not receive any more training than two-parent households or households with a twelfth grade education or better.

   During the four years from 1987 to 1990, Milwaukee County received only 17.9 percent of the $91.6 million spent on employment and training under WEJT, CWEP and JOBS programs, even though the county had 40 percent of the AFDC caseload and 58 percent of AFDC parents without a high school diploma. Instead of targeting financial resources and programs to the population of AFDC recipients most likely to become long-term AFDC cases, state officials developed formulas which resulted in a disproportionate amount of funds being diverted to areas of the state outside Milwaukee County.

2. Lack of adequate participant reporting mechanisms, poor monitoring of program performance, and incomplete financial records severely hampered the ability of state administrators to properly supervise the implementation of welfare employment and training initiatives. Inadequate state level administrative staffing and oversight have been detailed by internal DHSS evaluators and federal and state auditors. While the Department's budgeted funds for welfare employment programs were increased from $12 million in 1986-87 to $64 million for 1990-91, program expenditures were well below the funding levels, as evidenced by estimated surpluses of $20.8 million for programs in 1987-88, $36.9 million in 1988-89 and $25.3 million in 1989-90.

3. The state legislature's prescribed workfare model for WEJT and CWEP programs was not adhered to by state and county officials. This resulted in the development of a service delivery plan similar to the WIN/WEOP job search model with enhanced services. Consequently, when the performance of WEJT and CWEP programs was compared to the existing WIN/WEOP model program operated by state Job Service, measurable impact was diminished.