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Mandatory Work Programs Are Costly, Have Limited Long-Term Impact

April 12, 2018 at 1:45 PM

President Trump and Republican lawmakers have argued that basing people’s eligibility for food, medical, and housing assistance on meeting rigid work requirements will set them on a path to a better future.  In his 2018 farm bill to reauthorize SNAP (formerly food stamps), for example, House Agriculture Committee Chairman Michael Conaway has proposed expensive, untested new work requirements for SNAP.  But evidence from rigorous studies conducted in the early years after President Clinton and Congress enacted welfare reform in 1996 provides a healthy dose of reality:  running work requirement programs is costly.  And even in the best-performing ones, employment gains were modest and short-lived.

The two best-performing programs, across a number of programs studied in the late 1990s, were in Riverside, California and Portland, Oregon.  In both, in the first few years, employment was modestly higher for those subject to work requirements, but by the fifth year, nearly all of the early gains were lost.  In the fifth year in Riverside, about 49 percent of participants randomly selected to participate in the program were working compared to about 45 percent of those not selected.  In Portland, some 62 percent of those selected to participate were employed compared to about 59 percent of those not selected.

Furthermore, policymakers assume that work requirements can be implemented cheaply, but the data show otherwise.  The average cost per participant for employment-related services was $3,289 in Riverside and $4,204 in Portland (in 2018 dollars).  Riverside focused more heavily on job search and job development whereas Portland used a more mixed approach, providing job search assistance and creating short-term training and education programs for in-demand jobs.  Although they emphasized different approaches, both focused on moving participants into work as quickly possible.  Even when education and training was provided, the programs often did not last more than a couple of months.

Current program spending for work and assessment activities for Temporary Assistance for Needy Families (TANF) program participants subject to work requirements suggest the costs could be even higher — the per-person costs in the median state in 2016 were $4,965 per year.  Therefore, Chairman Conaway’s proposal to subject millions of SNAP participants to stricter work requirements would cost billions of dollars a year, with little evidence that it would be effective.

Per-Participant Costs of Implementing the Most Effective Welfare-to-Work Programs  
  Riverside Portland
  1999 $ 2018 $ 1999 $ 2018 $
Orientation and appraisal 111 169 149 226
Formal assessment 6 9 n/a n/a
Job search 877 1333 468 711
Basic education 172 261 543 825
Post-secondary education 707 1075 1358 2064
Vocational training 237 360
Work experience 56 85 247 375
Total operating expenses 2,164 3,289 2,766 4,204

Note:  Total operating expenses may not equal the sum of the components due to rounding.  Costs are the average over the study period, originally reported in 1999 dollars and adjusted here for inflation.

Source:  Gayle Hamilton et al., “National Evaluation of Welfare-to-Work Strategies: How Effective Are Different Welfare-to-Work Approaches? Five-Year Adult and Child Impacts for Eleven Programs,” Manpower Demonstration Research Corporation, December 2001, http://www.mdrc.org/publication/how-effective-are-different-welfare-work-approaches, Table 13.1.


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