These are the major conclusions of Welfare Reform in California: State and County Implementation of CalWORKs in the Second Year. The RAND study, based on field work conducted in 1999, represents the second phase of an ongoing evaluation that was mandated in the legislation creating the California Work Opportunity and Responsibility to Kids program. The project is funded by the California Department of Social Services. RAND is currently conducting fieldwork for its third and final report on CalWORKs implementation.

The RAND research team based its analysis on intensive interviews with senior officials and caseworkers in six focus counties (Alameda, Butte, Fresno, Los Angeles, Sacramento, and San Diego), site visits to 18 other counties, other interviews with state and county legislators and officials, a mail survey of CalWORKs implementation in all of California's 58 counties, information supplied by state and focus county data systems, and reviews of published material.

"The field work for this report was completed in the fall of 1999," notes economist Jacob A. Klerman, the study's director and lead author. "Since that time, the counties have continued to refine their CalWORKs programs. Significant progress has been made, but many of the issues we identified remain."

The 1996 federal welfare reform law included a five-year individual lifetime limit on receipt of cash assistance. Although the final CalWORKs legislation was not passed until August of 1997, the legislation required that counties implement their new CalWORKs programs in early 1998. This left only a few months to design and implement major changes in their programs, including adding and training new staff, hiring contractors, reprogramming computers to track the new activities, and adjusting their management strategies.

In some counties, including Los Angeles and Sacramento, serious disagreements about how to expand capacity blocked the hiring of new employees and of contractors by an additional six months or more.

"In most counties, the program -- as opposed to the preparations for it -- really didn't get underway until the spring of 1999," observes Klerman.

Given the major changes required of county welfare departments, the delayed roll-out is understandable, Klerman adds. Nevertheless, the net effect was that, while 60-month time limit clocks started to tick in January 1998, some recipients did not receive job search and other services until well into 1999. This delayed roll-out also caused large unspent welfare funds at the state and county level. Finally, the delay in reaching job club, also pushed back the date at which a work-first program such as CalWORKs would be expected to make its referrals to more intensive services. Thus, at least through the period covered by the field work (late-1999), referrals for treatment of substance abuse and mental health programs and to education and training programs were lower than expected. Preliminary evidence suggests that referral rates have risen since then.

For their part, counties reported very high no-show rates for required activities. Especially at the early activities -- orientation, appraisal, and job search -- counties reported that between a third and a half, and sometimes as many as two-thirds, of those required to attend an activity failed to do so. Overall, about a third of all recipients are formally non-compliant. Some have had their benefits cut.

The report discusses several approaches to this non-compliance problem. One approach involves more intensive casework to better inform recipients of their responsibilities and their options. As of the field work for the report, some counties were exploring home visits. Since the field work was completed more counties have adopted home visits - at varying points in the process and at varying levels of intensity.

Another approach involves a swifter and surer sanction. In many counties, non-complying recipients were given several chances to comply before the formal non-compliance process was begun. As a result, savvy clients could avoid participation requirements for many months before having their benefits cut. An alternative would be for caseworkers to begin the formal sanction process with the first non-compliance event and follow-up to the extent allowed by the CalWORKs statute.

Finally, some caseworkers and senior county management noted that the CalWORKs statute involves only a relatively small financial penalty and provides detailed due process provisions. While these statutory provisions protect recipients and their children, they also make California's sanction policy a smaller inducement to participation than the sanction policy in other states. Through 1999, the proportion of CalWORKs clients with jobs continued to rise while the caseload fell about one percent per month. "Some of the increases in employment and decreases in the caseload were due to California's robust economy in the late-1990s," Klerman concludes.

"County CalWORKs programs are now in place," he adds, "but key questions remain: To what extent can they maintain and accelerate the caseload decline? To what extent can they raise earnings and reduce poverty for those currently or recently on welfare? And, how fast can they accomplish these objectives given that many adults in California's program will reach their five-year lifetime time limits in less than two years?"

Many of these issues will be explored in the impact analysis portion of the RAND evaluation project. Researchers are currently exploring caseload outcomes under CalWORKs as well as the role of state policies, county welfare department programs, the economy and other factors. The first of two impact analysis reports is projected for release in late 2001, with the final report following about a year later.

"California's decision to assess and improve this landmark reform by commissioning a thoroughgoing evaluation of its implementation and impact was an unusually thoughtful approach to policymaking," comments RAND Executive Vice-President Michael D. Rich. "We are looking forward to working with the Department of Social Services in the next phases of the project."

Other members of RAND's CalWORKs research team include Gail L. Zellman, Tammi Chun, Nicole Humphrey, Elaine Reardon, Donna Farley, Patricia A. Ebener and Paul Steinberg.

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