How Goes CalWORKs?

In response to the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (PRWORA), California created the California Work Opportunity and Responsibility to Kids (CalWORKs) program—a "work first" program that provides support services to help recipients move from welfare to work and toward self-sufficiency. To encourage prompt transitions to work and self-sufficiency, CalWORKs also imposes lifetime limits on receipt of cash assistance by adults. Finally, CalWORKs devolves much of the responsibility and authority for implementation to California's 58 counties, increasing counties' flexibility and financial accountability in designing their welfare programs.

The California Department of Social Services contracted with RAND for an independent evaluation of CalWORKs to assess both policy implementation and its impact at both the state and county levels.

In conducting the initial process analysis, which focused on CalWORKs implementation through early December 1998, we found four emerging issues.

Organizations Have Changed in Response to CalWORKs' Expanded Mission, Despite Limited Time for Planning

Implementing CalWORKs entails a profound change in organizational mission. While counties still have the mission of verifying eligibility, they also need to verify school attendance, immunization, and living arrangements for minors. Most critically, counties now must strive to move almost all their caseload toward work and self-sufficiency. This entails arranging a broader range of services for recipients, often requiring intensive case management. It also requires performing assessments and appraisals to match services to the needs of each recipient and implementing a sanctioning process to deal with noncompliance. Finally, the counties' expanded mission creates a new "client" group—employers who may hire CalWORKs participants.

The counties are moving forward with programs to address the key implementation requirements. However, because of the timing of the passage of the CalWORKs legislation, the counties had to implement these programs with little time for reviewing best practices, creating manuals, training staff, or pilot-testing programs. In addition, the management structures, quality-assurance systems, exception-handling policies, and data-collection systems—all of which would ideally have been in place before implementation—were often not fully developed.

Implementation Is Under Way, but Recipient Compliance Is Low

The CalWORKs legislation mandated that counties follow a sequence of activities in implementing their welfare-to-work (WTW) programs. Not surprisingly, the earlier steps—enrollment and job club/job search—are more fully implemented, while the later activities—assessment, work activities, and community service—are often just being planned or have barely begun.

Many counties claim great success with job club: Of those who participate in job club, job placement rates appear to be quite high, often between 60 and 85 percent. However, these estimates refer to "those who participate," which turns out to be a small fraction of those assigned to job club (often a third or less).

Most counties are still developing their sanction programs, although they are concerned that, even when sanctions are imposed, they will be ineffective. First, sanctions are not large: To protect children, the state limited the sanction to the adult portion of the grant rather than the full grant. Second, sanctions are not swift: Counties can be slow to impose them, and even counties that are swift to sanction lack fully effective computer systems, further delaying when sanctions are sent out. Third, sanctions are not sure: They may be waived for "good cause," and some counties use a broad definition of "good cause."

Counties Currently Have Sufficient Funds, but This May Change

As the counties roll out their programs, per-case funds for WTW activities and other support services are significantly higher than in the immediate prereform years. The higher level of funding results from many factors, including the shift from separate funding streams to a single Temporary Assistance to Needy Families block grant, the addition of other welfare-related funding streams, the decline in caseloads, and the existence of carryover funding. Together, per-case funding has increased by 10 percent, with carryover funding adding another 10 percent.

However, a series of factors will determine whether such high levels of funding will continue. So far, the counties have focused on relatively inexpensive enrollment and job search activities; funding the later work and support services activities is likely to be more expensive, and the demand for expensive services is likely to grow. Of course, caseloads could continue to decline, which would further increase per-case funds.

Alternatively, a worsening economy could drive caseloads up and decrease funds per case. Moreover, available funding will shrink once carryover funds are expended. Finally, changes in funding level are also possible, with funds being reallocated away from welfare populations.

Given this uncertainty, counties are taking approaches to implementation that vary in their level of caution. While some are allocating funds for a "rainy day," others are considering significant expansions of their mission and activities.

Achieving Earnings Needed for Self-Sufficiency Before Time Limits Expire Is a Challenge

The CalWORKs legislation clearly implies a "work first" approach. The slogan in several counties is "A Job; a Better Job; a Career," where a career refers to a job providing enough income so the family is no longer eligible for cash assistance. Under CalWORKs, it clearly pays for recipients to work, as is shown by the figure. For a family of three, work pays. Those not working receive a package of CalWORKs and other transfers that amounts to total monthly household resources of less than $722 per month, well below the official poverty line. However, even minimal earnings—half-time at the minimum wage ($5.75 per hour for total monthly earnings of about $500)—will lift a family of three about 12 percent above the poverty line, when those earnings are combined with the CalWORKs benefit, food stamps, and the Earned Income Tax Credit.

A full-time minimum-wage job pays even better. As shown in the figure, full-time employment at the minimum wage yields total monthly household resources of $1,449—38 percent above the poverty line. At this point, the package of benefits relies almost equally on the CalWORKs grant and the other transfers.

While moving recipients to this level would lift them out of poverty, the stated goal of CalWORKs is to move them off aid altogether—to self-sufficiency—through employment. What kind of a job does this require? The figure shows that a family of three will need a full-time job paying $8.26 to be ineligible for cash assistance.

Getting current recipients jobs with sufficient hours, with high enough wages, and within the time limits will prove challenging.

While it is too early in the implementation of CalWORKs and in our evaluation of it to reach definitive conclusions, these four issues are being used as a guide for the follow-on fieldwork and quantitative analysis being conducted over the remaining two and a half years of the evaluation.