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TANF Issues Paper: Education and Job Training

One of the purposes of Temporary Assistance to Needy Families (TANF) cited by President Bush in announcing his proposal for the program’s reauthorization in 2002 is to help people leave public assistance for work so they can become "independent and self-sufficient." Numerous evaluations of the program’s first six years (1996-2002) show that only one of the three goals has been met so far. People have left TANF (more than 50% of the caseload), but most are not yet "independent" or "self-sufficient." Many observers feel that providing adequate education and training to people entering the labor force would make it possible for most TANF leavers to attain all three goals.

A survey by the Joyce Foundation showed that TANF leavers in seven Midwest states had jobs that paid, on average, $14,630 for a family of three. Half of them reported having difficulty paying rent and utility bills and buying food. One in ten had been evicted or become homeless.

Another study by the Economic Policies Institute showed that fewer than half of all TANF leavers had incomes above the poverty line. Their wages were so low that the Earned Income Tax Credit, which offsets the cost of Social Security taxes, actually contributes enough to household income to lift some families above the poverty line.

TANF generally favors a "work first" approach. This means that adults in assisted families are required to take any job that can be found for them, with the idea that they can receive education and training for more lucrative jobs later, after they have gained practical work experience.

Under current law, participation in education and job training activities can be counted as meeting 20 hours per week of the 30 hour work requirement for a limited part of the caseload. States may not have more than 30% of their caseload in education and training programs at one time, and participants cannot be in such a program for more than 12 months. This provision creates a hardship for people who are trying to complete college, earn Associate’s degrees or complete job training for better-paid and more stable employment (such as bookkeeping or nursing), since such programs generally require a two-year commitment. Some bills now before Congress would allow TANF recipients to have 24 months of education and training instead of the current 12, but the Administration has called for maintaining the 12 month figure and eliminating vocational education as an acceptable work activity.

According to a report by the Institute for Women’s Policy Research (IWPR), 70% of the jobs created between 1999 and 2006 will require a high level of skills, while only 10% will need minimal skills. The TANF population will require a great deal of additional education to qualify for anything other than the bottom 10% of these jobs, since nearly 80% of adult TANF recipients test at the lowest levels of literacy and two-thirds test at the 25th percentile or lower on measurements of basic skills. Seventy-one percent of TANF leavers have high school diplomas, while only 59% of those still on TANF have graduated.

The Manpower Demonstration Research Corporation (MDRC) has evaluated many welfare-to-work programs and found the greatest successes among those that combine the work-first approach with training. Even the most expensive programs have proven to be good investments because of the extent to which they increase the earning capacity of participants.

The following findings emerge from IWPR’s examination of dozens of studies over the last 15 years:

Most often "low stability" workers have neither a high school diploma nor GED, whereas half of "high stability" workers have completed these requirements and one-quarter have been to college.

High school graduation increases a working mother’s earnings by $1.60 an hour, whereas a year of work experience increases them only seven cents.

Post-secondary education has positive impacts on both earnings and job stability.

Each year of college education increases earnings by 4% to 9% a year.

A college degree is worth $3.65 more per hour (1997 collars) than a high school diploma.

The advocacy community recommends the following with regard to education and training, as Congress considers reauthorization legislation:

1. Increase the 12 month limit on vocational education to 24 months.

2. Allow participation in post-secondary education to count as meeting the work requirement.

3. Eliminate the 30% cap on the number of TANF recipients who can participate in education and training at any one time;

4. Give states the flexibility to extend the two-year and 60-month time limits for TANF eligibility for people in education and training programs who are complying with all program requirements.

May 2002

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