MFIP Briefing

1
MFIP Briefing
For members of the Transitioning Minnesotans
from Welfare to Work Committee Governors
Workforce Development Council April 12, 2005
2
BackgroundThe AFDC Program

• Enacted in 1935 (Aid to Dependent Children)
• Intended to provide for needs of poor children in
  single-parent households.
• Mostly used by white widows

3
The AFDC Program

• Developments that promoted popular discontent
  with AFDC
• Rise in divorce and single parenting
• Rise in number of women of color receiving
  welfare
• Rising number of women in workforce, gradual
  change in expectation of work
• Growth of caseloads during 1960s and early 1970s
• Group of participants using welfare for long time
  periods

4
Federal Reform during the 1980s

• Emphasized that parents should be the primary
  supporters of their children
• Work incentives and assistance to welfare
  participants to find employment
• California GAIN and Massachusetts ET Choices
• Greater enforcement of child support
• Culminated in the Family Support Act of 1988
• Job Opportunities and Basic Skills (JOBS) program
• Called STRIDE in Minnesota

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Federal Reform during the 1980s

• More on STRIDE
• Mostly voluntary
• Based on a human capital approach emphasizing
  education and training

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The MFIP Field Trials

• 1994-1998 -- before federal welfare reform
• Financial incentives to work (earnings disregard)
  and eligible until income reached 140 of poverty
  line
• Mandatory participation for long-term recipients
  in employment and training activities
• Simplified rules and procedures -- consolidated
  grant with cashed out food stamps

7
The MFIP Field Trials

• Conducted in eight counties
• Experimental research design
• Control group received traditional AFDC

8
Results of the MFIP Field Trials More
employment, more income

• For single-parent long-term recipients on MFIP
  (compared to AFDC)
• Employment increased 35 percent
• Earnings increased 23 percent
• More employed in stable, full-time jobs
• Higher incomes, reduced poverty

9
Results of the MFIP Field Trials More safe and
stable families

• For single-parent long-term recipients on MFIP
  (compared to AFDC)
• More likely to be married at three-year follow-up
• Less likely to report domestic abuse

10
Results of the MFIP Field Trials More child
well-being

• For single-parent long-term recipients on MFIP
  (compared to AFDC)
• Fewer children with problem behavior (attributed
  to the increased money available in MFIP
  families)
• Children did better in school
• Child care arrangements more stable, and more
  likely to be formal

11
Federal Welfare Reform

• Personal Responsibility and Work Opportunity
  Reconciliation Act (PRWORA)
• Creates block grant program (TANF)
• State participation standards for work-related
  activities
• Philosophical shift from viewing public
  assistance as a long-term self-sufficiency
  solution to viewing public assistance as
  temporary aid necessary until the family regains
  self-sufficiency through employment

12
The Ideological Debate on Work and Training

• Labor force attachment vs. Human capital
  investment
• Minnesota has experimented across the spectrum
  (STRIDE to WorkFirst model)
• Statewide program has stronger labor force
  attachment emphasis than pilot
• Short term vs. longer term results
• Portland evaluation emphasized finding good jobs,
  not just any job, case management, small worker
  case loads

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Statewide MFIP began January 1998

• Basic structure of the program remained the same
• Statewide changes largely a response to federal
  changes (TANF)
• MFIP has three official goals
• Encourage and enable all families to find
  employment
• Help families increase their income and move out
  of poverty
• Prevent long-term dependence on welfare as a
  primary source of family income

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More on Statewide MFIP

• Role of DHS vs. county
• Policy making vs. implementation
• County agencies contract with Employment Services
  providers, Workforce Centers and community-based
  organizations.

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Changes in statewide MFIP Less time, less cash

• 60-month time limit
• Reduced exit level to 120 of poverty line
  (reduced again to 115 in 2003)
• Food portion no longer cashed out

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Changes in statewide MFIP More work required
sooner

• Mandatory participation for all participants
• Federal performance measure, TANF Work
  Participation Rate
• Work first emphasis, with some limited
  opportunities for education and training
• Fewer categories of participants exempt from
  participation
• All exemptions ended by 2003 Legislature

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MFIP Financial Incentives
Monthly income based on family of three
1,753
1,661
2000 Federal Poverty Line 1,179
1,328
801
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MFIP Caseload Dynamics

• Number of MFIP cases in July 1998
• 34,125
• Number of MFIP cases in July 2001
• 34,468
• Percent of cases active in July 1998 that had
  left MFIP as of June 2001
• 65
• The caseload is constantly churning

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Major MFIP Employment Services Changes Since 2003

• 100 Sanction
• 20 hour per week requirement for participants in
  training
• Diversionary Work Program
• Elimination of employment services exemptions
• Universal Participation
• Assessments

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Changes to funding for MFIP Employment Services

• 1998
• MFIP Employment Services funding stream to
  counties via formula
• Federal Welfare-to-Work funding to Workforce
  Services Areas via formula
• Federal Welfare-to-Work funding available via
  competitive grant process

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Changes to funding for MFIP Employment Services,
continued

• 2000
• Local Intervention Grants for Self-Sufficiency
  (LIGSS) to counties via formula and competitive
  grants
• 2003
• Creation of MFIP Consolidated Fund to counties
  via formula

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Seven years of welfare reform in Minnesota
Weighing the results

• By Lynda McDonnell
• Sponsored by the University of Minnesota Center
  for Urban and Regional Affairs Center for
  Advanced Studies in Child Welfare, School of
  Social Work
• In partnership with the Welfare Reform Research
  and Evaluation Roundtable
• With generous support from The Minneapolis
  Foundation

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7 in 10 working or off welfare after 3 years

• Percent of clients working 30 hours/week or
  exiting MFIP
• 51 percent by 1 year
• 66 percent by 2 years
• 70 percent by 3 years

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Half out of poverty after 3 years
25
50 studies Four main findings

• The most successful families have more initial
  advantages
• Work does not always improve a familys
  well-being
• The least successful families often have multiple
  and serious disabilities
• There are significant racial disparities in
  outcomes

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The overlapping categories of MFIP participants

• Three broad categories of families on MFIP
• Categories overlap
• Percentages shown are estimates, from studies
  that have tracked participant progress over time

Families with significant health or mental
health impairments
Work-ready but low-skilled
Most successful families
20-30
25-35
40-50
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Finding 1 The most successful families have
more initial advantages
?
Most successful families
Families with significant health or mental
health impairments
Work-ready but low-skilled
20-30
25-35
40-50
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1. Most successful families Who are
they?

• Participants who are more likely to have
• More education, job skills
• Suburban or rural residence
• Reliable transportation
• Older children
• Few personal challenges

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Why are they most successful?

• Most are in low-wage jobs, but
• More likely to live with second parent
• More likely to receive child support
• Continue to rely on help with food support,
  health care, child care

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Finding 2 Work does not always improve a
familys well-being
?
Work-ready but low-skilled
Families with significant health or mental
health impairments
Most successful families
20-30
25-35
40-50
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2. Working poor families Who are they?

• Not as much education as the most successful
  group
• Not as many or as serious disabilities as the
  least successful group
• In general some work experience, but low-skilled

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Why are they still poor despite working?

• Continued financial instability
• Low wages
• Higher pay offset by higher expenses
• Health care gaps
• Hard to find and pay for housing, transportation,
  child care

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Finding 3 The least successful families often
have multiple and serious disabilities
?
Families with significant health or mental
health impairments
Most successful families
Work-ready but low-skilled
20-30
25-35
40-50
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3. Least successful families Who are they?

• Participants still on MFIP after 52 months
• 83 have at least one of
• Learning disability
• Physical disability
• Mental illness
• 91 including physical limitation or a disabled,
  ill, or incapacitated family member

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Why is it not working for them?

• Less likely to be offered jobs
• More likely to lose assistance through sanctions
• More likely to use up 60-month limit without
  gaining skills needed for work
• More likely to live in deep poverty

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Least successful families what does not work

• Financial incentives and penalties do not appear
  to make much difference
• Unless combined with intensive outreach and
  sanction resolution help
• Counties lack needed resources to identify and
  address many disabilities

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Finding 4 Disparities are pervasive for African
American and American Indian participants
?
?
?
Families with significant health or mental
health impairments
Most successful families
Work-ready but low-skilled
20-30
25-35
40-50
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What disparities do they experience?

• More disabilities
• Fewer skills
• Job, housing discrimination
• Reported lack of cultural competence in some case
  workers
• More sanctions, fewer extensions

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Five changes that have been shown to increase
success for more MFIP participants
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Changes shown to increase success

• Smaller caseloads, more intense casework
• Enough cash to address needs (crisis or
  on-going)
• Supportive relationship

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Changes shown to increase success

• Availability of work support programs
• Child care assistance
• Health insurance
• Housing subsidies
• Food support
• Earned income, working family tax credits
• Job retention support

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Changes shown to increase success

• Skill development Better pay and benefits found
  from programs with
• Skill training (hard and soft)
• Help to find jobs with potential
• Job retention and advancement help
• Help for worker and employer both
• Support to balance work, family, and training

43
Changes shown to increase success

• For least successful
• Outreach, home visits
• Assessments and needed treatment
• Transitional jobs
• Temporary, subsidized
• Intensive supervision and support
• Opportunities for incremental progress

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Where to get reports

• http//ssw.che.umn.edu/ CASCW/papers_reports.html
  
• Includes
• Full synthesis report (33 pages)
• Executive summary (4 pages)
• Annotated bibliography of the studies

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Welfare Reform Research and Evaluation Roundtable

• Public and private organizations
• Began 2003
• Synthesis project
• Sponsored by University of Minnesota
• Funded by Minneapolis Foundation
• Over 50 studies synthesized by a professional
  with expertise in poverty, business, and policy