Welfare caseloads have declined dramatically since 1996, assisted in part by a strong economy. However, many families have not made the transition to stable employment. As welfare reform reauthorization approaches, there has been an increasing discussion about welfare recipients who experience a variety of personal barriers to employment, or what have been characterized as hard-to-employ (HtE) populations (Brown, 2001). Studies have shown that a large proportion of recipients have physical and behavioral health barriers and that a greater number of barriers is associated with lower rates of employment (Chandler & Meisel, 2000; Danziger et al., 2000). States have begun to experiment with more intensive service programs to assist HtE recipients than the typical "work first" approach that emphasizes rapid labor force attachment (Brown, 2001).
Many of the families remaining on welfare caseloads face significant barriers to employability. Among the most significant of these is substance abuse. States are struggling to develop innovative strategies to effectively address substance abuse in the context of welfare reform. Some states have attempted to integrate substance abuse treatment into their welfare employment programs, yet rates of entry and retention in substance abuse treatment continue to be low. Studies have consistently demonstrated that those receiving substance abuse treatment have better employment outcomes (Nakashian & Moore, 2000), but it is necessary for clients to remain in treatment in order to achieve these effects (Wickizer et al, in press).