The Struggle to Sustain Employment: The Effectiveness of the Post-employment Services Demonstration

Publication Date: April 22, 1999


The Postemployment Services Demonstration (PESD) is the first large-scale T(demonstration program to examine the effectiveness of providing case management)services to newly employed welfare recipients as a way to promote job retention. The demonstration arose in response to the increasing focus on work in state welfare reform initiatives established under waivers to the Job Opportunities and Basic Skills Training (JOBS) program. These efforts to increase welfare recipients’ employment (either by providing direct incentives to work or by making work mandatory), combined with the general strength of the economy, have enabled many welfare recipients to find employment. It is unclear, however, whether, and for how long, welfare recipients who find jobs can keep their jobs.

Previous studies of welfare dynamics showed that many individuals who exit welfare through work return to welfare. These findings fostered the interest of the Administration for Children and Families (ACF) of the U.S. Department of Health and Human Services (DHHS) in understanding what services promote job retention. In 1993, four states were awarded grants to establish demonstration programs to provide additional case management services to newly employed welfare recipients; the programs were fashioned broadly on the approach used in Project Match. The major goals of these PESD programs were to promote job retention and to provide rapid reemployment for those who lost jobs, thereby reducing welfare dependency.

The passage of the 1996 welfare reform law, the Personal Responsibility and Work Opportunity Reconciliation Act (PRWORA), has focused further attention on job retention and the role of services in promoting job retention. PRWORA, which ended the AFDC program and awarded states block grants to help families under Temporary Assistance to Needy Families (TANF), requires most able-bodied welfare recipients to either find employment within two years of welfare receipt or lose their welfare benefits. The law also imposes a lifetime limit of five years of welfare receipt.

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