Bridging Disciplinary Boundaries (January 11 - 14, 2007)

Purpose: The Personal Responsibility and Work Opportunity Reconciliation Act (PRWORA) of 1996 clearly limited training opportunities for one of the least educated and skilled populations in the nation—women on welfare. In the reauthorized welfare reform, the federal government placed even greater barriers to training, assuming that women on welfare do not benefit much from training. Within this policy background, this study examined the following research questions: (1) who among those on welfare are likely to receive training? (2) does training help them obtain employment? (3) does training increase their individual (not counting income from welfare and families/friends) incomes?

Methods: Using the Survey of Income and Program Participation (SIPP) of 2001, this study chose 674 women who received cash incomes from Temporary Assistance to Needy Families (TANF). The dependent variables were receipt of training, employment, and individual income for each of the three research questions. The independent variables included demographic and human capital variables. A logistic regression analysis was performed to determine whether and how much the demographic and the human capital variables affected a welfare woman's likelihood of receiving job training. Another logistic regression analysis was conducted to investigate whether or not and how much having received training in the past helped welfare women obtain employment at paid jobs while controlling for all other demographic and human capital variables. Finally, an Ordinary Least Squared (OLS) regression analysis was done to observe how much more individual incomes those women who had received training and were working had, compared to their counterparts who had not received training and working. This was observed by testing the significance of a multiplicative term between current employment and training receipt in the OLS regression model.

Findings: Out of 674 sample women, approximately 20% had received any type of job training in the past 10 years. The study found that the odds of these women's gaining employment was almost 15 times higher when they received job training and that when they were working, their individual incomes were 72% higher if they had received job training. Findings of this study indicated that investment in the skills of this group could be translated into higher productivity and economic well-being even among women on welfare.

Implications: Findings of this study question the validity of placing more barriers to job training for women on welfare as the federal government recently did in reauthorizing welfare reform. The federal government should have at least allowed states to waive ‘work-first' requirements for some of welfare recipients at their discretion. For these individuals, on-the-job training or vocational training should have been made available to increase their skills and to prepare them for better-paying jobs. In addition, these individuals should be given more time to pursue training both before and after securing employment. In sum, this study indicates that human capital building can be an effective way to improve employment outcomes and earning potentials of the poor.