The effect of employment and training programs on entry and exit from the welfare caseload

Abstract

To policymakers, the major attraction of employment and training programs for welfare recipients is that they hold out the prospect that recipients can be moved off the rolls and to self-sufficiency in the private labor market, thereby decreasing welfare costs and caseloads. This article considers the possibility that such programs may also affect the attractiveness of welfare in the first place, either by making welfare less desirable because the work-training program is viewed by recipients as a burden, or by making it more desirable because the program is viewed favorably by potential applicants. Such responses are termed here “entry rate effects.” Some empirical estimates are presented which suggest that the magnitude of such entry rate effects on the caseload, where positive or negative, may be quite large.