Performance Standards for the Food Stamp

Employment and Training Program

February 1992

OTA-ITE-526

NTIS order #PB92-157932
Recommended Citation:

U.S. Congress, Office of Technology Assessment, Performance Standards for the Food

Stamp Employment and Training Program, OTA-ITE-526 (Washington, DC: U.S. Government Printing Office, February 1992).

For sale by the U.S. Government Printing Office

Superintendent of Documents, Mall Stop: SSOP, Washington, DC 20402-9328

ISBN 0-16 -036121-4
Foreword

The Food Stamp Employment and Training Program (FSET) was designed to reduce food stamp

outlays by increasing the employment and earnings of able-bodied food stamp recipients. The States

operate FSET with funding and guidance from the Food and Nutrition Service (FNS) of the U.S.

Department of Agriculture.

To hold the States accountable for their implementation of FSET, Congress directed FNS to develop

performance standards in the Hunger Prevention Act of 1988 (P.L. 100-435). The law directs FNS to

develop standards based on outcomes, such as job placements, and to offer the States financial rewards

and sanctions, based on their attainment of these standards.

As required by the Hunger Prevention Act, FNS proposed its performance standards for FSET on

August 30, 1991. This report, Performance Standards for the Food Stamp Employment and Training

Program, was also mandated in the Hunger Prevention Act. As required by the act, this report describes

OTA’s model performance standards and compares OTA’s model standards to those proposed by FNS.

However, measuring the effectiveness of FSET, or any employment and training program, requires

that a distinction be made between outcomes and impacts. Although employment is the desired outcome

of such programs, many welfare recipients find employment on their own. Studies using an experimental

design show that some employment and training programs have had a significant, positive impact,

helping more welfare recipients find jobs than would have without assistance. However, a study by Abt

Associates found that FSET had no impact on the earnings of food stamp recipients.

Because performance standards are based on outcomes, they do not show whether a program has in

fact increased employment and earnings beyond that which would have occurred without it. Thus, no

performance standards, neither those proposed by FNS nor OTA’s model standards, can measure whether

State FSET programs are having an impact. This report, then, goes beyond the original mandate and

analyzes successful employment and training programs. Based on this analysis, the report identifies

several alternative approaches to increasing the impact of FSET.

/ff~

64A# ‘ >

JOHN H. GIBBONS

Director

. . .

Ill
Reviewers—Performance Standards for the

Food Stamp Employment and Training Program

Steven Aaronson,

Chief, Adult and Youth Standards Unit

U.S. Department of Labor

Employment and Training Administration

Washington, DC

Janet Baldwin

Assistant Director for Policy Research

GED Testing Service

American Council on Education

Washington, DC

Hal Beader

Graduate School of Education

Rutgers University

Princeton, NJ

Stephen H. Bell, Senior Economist

Abt Associates

Bethesda, MD

Stephen Cameron

National Opinion Research Center

The University of Chicago

Chicago, IL

Lela J. Dyson

Employment Specialist

Policy and Program Design Department

Texas Department of Human Services

Austin, TX

Steve Carlson

Director, Office of Analysis and Evaluation

Food and Nutrition Service

U.S. Department of Agriculture

Alexandria, VA

Daniel Friedlander

Manpower Demonstration Research Corp.

New York, NY

Barbara S. Goldman

Vice President for Research

Manpower Demonstration Research Corp.

New York, NY

Gary Gortenberg

Bill Hastings

Policy Consultant

Family Independence Division

State of Indiana

Department of Public Welfare

Indianapolis, IN

Ellen Hennigan

Supervisor, Work Program Section

Food and Nutrition Service

U.S. Department of Agriculture

Alexandria, VA

Sar Levitan

Center for Social Policy Studies

Washington, DC

Larry McDowell

Administrator, Social Services

Adult Services Unit

Jefferson County Department of Social Services

Golden, CO

Mary Ellen Natale

Food and Research Action Center

Washington, DC

Russ Overby

Attorney

Legal Services of Middle Tennessee

Nashville, TN

Ron Pugsley

Chief, Program Services Branch

Division of Adult Education and Literacy

U.S. Department of Education

Washington, DC

Michael J. Puma

Vice President

Abt Associates

Bethesda, MD

Program Manager for Employment and Training

Fairfax County

Fairfax, VA

NOTE: OTA appreciates and is grateful for the valuable assistance and thoughtful critiques provided by the reviewers. The reviewers

do not, however, necessarily approve, disapprove, or endorse this report. OTA assumes full responsibility for the report and

the accuracy of its contents.

iv
OTA Project Staff—Performance Standards for the

Food Stamp Employment and Training Program

Lionel S. Johns, Assistant Director, OTA

Energy, Materials, and International Security Division

Audrey Buyrn, Manager, Industry, Technology, and Employment Program

Margaret Hilton, Project Director

Gretchen Kolsrud, Senior Associate

Contributors

Linda Roberts

Toby Rogers

Administrative Staff

Carol A. Guntow, Office Administrator

Diane D. White, Administrative Secretary

Publishing Staff

Mary Lou Higgs, Publishing Manager

Denise Felix

Christine Onrubia

Bonnie Sparks

Susan Zimmerman
Contents

Page

Section 1. Introduction and Summary ... m.. ... ... .m. ... .*. **** ... .**. .m. ..** *m*. *****.0

INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

SUMMARY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Section 2. History and Context of FSET . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Section 3. Issues in Setting Performance Standards ● *.m. ... ... ... ... .**. .. **0********..

Section 4. Comparison Between FNS’ Proposed Standards

and OTA’s Model Standards . . . . . . . . ., . . . . . . . . . . . . . . . . . . . . . . . . . . . . .....0...

CRITERIA FOR DEVELOPING STANDARDS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

FNS AND OTA STANDARDS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Participation Rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Job Placements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

. Earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Reductions in Food Stamp Dependency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Educational Improvements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Calculation of Overall Performance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Section 5. Policy Options .o. .*o. ... .*. ... ... ..o. ... ... e.. ..*. ... *.. *.. *as*.**..**.*.****

OPTION 1: MAKE FSET PARTICIPATION VOLUNTARY . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

OPTION 2: MERGE FSET INTO JTPA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1

1

1

5

7

11

11

12

12

16

18

20

21

28

31

31

32

Boxes

Box Page

A. What Is the GED? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25

B. What Kind of Education Is Most Likely To Help FSET Participants? . . . . . . . . . . . . . . . . . . . . 26

Figures

Figure Page

1. A Small, Niche Program . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2. Per Capita Expenditures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

3. Food Stamp Recipients and FSET . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

4. Subgroup Impacts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Tables

5

6

8

16

Table Page

1. Performance Measures Selected-Comparison Between FNS’ Proposed

Rule and OTA’s Model Standards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

2. Comparison of Initial National Standards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

3. Costs and Earnings, Impacts of Mandatory Employment and Training

Programs for AFDC Recipients . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

4. Job Placement Rate-Comparison Between FNS’ Proposed Rule and

OTA’s Model Standards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

5. Average Wage and Earnings-Comparison Between FNS’ Proposed Rule

and OTA’s Model Standards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

6. Assessment of Overall Performance: Comparison of FNS’ Proposed Rule

and OTA’s Model Standards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

11

12

14

17

20

29
Section 1

Introduction and Summary

INTRODUCTION

This report on proposed performance standards

for the Food Stamp Employment and Training

Program (FSET) responds to a mandate in the

Hunger Prevention Act of 1988 (Public Law 100-

435). That law directs the Secretary of Agriculture to

develop new, outcome-based performance standards

for assessing State implementation of FSET, in

consultation with the States, the Office of Technology Assessment (OTA) and other Federal agencies.

The law also directs OTA to report to Congress

within 180 days of publication of the proposed

performance standards,l outlining model performance standards for FSET and comparing those

models with the standards proposed by the Food and

Nutrition Service (FNS) of the U.S. Department of

Agriculture (USDA).

FNS published the proposed performance standards on August 30, 1991. Subsequently in the Food,

Agriculture, Conservation and Trade Act of 1991

(Public Law 102-237, signed December 13, 1991),

Congress allowed FNS to delay implementation of

final performance standards until 1 year after the

U.S. Department of Health and Human Services

(DHHS) publishes final performance standards for

its Job Opportunities and Basic Skills (JOBS)

program.

2 Since DHHS is unlikely to publish final

performance standards until 1994 or 1995,3 FNS and

Congress will have ample time to consider OTA’s

suggestions and policy options.

In preparing this report, OTA drew on a base of

knowledge developed over the past eight years,

starting with its study of retraining and reemploying

displaced workers, published in 1986.4 More recently, OTA published a major assessment of

worker training and its impacts on U.S. competitiveness. Analysis of employment and training was also

critical to OTA assessments of international competition in manufacturing and in services. Finally, OTA

staff involved in education studies provided valuable background information. As part of the study,

OTA participated in a series of meetings of an

advisory panel convened by USDA to assist in

developing the FSET performance standards. The

OTA-USDA relationship has been cordial and

cooperative.

This report has five sections:

1.

2.

3.

4.

5.

This Introduction and Summary;

History and Context of FSET;

Issues in Setting FSET Performance Standards;

Comparison Between FNS’ Proposed Standards and OTA’s Model Standards; and

Policy Options.

SUMMARY

FSET occupies a niche between two much larger

Federal employment and training programs-the

Job Training Partnership Act (JTPA) and the Job

Opportunities and Basic Skills Program (JOBS).

The goal of FSET is to reduce food stamp outlays by

increasing the employment and earnings of ablebodied food stamp recipients.

A comprehensive evaluation of first-year implementation of FSET conducted by Abt Associates,

Inc. found that the program was not meeting this

goal. OTA concurs with Abt’s conclusion that

drastic change is needed if this goal is to be met.

However, OTA finds that performance standards, by

themselves, are inadequate to accomplish such a

change. FNS has proposed two alternative models to

implement the performance standards.5 Model A is

156 Federal Register 43152 (Aug. 30, 191)

2JoBs is ~ ~ploPent ~d ~- progr~ for welf~e r~ipients, &SCUSS~ tier in section 2 Of hk report.

s~eF@y su~rt Act of 1988 fiblic Qw 1~85) directs D~S to develop pelfOrmance standards for JOBS and submit its recommendations

to Congress by October 30, 1993.

4u.s. con~ess, Offlce of ~c~olou ~=ssmen~ worker Training: competing in the NeWI ~nt~national Economy, ()~-~57 (w*@OQ

DC: U.S. GOV ernment Printing OffIce, September 1990); Making Things Better.’ Competing in Manufacturing, O’IA-ITE-443 (Washington, DC: U.S.

Government Printing Office, February 1990); International Competition in Smices: Bank% Buildings so~are~ Know-How...P OTA-~E-32$

(Springfield, VA: NTIS, July 1987); Technology and Structural Unemployment: Reemploying Displaced Adults, OTA-ITE-250 (Washi.ngto& DC: U.

S. Government Printing OffIce, February 1986)

S56 Federal Register (Aug. 30, 1991), p. 43152.

–l–
2 ● Performance Standards for the Food Stamp Employment and Training Program

similar to the approach used in JTPA and JOBS. It

requires the States to gather data on participant

outcomes, such as the percent of participants that

find jobs.6 Model B requires States to gather

information on outcomes for both FSET participants

and control groups of nonparticipants. Outcomes for

the two groups would be compared to determine

whether there was a statistically significant difference. Both models would allow FNS to distinguish

between the States and award incentive funds to

those States whose programs were most successful

in meeting national standards established by FNS.

OTA found that, although model B would provide

a much more accurate measure of the true effectiveness of each State’s FSET program, it would be

impractical to implement. OTA’s rationale is discussed further in section 3 below. OTA found that

the performance standards proposed in model A

would encourage the States to make improvements,

but would not, by themselves, create the degree of

change needed to make FSET effective in meeting

its stated goals.

OTA agrees with two of the four performance

measures proposed by FNS--job placements and

educational improvements. OTA also supports FNS’

proposal that educational improvements remain an

optional component of State FSET programs, since

there is no firm evidence that remedial education, by

itself, reduces welfare dependency and increases

earnings. However, OTA would define job placements and educational improvements somewhat

differently than FNS and would use a different

weighting scheme to encourage placements in lasting jobs and service to those who are harder to

employ.

To comply with the Hunger Prevention Act’s

direction that the performance standards “take into

account” both wages and job retention, OTA

suggests using average quarterly earnings among

those employed, rather than average hourly wages

among those employed, as a third performance

measure. OTA disagrees with FNS’ fourth measure--

food stamp case closures-because this measure

could force those who are hard to employ off food

stamps and out of FSET. Finally, both OTA and FNS

conclude that establishing performance standards

should bean ongoing process, and that the standards

should be revised based on State experience.

FNS proposes the following initial performance

standards for fiscal years 1992-94:

1.

2.

3.

4.

5.

a participation rate of 10 percent;

a job placement rate of 25 percent;

an average wage of $4.45 per hour;

a food stamp case closure rate of 20 percent;

and

educational improvements among 25 percent

of FSET participants who enroll in educational

programs.

OTA generally supports the participation standard, the job placement rate standard and the educational improvement standard. However, OTA would

not use food stamp case closures as a performance

measure, and suggests a quarterly earnings standard

that corresponds to a slightly higher average wage

rate of $5 per hour. OTA’s rationale for its support

of FNS and for its areas of disagreement is discussed

in section 4.

OTA concurs with FNS’ proposal that an adjustment model be used to vary the initial national

standards to avoid penalizing the States for factors

beyond their control, such as a very high unemployment rate or low average wages. OTA finds the

model proposed by FNS reasonable.

OTA’s analysis of FSET suggests several policies

that Congress may wish to consider. First, as noted

above, FNS’ proposed model B performance standards appear impractical to implement, but the more

feasible model A standards are unlikely to measure

the true impact of each State’s FSET program.

Because of this limitation, Congress may want to

reconsider its policy of linking State attainment of

the performance standards to financial rewards and

sanctions. More significant, however, is OTA’s

conclusion that no outcome-based performance

standards, including OTA’s own model standards,

will, by themselves, bring about the degree of

change needed to enable the program to meet its

goals. Such change might be helped by two other

policy options which would restructure FSET—

making the program voluntary and/or merging it

with JTPA.

%s model also allows FNS to adjust the standards to account for factors beyond the State’s control. For example, a State with a high unemployment

rate might be held to a lower job placement standard.
Section 1--Introduction and Summary ● 3

OTA found that mandating participation in FSET

has contributed to the program’s lack of impact.

Congress may wish to consider making FSET

voluntary. If this option is chosen, performance

standards will need strong positive incentives to

encourage the States to recruit less-employable

volunteers as well as those who are job-ready.

Another policy option that could reduce administrative overhead and increase direct provision of

employment and training services would be to

merge FSET with JTPA. Many States and localities

are already using JTPA as their primary service

provider, either through formal contracts with their

JTPA agency or through informal referrals.
Section 2

History and Context of FSET

Figure 1—A Small, Niche Program

I 1046 I

1000

800

w

400

200

0

JTPA-IIA FSET JOBS

program

Total FY 1990 Federal expenditures for three employment and

training programs.

SOURCES: U.S. General Accounting Office, Training Programs: /formation on Fisml Years 1989 and 1990 Appropriations, pp. 7,9,

11, and Congressional Budget Office, OTA, 1991.

FSET has evolved out of a 20-year effort to reduce

food stamp dependency by encouraging food stamp

recipients to work. Congress amended the Food

Stamp Act in 1970 (Public Law 91-671) to require

all able-bodied adult recipients to register for work

with their local Employment Service office, and to

accept employment if offered. During the 1970s and

early 1980s, USDA helped some States and localities operate demonstration programs involving work

experience and job search training for those food

stamp recipients who were required to register for

work (’‘work registrants’ ‘). In the Food Security Act

of 1985 (Public Law 99-198) Congress required all

States to create employment and training programs

for work registrants, and provided funding for the

new Food Stamp Employment and Training programs. These funds include both a basic grant and

additional Federal matching funds (on a dollar-fordollar basis) for States that invest their own money

in supportive services such as transportation and

child care for FSET participants.

Today, FSET occupies a niche between two,

much larger, federally funded employment and

training programs (see figure 1). The Job Opportunities and Basic Skills training program, or JOBS,7 is

targeted to mothers and unemployed fathers receiving Aid to Families with Dependent Children

(AFDC), while Title IIA of the Job Training

Partnership Act of 1982, or JTPA,8 is available on a

voluntary basis to a broad range of economically

disadvantaged adults and youth. Total fiscal year

(FY) 1990 Federal outlays for FSET (including both

basic grants to the States and Federal outlays to

match State funds) were $148 rnillion,9 compared to

$1.04 billion for JTPA Title II-A1O and $264 million

for JOBS.ll Both JOBS and FSET emerged from

welfare reform, requiring welfare recipients to either

work (in unpaid ‘‘workfare” public service jobs) or

look for work as a condition of receiving benefits.

Although the concept that welfare recipients owe a

reciprocal obligation in exchange for their benefits

has not changed, most State and local JOBS and

FSET programs now require participation in employment and training programs, rather than in

workfare.

Because FSET and JOBS are ‘‘mandatory’

programs, the States are required to enroll a large

fraction of those eligible and to sanction those who

do not enroll by reducing their welfare benefits. To

meet the required participation rate, the States

spread a total Federal budget of $148 million across

1.35 million FSET participants in FY 1990, leading

to an average of only $110 per participant.12 Federal

expenditures for JOBS averaged $692 per person

~amily fhlpport Act of 1988 (FSA), Public htW 100485.

8Public Law 97-300.

%J.S. OffIce of Management and Budget “Budget of the United States Government FY 1992,” Washington DC, February 1991, Appendix.

I?Ibid.

1lu.s. ‘1’remury estimate, reportti by Janice Pesl@ Congressionrd Budget Office, personal Communication% Sept. 19, IW1.

12~s ~~ ~it~ by J~e Isaacs, cogessio~ Budget offIce, personal communicatio~ Sept. 23, 1$)$)1. men state matching funds are included,

total spending for FY 1990 was $221 rnilliom or $164 per participant.

–5–
6 ● Performance Standardsfor the Food Stamp Employment and Training Program

that year. 13 JTPA Title II-A, which is voluntary,

enrolled 632,000 persons14 with a budget of $1.04

billion, resulting in an average expenditure of

$1,646 per participant (see figure 2).

There is little overlap between the populations

served by JOBS and FSET—most mothers of young

children are not required to, and in fact, do not,

participate in FSET Among FSET participants in

FY 1988, 74 percent lived in one- or two-person

households without children.15 However, there is a

greater overlap between the FSET and JTPA populations. Food stamp recipients are automatically

considered ‘economically disadvantaged’ and hence

eligible for free employment and training services

under JTPA.l6

JTPA’s existence does not obviate the need for

employment and training services for food stamp

recipients. Although JTPA has much more funding

than FSET, it serves only a small fraction of those

eligible for its services—2.3 percent in 1986.17

During the first half of program year 1990, 38

percent of the 632,000 JTPA Title IIA participants

received food stamps. Of these, about half were

able-bodied work registrants targeted by FSET.18

Assuming these trends held through the year, JTPA

1

1

1

1

Figure 2—Per Capita Expenditures

800

1646 I

I

JTPA-II FSET JOBS

program

Average Federal expenditure per participant for three employment

and training programs, FY 1990.

SOURCE: OTA, 1992.

served about 120,000 food stamp work registrants.

Creation of FSET with a congressional mandate to

serve up to 50 percent of those eligible has provided

employment and training services to many additional food stamp recipients—about 1.35 million in

FY 1990.19 However, as discussed below, FSET has

had little impact on the much larger group it serves.20

13~ 1990 ~a~ ~ ~wition ~w for JOBS. me Smtes were not rqu~ed to begin operating JOBS progr~sIUIM ~1991. when fll~y OptXatiO@

JOBS is projected to require an average of $1,500 to $1,700 per participant-U.S. Congressional Budget OffIce, “Work and Welfare: The FWY

Support Aet of 19g8,” Washington DC, CBO Staff Working Paper, January 1989, p. 14.

IAEst~ted Progm yea 1990 emo~en~ based on e~~ents in be first~ of tie ye~—u.s. Dep@ment of Labor, Employment ~dT-g

Administration% Office of Strategic Planning and Policy Development, “Job Training Quarterly Survey: JTPA Title IIA and III Enrolhnents and

Teruminations During the First Half of Program Year 1990 (July-December 1990),” Washingto@ DC, July 1991, p. 5.

15Mic~el J. ha, et ~., Evalmtion of the Fo~dStamP Employment and Training Program Final Report: Vozumez @ethesd~ MD: Abt Associates,

Inc., June 1990), pp. 3-33-3-34.

16swtion 4(8) of JT’PA ‘f’ifle ~a defines “monomi~ydisadv~~ged’ eligible individ~sto include individuals in fties receiving food ShlllpS.

17~s is the most recent&~ ~hich es~te p~icipation as a ~ction of ~ose leg~y eligible for J’TPA. It is from Steven H. Sandell ~dKRupp, Who Zs Served in JTPA Programs: Patterns of Participation and Intergroup Equity (Washi.ngtom DC: National Commission for Employment

Policy, 1988), p. 50.

18u.so Dep~ent of ~~r, Division of p~o~~ce M~gement ~dEv~wtio~ office of Strategic Pl-g and Policy Development “JTPA

Title IIA and III Enrollments and W ruminations During the First Half of Program Year 1990 (July-December 1990),’ unpublished doc~ent Febmw

1991, p. 29.

19’IMS toti includes 1.2 million work registrants and 150,000 vOIUnt&rs.

20~s~ proposed new p~cipation Sadad of 10 percent could reduce total national tHMOhIdS tO M low as 2407W (one-f~ tie ‘~br‘Wd

under the current 50 percent participation standard).
Section 3

Issues in Setting Performance Standards

Congress clearly desired the States to be held

accountable for their success (or failure) in operating

FSET. In the Food Security Act of 1985, Congress

not only authorized State grants beginning at $40

million in FY 1986 and growing to $75 million by

FY 1989, but also directed USDA to establish State

performance standards designating minimum percentages of mandatory participants to be enrolled in

FSET and allowing USDA to withhold funds from

any State that failed to enroll its required minimum.

21 That law specifies that the minimum percentage required of the States be no greater than 50

percent. In addition, the act required USDA to

monitor the effectiveness of State implementation of

FSET in terms of increased employment and job

retention of participants and to report back to

Congress on the program’s effectiveness.22

To implement the first part of this law, USDA

required the States to either enroll or initiate

sanctions against 35 percent of ‘non-exempt’ work

registrants in FY 1989 and 50 percent in FY 1990

and FY 1991.

As shown in figure 3, even before USDA set these

minimum percentages, in FY 1988, the States either

enrolled or sanctioned 50 percent of ‘non-exempt’

or ‘‘mandatory’ work registrants. However, the

total number enrolled or sanctioned-1.2 million—

equals only about 4 percent of the 28 million persons

who used food stamps that year. This is because the

law exempts the vast majority of food stamp

recipients from the work registration requirement,

either because they are caring for young children, are

under 17 or over 59, or already have work.23

Only 13 percent (3.7 million) of all food stamp

recipients were classed as ‘‘work registrants’ in FY

1988, and USDA allowed the States to categorically

exempt about one-third (1.2 million) of these from

FSET participation. Categorical exemptions were

allowed on the basis of geography (living in a remote

area lacking an FSET program) and for other

reasons, such as being in a household with three or

more children. The remaining 68 percent of work

registrants (2.5 million persons) were considered

‘‘mandatory’ participants, and the states enrolled or

sanctioned nearly half of these.

Since establishing a minimum participation rate,

FNS has encouraged the states to limit the total

number of both categorical and personal exemptions

to no more than 30 percent of all work registrants in

each State.24 The remaining 70 percent form the base

of ‘‘non-exempt mandatories." The States were

required to enroll 50 percent of this group in FY

1990.

To implement these participation-based performance standards FNS allocated $15 million, or 20

percent of the total $75 million in basic State grants

for fiscal years 1990 and 1991 on the basis of each

State’s attainment of the standards in previous fiscal

years.

The Hunger Prevention Act of 1988 called for

new, outcome-based performance standards, and

directed USDA to develop a proposal for modifyng

State grant levels depending on how effective the

States are at meeting these standards. Most recently,

in the Food, Agriculture, Conservation and Trade

Act of 1990 (Public Law 101-624), Congress

directed USDA to reserve $15 million of the $75

million total authorized for State grants. During

fiscal years 1992 through 1995, this $15 million is to

be allocated among the States based on their

performance, as measured by the new performance

standards called for in the Hunger Prevention Act.

The remaining $60 million is to be allocated on the

basis of the number of work registrants in each

State. 25

Although the question of how effective the States

are relative to each other is an important one, it may

21 Actual tiding for tie b~ic sate grants was $50 million in FY 1987,$60 million in FY 1988, and $75 million in FY 1989 and 1990. ~ addition

to the basic grants, USDAmatches State expenditures for transportation and child care, bringing total Federal expenditures forFY 1990 to $148 million.

~’rhe Food SeCW-@ Act of 1985 (Public Law 99-198), Title XV, Subtitle A sec. 1517.

23- et aL, op cit, footnote 15, p. 3-21.

~Rur~ Stites me wowed to exempt a much higher percent of work registrants, but most states me held to a maximum of 30 to 35 percent. SOURCE:

Ellen Heningeq Supervisor, and Nancy Theodore, Work Program Sectioq FNS, personal communication Dec. 5, 1991.

%3x. 1753.

– 7 –
8 ● Performance Standards for the Food Stamp Employment and Training Program

Figure 3-Food Stamp Recipients and FSET

Exclude 24.5 million

over 59, under 18, or

caregivers

Y

&

3.7 million work

registrants

1.2 million categorical

exemptions (e.g., rural)

&

2.5 million

mandatory FSET

1.3 million no show

or further exemption

o

1.2 million actual

FSET (enrolled or

sanctioned)

About 1 in 25 food stamp recipients participate in food stamp education and training (FSET). Most food

stamp recipients are exempted from FSET because of age, their responsibilities as caregivers, or other

circumstances such as living in a rural area with limited access to an FSET program. (It should be noted

that since “sanctioning” counts as participation, substantive participation is less.)

SOURCE: OTA, using data for FY 19SS provided by FNS.

not be as important as the question of how effective

FSET is as a national program. To answer that

question, USDA contracted with Abt Associates to

conduct a 4-year, $3.5 -million study of FSET

implementation in FY 1988, its first full year of

operation. The study found that FSET had “no

discernible effect on participants’ aggregate earnings, probability of finding work, amount of time

worked, or average wages. ”26

The authors of the Abt evaluation attributed the

low impact partly to low participation levels. They

found that about half of the “mandatory” FSET

participants were never actively involved in the

program, either because they failed to appear for

their initial assessment interview (34 percent of

those assigned to FSET), or because they met with

their caseworker and were determined exempt (15

percent of those assigned), or because they never

appeared for services after completing the assessment interview (3.5 percent of those assigned to the

program). 27 The Abt researchers also speculated

that, among those who did participate, employment

M- et al., op. cit., footnote 15, p. xi

Wbid., pp. 6-8.
Section 3--Issues in Setting Performance Standards ● 9

and training services were unnecessary for one

group and were spread too thinly across a second: the

first, which was more job-ready, would have found

jobs even without FSET; the second group, which

had more serious barriers to employment, needed

more intensive assistance to find jobs.

OTA concurs with Abt’s conclusion that drastic

change is needed if FSET is to meet its goals. These

include finding jobs for food stamp recipients,

reducing the food stamp rolls, and ‘helping individuals to achieve self-sufficiency .”28 Reaching these

goals, and measuring progress toward them, may be

difficult. The Abt study is conclusive because it used

an experimental design which allowed careful measurement of the true impact of FSET. FNS has asked

for public comment on requiring the States to use

either an experimental design (model B) or a

nonexperimental design (model A) as the basis for

performance standards.

There are many ways to study employment and

training programs. For example, implementation

studies are useful to find out whether or not a

program is operating as planned. However, to

evaluate the effectiveness of employment and training programs, a distinction must be made between

outcomes and impacts. Although job placements are

the desired outcome of such programs, they may not

represent a real impact. Many welfare recipients find

jobs, whether or not they enroll in employment

programs such as FSET. External factors (e.g., the

status of the local economy) and internal factors

(e.g., self-esteem) may affect an individual’s ability

to find a job as much or more than participation in an

employment and training program. In a recent study

of performance standards for secondary school

vocational education, OTA concluded that these

confounding factors made ‘‘labor market indicators

alone an insufficient basis for performance standards. ‘ ’29

The best way to isolate the effect of employment

and training programs from these other factors is to

randomly assign like groups of individuals to the

program and to a control group that does not

participate and then compare the employment experience of the two groups.30 The results can be

surprising. For example, over 50 percent of those

participating in FSET in FY 1988 had experienced

some employment 1 year after entering the program,

but so did a control group who did not enter FSET.31

FNS recognizes that an experimental design

would be the ideal way to assess the true impact of

each State’s FSET program. The model B alternative

would require the States to randomly assign mandatory FSET participants to treatment and control

groups.

32 The impact of FSET would be assessed

through followup interviews with participants and

controls, conducted at 6 months after random

assignment.

However, FSET is a small program with a limited

budget. Using random assignment is timeconsuming and expensive, primarily because program operators must be educated about the process

to feel comfortable with turning away individuals

who want to participate in order to form a control

group. And some program operators are opposed to

refusing services in order to create control groups.

When Abt Associates evaluated FSET, they

encountered this problem.33 Abt recruited State and

local food stamp agency (FSA) directors to participate in the study through national and regional

meetings. Both at these initial recruiting meetings

and subsequently, some FSAs refused to participate,

often because of their concerns about denying

zg~e Hunger prevention Act of 1988 (Public Law 100-435), Title IV, WC. 404, subsec. L (ii), I.

2~eS. conge~~, offIce of ~c~olog A~~essmen4 pe~omance Stan&-ds for seco&V school voea~”o~[ Education-1. ?ackgrouti Paper

(Washingto@ DC: OTA, 1989), p. 5.

~uring the late 1970s and early 1980s, the Comprehensive Employment and Training Act (CETA) was evaluated by creating an artiflcird “conlrol

group.” Social Security earnings records were merged with demographic and labor market data drawn from the sample of households surveyed each

month through the Current Population Survey to create a control group whose characteristics matched those of CBTA participants. Although this

approach is simpler than random assignmen~ the results are less reliable, because of the difilculty of matching the characteristics of participants and

controls and assuring that controls do not receive program services. Most researchers now agree that random assignment is the best way to measure the

impact of employment and trairdng programs. Sources: Burt S. Barnow, “The Impact of CETA Programs on Earnings: A Review of the Literature,”

The JournaZofHumanResources, vol. ~ (2), p. 189; Gary Burtless and Larry Orr, “Are Classical Experiments Needed for Manpower Policy?” The

Journal of Human Resources, vol. 21, No. 4, fall 1986, pp. 606-639; Robert LaLonde and Rebecca Maynard, “How Precise Are Evaluations of

Employment and Training Programs,’ Evaluation Review, vol. 11, No. 4, August 1987, pp. 428-451.

31- et al., op. cit., footnote 15, p. A.

3256 Federal Register 43164 (Aug. 30, 1991).

33- et al., op. cit., footnote 15, pp. 4-9-4-15.
10 ● Performance Standardsfor the Food Stamp Employment and Training Program

services to individuals assigned to the control group.

Those FSAs that agreed to participate required

extensive technical assistance: Abt staff conducted

two rounds of site visits to each, wrote technical

assistance manuals, hired on-site data collectors, and

conducted staff training in order to assure that the

random assignment and initial data collection on

controls and participants went smoothly. Four years

and $3.5 million were required to complete the

study.

Similar problems could be expected if the States

were required to use model B as the basis for their

performance standards. The extra staff time and

expense would be a burden on Federal and State

FSET administrators, who already lack the funding

needed to provide effective employment and training services.

FNS estimates the total paperwork burden on the

States at 272,567 hours for model B, as opposed to

only 187,859 hours under model A. However, this

estimate specifically excludes the time needed for

computer programming and operation and “the

development and execution of the sampling and

random assignment methodologies. ’ ’34 FNS anticipates that each State would have to assign a full-time

person to oversee the random assignment process,

and that, “ideally’ each locality would also assign

one person to coordinate random assignment decisions and oversee data collection.35 Assumin g that

only the State-level staffing was required, this would

add approximately 115,000 hours to the paperwork

burden in model B, for a total of 387,567 hours.36

In addition to its high costs, use of control groups

is impractical as long as FSET is, at least in theory,

a mandatory program. For example, most work

registrants in Los Angeles County are males who

receive both State-funded General Assistance and

food stamps. In return for these benefits, the State

requires them to work in unpaid public service jobs.

All are expected to perform this service, and

sanctions are quickly applied to those who refuse.

For this food stamp agency, assigning every other

work registrant to a control group which would not

be required to perform workfare would be out of the

question.

OTA concludes that use of an experimental

design to implement national performance standards

is not feasible.37 However, without random assignment, any performance standards will be imperfect

indicators of the impact of the State programs.

Because performance standards measure only outcomes and not the impacts of State programs, they

provide a poor basis for financial rewards and

sanctions. Based on its conclusion that model B is

impractical, OTA’s discussion of FNS’ proposed

standards in section 4 focuses on model A.

In addition to their limitations as measures of

program effectiveness, nonexperimental performance standards may have unintended consequences.

For example, JTPA’s former performance standards,

which emphasized maximizing job placements while

minimizing costs, encouraged some local program

operators to focus on the most job-ready participants, while providing minimal or no service to

welfare recipients and others who were less employable.38

Recognizing these problems with performance

standards, OTA has identified other policy options,

which, if implemented, might enhance the effectiveness of FSET. These are discussed in section 5.

Finally, OTA suggests that FNS conduct another

comprehensive evaluation, perhaps in FY 1995, to

determine whether the proposed policies and performance standards, if implemented, are having the

desired effect.

~56 Federal Register 43153 (Aug. 30, 1991).

3556 Federal Register 43164 (Aug. 30, 1991).

36Abt wed ~n.site &~ collectors ~ site coordinato~ at 24 of he 53 local o&Iws involved in their Mtiond FSET evaluation study Abt Associates,

op. cit., footnote 15, p. 4-15. When Manpower Demonstration Research Corp. (MDRC) used random assignment to evaluate the impact of State

welfare-to-workprograms, it found that it needed at least one or two full-time staff people to collect and analyze the data fmmeachlocal office. However,

the Abt and MDRC were extensive, one-time studies. It is possible that fewer staff would be required if random assignment was used by FSET on an

ongoing basis. Barbara Goldmaq Director of Researcb MDRC, personal communication April 1991.

sTOTArea~h~ a swconclusion fi its @ysis of pe~omace stan~ds for secon~ school vocational education. OTA, 1989, Op. Cit., fOOtllOte

28, p. 5.

38~~e~e p. Dickemon, et & JTPA pe~o~n~e Standards: Effects on Clients, Semices and Costs (washingto~ DC: National COmlrl&SiOn fOr

Employment Policy, 1988), p. 194.
Section 4

Comparison Between FNS' Proposed Standards

and OTA's Model Standards

OTA and FNS are in substantial agreement on

many aspects of setting performance standards. For

example, like FNS, OTA considered a set of

overarching goals, or criteria, for establishing its

standards. OTA agrees with FNS that, as long as

FSET is mandatory, there must be a minimum

participation standard. OTA further supports FNS’

proposal that the minimum participation rate be

greatly reduced—horn 50 to 10 percent-in order to

allow more intensive application of employment and

training services to a smaller number of people.

OTA also agrees with FNS’ selection of two

outcome-based performance measures--entered employment rate and educational improvements. However, OTA suggests using quarterly earnings of

participants, rather than hourly wages, as one

outcome-based measure. And, OTA disagrees with

one measure proposed by FNS--the percentage of

households that no longer receive food stamps.

OTA supports FNS’ approach of setting an initial

national standard as a benchmark, with future

revisions to the standards as more data become

available. OTA also agrees with two of the initial

benchmarks proposed by FNS (see tables 1 and 2).

However, there are a few areas of disagreement in

addition to those noted above. These include the

priority of service, some of the weights, and some of

the initial benchmarks. Finally, as discussed in

section 5, Congress and FNS may want to make

some more fundamental changes to FSET.

CRITERIA FOR

DEVELOPING STANDARDS

In developing their proposed standards, both FNS

and OTA examined legislation to assess what

Congress wanted from the new performance standards. Based on its analysis of the Hunger Prevention

Act of 1988, FNS identified three goals, or “design

Table l—Performance Measures Selected-Comparison

Between FNS’ Proposed Rule and OTA’s Model Standards

Measures considered FNS OTA

1.

2.

3.

4.

5.

Participation rate Yes

Entered employment Yes

Average wage Yes

Reductions in food

stamp dependency Yes

Educational

Job

Hard to employ (HTE)

improvements Yes (optional)

Definition of terms

Terminee (FNS) Those who are assigned to

Participant (OTA) FSET, and either complete

the program or drop out,

excluding those who do not

appear for their first activity

Must involve 20 or more

hours per week of

unsubsidized employment

and be expected to

last at least 30 days

Participant who lacks a

high school diploma/GED

and has not worked in the

prior year

Yes--FSET is “mandatory”

Yes--legislative goal

Use earnings instead

No-may have unintended

consequences

Yes (optional--difficult to define

Same

Same

Same

SOURCE: OTA, 1992.

316-637 0 - 92 - 2 QL: 3 –11–
12 ● Performance Standardsfor the Food Stamp Employment and Training Program

Table 2—Comparison of Initial National Standards

Measure FNS OTA

Participation

rate. . . . . . . . . . .

Job placement

rate. . . . . . . . . . .

Average wage. . . . .

Quarterly

earnings. . . . . . . .

Food stamp case

closures. . . . . . . .

Educational

improvements. . .

10 percent

25 percent

of terminees

$4.45/hour

20 percent of

terminees

25 percent

of those who

start educational

programs

Agrees—target more

intensive services on

a smaller group

Agrees-based on

FNS analysis of what

is readily achievable

-$1,395

Would not use this

measure

Agrees-little data

to set a standard

SOURCE: OTA, 1992.

issues.” These goals are: 1) greater State flexibility,

to accommodate the act’s call for greater services to

participants with greater barriers to employment and

for more emphasis on educational improvement; 2)

establishing priority of service, with hard-to-employ

mandatory participants receiving first priority, mandatory participants second priority, and volunteers

third priority; and 3) making use of existing data on

FSET and its participants, specifically the Abt

evaluation.39

OTA derived four criteria from its analysis of

congressional intent. First, OTA suggests that setting and implementing performance standards be

viewed as an ongoing process, rather than a one-time

activity. Congress recognized that modifications

would be needed as State experience in operating

FSET grew, and called for such modifications in

both the Food Security Act and the Hunger Prevention Act. In addition, OTA supports FNS’ proposal

that ongoing modifications be used to encourage the

States to continually improve on their previous

performance.

Second, OTA suggests that the performance

standards be aimed at the goal, stated in the Hunger

Prevention Act, of helping food stamp recipients

achieve self-sufficiency. Third, the standards would

ideally be set to allow maximum State flexibility,

reflecting the Food Security Act which directs the

States to implement a program, “designed by the

State,” and including one or more of a list of five

components. 40 OTA's fourth criterion is that the

model standards should encourage service to individuals who have greater barriers to employment, as

required by the Hunger Prevention Act.

FNS AND OTA STANDARDS

Based on the criteria just outlined, OTA agrees

with three of the five performance measures proposed by FNS. First, although it is not an outcomebased measure, OTA supports FNS’ decision to

continue to measure State participation rates, and to

require a minimal level of participation. OTA also

supports FNS’ selection of two other outcome-based

measures:

. job placements; and

● educational improvements.

However, OTA proposes to measure earnings,

rather than wages, and OTA disagrees with FNS’

proposal for measuring reductions in food stamp

dependency. The rationale is discussed below, along

with a proposed standard for each measure and a

method of calculating overall State performance.

Participation Rate

On average, the States are meeting the current

participation rate requirements. For example, in FY

1989, when the required rate was 35 percent, the

States either enrolled or initiated sanctions against

approximately 47 percent of non-exempt mandatory

work registrants, or 1.2 million persons.41 However,

given the Abt evaluation showing that broad distribution of very inexpensive employment and training

3956 Federal Register, 43157 (Aug. 30, 1991).

4oJ0b ~em~job~~~~h~~g;~orkfme;work experience; ~ppofied work. T& Hunger Revention Act of 1$)88 added a Sixth COmponent+ducationrd programs.

41- et ~,, op. cit., fOOtnOte 15$ P. 3-26”
Section 4--Comparison Between FNS' Proposed Standards and OTA’s Model Standards . 13

services 42 to a large fraction of work registrants had

no impact, OTA supports FNS’ proposal to lower the

required participation rate standard to 10 percent. As

discussed below, OTA uses a different definition of

“participant” than that proposed by FNS.

When reauthorizing funds for FSET in 1990,

Congress limited the basic State grant total to $75

million for FY 1991-95. With this funding cap, only

a lower participation rate will allow the States to

provide more intensive employment and training

services. To ensure that this smaller group (10

percent) of FSET participants includes those “with

greater barriers to employment” (defined by FNS

and OTA as those who lack a high school diploma

and who had no work experience in the year prior to

entering FSET), OTA agrees with FNS’ proposal to

give extra credit in calculating some of the measures

for those participants who fall into this category .43

In addition to Abt’s findings that FSET spreads

low-cost services too widely, research by the Manpower Demonstration Research Corp. (MDRC)

suggests that programs that include at least some

intensive education and training services have a

greater impact on participants’ employment and

earnings. The programs that were closest to FSET in

goals were the Work Incentive (WIN) Demonstration programs aimed at AFDC recipients and operated by the States with Federal assistance under the

Omnibus Budget Reconciliation Act of 1981 (Public

Law 97-35).

The WIN demonstrations served a different clientele from that served by FSET. WIN participants

were overwhelmingly single mothers while FSET

participants in FY 1988 were half male and predominantly childless.44 Because of this difference, care

must be taken in using research on the WIN

programs to draw conclusions about ways to improve FSET. Nevertheless, there are striking similarities. The WIN programs resembled FSET in that

most were relatively simple, low-cost programs

emphasizing job search rather than extensive remePhoto credit: U.S. Department of Agriculture

A job search training class operated by the Wilmington,

Delaware FSET program in 1988. Funding limits and a high

participation standard meant that, nationally, less

than one-third of FSET participants received

such training in FY 1988.

diation or occupational training and in the fact that

they were mandatory. As in FSET, the welfare

agencies operating the WIN programs tried to enroll

a large fraction of mandatory participants; however,

another similarity with FSET was that the welfare

agencies implementing the programs were reluctant

to sanction those who failed to enroll or subsequently dropped out, and only about half of the

‘‘mandatory’ participants ever actually participated

for even a brief time..45

Despite these similarities, FSET had no discernible impact in 1988, while five of seven WIN

programs that MDRC evaluated using an experimental design yielded statistically significant gains

in earnings for participants. 46 The average earnings

among the experiment groups in the WIN programs

ranged from 10 to 30 percent more than the earnings

of the control groups by the third year after program

entry .47 There are two key differences between WIN

and FSET that may account for this. First, although

low in cost, the WIN programs were more expensive

(ranging from under $200 per participant in Cook

42Just overhlfof RN3’T clients were assigned to individual job seareh 27 percent to job se=ch training, 6 percent to work experience, and 16 percent

to educational services in FY 1988. w et al., op. cit., footnote 15, p. 6-16.

43~s proposes @v~g exha cr~it o~y in the job p~cement and wage measures. OTA suggests giving exm Crdit not o~Y in ~e~ two m~~s~

but also in the educational improvement measure. This is discussed further below.

44- et ~., op. cit., fOOtnOte 15, P. 3-30.

45Judith M. Gueron, “Work and Welfare: Lessons on hnployment fiogrms, ” Journal of Econom”c Perspectives, vol. 4, No. 1, winter 1990, p. 90.

‘Ibid., p. 87.

d7~e exceptions were west v~~a, a s~~ ~~ exceptio~y hi@ ~~ploma~ ~d Cwk Co@y, I~inois, which operated the l-t expensive

prograq monitoring individual job searches and providing little direet assistance. Ibid., p. 94.
14 ● Performance Standards for the Food Stamp Employment and Training program

County, Illinois and Arkansas to around $1,000 in

Baltimore) and involved more of participants’ time

than FSET. Second, as discussed above, the population served by the WIN programs was made up of

mothers, with little job experience, while that served

by FSET is half male and predominantly childless.

Support for the hypothesis that FSET had little

impact because its per participant expenditures were

so low is found among the seven WIN programs. As

shown in table 3, the only programs that had no

impact were those in West Virginia, which had the

highest unemployment rate in the Nation (21 percent

in 1983), and Cook County, Illinois, where average

expenditures were only about $130 to $160 per

participant.48 The low costs of the Cook County

program reflected its emphasis-monitoring and

sanctioning nonparticipants. Little staff time or

expense was required for direct services, because the

program consisted of 2 months of independent job

search followed by up to 3 months of unpaid

workfare. 49 The Arkansas program, while also

inexpensive, provided more direct assistance to

participants, primarily in the form of a 2-week job

club. For comparison with FSET, see footnote 42.

By contrast, the programs that spent the most on

their participants, in Maryland and California, yielded

the largest absolute gains in participant earnings

when compared with control groups. San Diego’s

Saturation Work Initiative Model (SWIM) program,

which combined an initial period of job search for all

participants followed by unpaid work experience,

remediation, and occupational training for those

who needed it, yielded the greatest earnings gains,

which increased to nearly $900 per year by the third

year after participants entered the program.5o In its

most recent analysis of the seven WIN programs as

well as several others, MDRC concluded, “broadcoverage programs that included some higher-cost

services had greater average earnings impacts than

those that did not.’ ’51

Table 3-Costs and Earnings Impacts of

Mandatory Employment and Training Programs

for AFDC Recipients

Gains Gains

Program costs (dollars) (percent)

Illinois

(Cook County). . . . . . . . . . $157 $0 0%

Arkansas. . . . . . . . . . . . . . . 118 337 31 (year 3)

West Virginia . . . . . . . . . . . . 260 0 0

Virginia. . . . . . . . . . . . . . . . 430 268 11 (year 3)

California (l). . . . . . . . . . . . 636 443 23 (year 1 )

California (II)

(San Diego SWIM). . . . . . . 919 658 29 (year 2)

Maryland . . . . . . . . . . . . . . . 953 511 17 (year 3)

NOTE: Costs are average cost per participant. Gains are statistically

significant increases in the average amount earned by participants

when compared with controls.

SOURCE: Judith M. Gueron and Edward Pauly, From We/fare to i4brk

(New York, NY: The Russell Sage Foundation, 1991), pp. 15-17.

Why would the second difference, a higher

proportion of males with fewer dependents, contribute to FSET being ineffective? One possibility is that

single mothers have so little labor market experience

that even small interventions will give them a

significant gain in employment and earnings, whereas

males and single females who are the targets of

FSET generally have some job experience and many

of them can find employment without the help of an

employment and training program.52 However, the

results of the San Diego SWIM program suggest that

more intensive services can have an impact, helping

males not only to find jobs, but to find better jobs

than they otherwise would have. This program

included males receiving AFDC-UP (unemployed

parent) benefits. On average, male participants

earned $454, or 12 percent, more than males in the

control group in the second year after random

assignment. 53

Another possibility is that mothers are more likely

to benefit from employment and training programs

481986 d~llars.

4~~el F~~~&~ et & Fi~l Report on Job search And workExperienCe in cook Counfy mew York NY: Wpower Demo n

Corp., 1987), p. viii.

5oJudith M+ Gueroq cited fi J.f~npoWerDe~m@~tion R~S~~rch corporation: lf)ag Annual Report (New York NY: M

Sljudith M. Gueron ~d ~w~d pa~y, From we~are to work @Jew yor~ NY: Russell sage FouditioQ 1991), p. 27 .

52~ong arepresen~tive smple of lq,~workregis~ts eligible for FSET in 1988, about half(53 per~nt) bd hd some employment h

year. The 13,000 work registrants were randomly assigned to participate inFSET or enter a control group. When participants and controls were surveyed

1 year after random assignmen~ about half (52 percent) of each group had experienced some employment during the previous year. Run% et al., op.

cit., footnote 15, pp. 3-31 and 4-25.

sqGueron and Pauly, op. cit., footnote 51, p. 35.
Section 4--Comparison Between FNS’ Proposed Standards and OTA’s Model Standards ● 15

because they are highly motivated by the desire to

provide for their children. Both the mandatory WIN

programs and voluntary demonstration programs,

including one which trained AFDC recipients as

home health aides,54 have increased the earnings of

single mothers. The literature does not suggest what

might provide similar motivation to males or females without children. However, one approach to

increasing the motivation of FSET participants

might be to make the program voluntary, rather than

mandatory (see section 5). It is possible that those

who are self-motivated to volunteer would be more

likely to complete education, training, job search,

and other activities that would lead to employment

than those who are motivated only by the threat of

sanctions.

Definition of “Participant”

FNS proposes to use two different definitions of

“participant.’ For the purposes of meeting the 10

percent participation standard, a “participant” would

be any non-exempt mandatory work registrant who

is assigned to FSET, including those who never

appear for an FSET activity .55 For the purposes of

calculating the outcome-based performance standards, FNS proposes to use a base of ‘‘terminees’

made up of only those participants who actually

begin their frost assigned activity.

OTA finds these two definitions inconsistent and

suggests that FNS use a single definition for both

purposes-those who actually begin their first

assigned activity, excluding initial “no shows. ” In

terms of the participation standard, the Abt evaluation discussed above found that one factor in FSET’s

lack of impact was lack of participation. Despite the

threat of sanctions,56 over half of “mandatory”

participants never received any employment and

training services that year. Most of these (34

percent) were ‘‘no shows,” who never appeared for

their frost FSET activity, such as a job club. Thus, to

meet the 10 percent participation standard under

OTA’s definition, the States might have to target

about 14 percent of work registrants for enrollment

with the expectation that one-third would not appear.

OTA agrees with FNS’ proposal to include

volunteers along with mandatory participants when

calculating the outcome-based performance measures.

Priority of Service

FNS proposes that, in delivering FSET services,

the States give first priority to mandatory participants (i.e., work registrants who have not been found

exempt) who are “hard to employ” (HTE), second

priority to mandatory participants who are not hard

to employ (NHTE) and third priority to food stamp

recipients who volunteer.57 As an incentive to the

States to implement these priorities, FNS proposes

giving extra credit for HTE in the job placement and

wage measures, regular credit for mandatory participants in all four measures, and half credit for

volunteers in the job placement and educational

improvement measures.58

Based on the criterion that FSET should serve

those with greater barriers to employment and on

MDRC’s research which shows that welfare-towork programs have little impact on those who are

most job-ready, OTA supports giving first priority to

HTE participants. In the WIN programs discussed

above, program impacts were greater-up to a

point-for those who were more welfare-dependent

and less job-ready .59 However, the qualification is

significant as figure 4 shows: impacts were smallest

for the most welfare-dependent as well as the least

welfare-dependent (who were most able to find jobs

on their own).60 In addition, the positive impacts

occurred in settings where the more welfaredependent were “mainstreamed” in job clubs with

those who were more job-ready, a setting which may

have benefited the less job-ready. This research

implies that FSET might begin to have an impact if

fistephenH. Bell et~o, Ovemiew ofEvaluationResults-Eval~tion oftheAFDCHomemaker-HomeHealth AideDe~mt@iOm (w-o%~:

Abt Associates, Inc., 1987), p. ix.

5556 Federal Register 43188 (Aug. 30, 1991).

S6Abt fomd tit ~actiom ~me not s~ongly ~ppli~. However, o“l’A’s ~ysis, &~sed ~a in Sation 5, suggests th

sanctions do little to encourage participation in “mandatory” programs.

5756 Federal Register 43157 (Aug. 30, 1991).

58~s @vw ~~r~t for ~olut~rs in its ~~e ra~ ad food stamp ~clos~e m-es. The ratio~e for this inconsistency k tlllcle~.

5~~el Ffiedlmdw ad David ~%, A Sttiy of pe@or~nce Measures ad subgroup rmpacts in Three we~are Emp l

(Washingto~ DC: National Commission for Brnployment Policy, 1987), pp. vii, xv.

‘Ibid., p. x.
16 ● Performance Standards for the Food Stamp Employment and Training Program

Figure 4-Subgroup Impacts

r

$!w

o HI I 1, 1A

..%%%. . .

No Prior AFDC AFDC returnees Long AFDC or no earnings

Increasing welfare dependency -->

❑ Baltimore ❑ Virginia ■ Arkansas

The impact of employment and training programs is greatest for those at an intermediate level of welfare

dependency.

SOURCE: Daniel Friedlander, Performance /rrdicators for Se/ecfed We/fare Employment Programs (New York, NY:

Manpower Demonstration Research Corp., 1988), p. xiv.

the States could be encouraged to move beyond the

most employable (the least welfare-dependent) to

serve the middle group. It also suggests that very

intensive services are needed to have an impact on

work registrants in the bottom (most welfaredependent) group.

OTA concurs with FNS’ definition of HTE--

those who have not completed high school or

obtained an equivalency degree and have not been

employed in the preceding 12 months. However,

based on its criterion that FSET should be aimed at

helping individuals achieve self-sufficiency, OTA

proposes that full credit be awarded for successful

outcomes among volunteers.

Many work registrants leave the food stamp rolls

and find work (with or without receiving FSET

services), only to become unemployed and go back

to needing food stamps again.61 To achieve selfsufficiency, this group may require remedial education and/or occupational training” to obtain more

stable employment. Although there is no conclusive

research on this point, volunteers might be more

likely than mandatory participants to have the

self-motivation required to complete such training

and to search for a good job. While allowing full

credit for volunteers, OTA recognizes that this could

lead to providing services to the most job-ready, who

are least likely to benefit from FSET. Therefore,

OTA suggests giving extra credit for HTE volunteers as well as HTE mandatory participants in

calculating the other three outcome-based performance measures.

Job Placements

FNS proposes the following measure of entered

employment rate (EER):

EER = (3 X no. HTE mandatory jobs) + no. NHTE

mandatory jobs + (0.5 X no. volunteer jobs)/HTE

61c~le~ U&ret ~o, ‘‘Long ‘Mm Participation in the Food Stamp Program by Work Registrants, “ in Carole Trippe et al. (eds.), Food Stamp Policy

Issues: Results From Recent Research (Alexandri% VA: U.S. Department of Agriculture, Food and Nutrition Service, 1990), p. 205.
Section 4--Comparison Between FNS’ Proposed Standards and OTA’s Model Standards ● 17

Table 4-Job Placement Rate-Comparison Between

FNS’ Proposed Rule and OTA’s Model Standards

FNS OTA

. . . . . — Definition. . . . . . . . Participants

employed within

1 month after

the month they

leave FSET

Weights for

HTE. . . . . . . . . . Triple credit for

HTE, based on

relative employability of the

two groups

Priority of

service. . . . . . . Half credit for

volunteers

Weights for

benefits. . . . . . . No extra credit

for jobs with

medical benefits

Participants employed

at 3 months after

leaving FSET

Same-agree with

analysis and logic.

Include HTE

volunteers

Full credit for

volunteers, who may

be more motivated

than mandatory

participants

Double credit for

jobs with medical

b benefits, to increase

mtion

SOURCE: OTA, 1992.

mandatory + NHTE mandatory + volunteer terminees.

OTA agrees with FNS that State performance

should be measured, at least in part, in terms of job

placements. Two of the goals of FSET are to

increase employment and to help individuals achieve

self-sufficiency. However, as noted above, OTA

would give full credit to volunteers (and extra credit

to HTE volunteers) in calculating this and the other

performance measures. OTA agrees with FNS’

proposal to include volunteers in both the numerator

and the denominator for this measure.

OTA disagrees slightly with FNS on the timeframe

for measuring employment outcomes of FSET

participation. FNS proposes “the end of the month

following the month of E&T (employment and

training) termination.”62 This would be between 1

and 2 months after completion of FSET activities.

Because job-finding can be a drawn-out process,

especially when the economy is weak, OTA suggests an alternative measuring period corresponding

with that used under JTPA performance standards—

13 weeks after leaving the program (see table 4).63

OTA suggests this timeframe not only to conform to

JTPA, but also because employment status at 13

weeks (or 3 months) from program exit is a better

predictor of long-run gains in earnings and reductions in welfare than employment status in the month

following program exit.64

FNS does not specify how data for this measure

are to be obtained, but appears to assume that the

States will conduct postprogram surveys and/or

interviews with a sample of participants. OTA

agrees with this approach, but suggests that FNS

continue to monitor the feasibility of using unemployment insurance (UI) wage record data. When

current problems of interstate data transfer and time

delays can be resolved, UI data may prove to be more

accurate and cost-effective than relying on participant surveys.65

Weights

OTA supports FNS’ proposal that job placements

be weighted to encourage the States to enroll those

‘‘with greater barriers to employment. The Hunger

Prevention Act requires the States to help this group;

in addition, such targeting may represent the best use

of limited Federal and State FSET funds.

Without weights, and with a participation standard of only 10 percent, the States might simply enroll

the most job-ready work registrants to meet the job

placement standard. FNS found that, among 1988

FSET participants, the HTE group was only half as

likely to find jobs as the NHTE group.66 Recognizing that it might take the States at least twice as

much effort to place this group, and to provide an

additional incentive, FNS proposes giving triple

credit for each HTE placement. OTA concurs with

FNS’ analysis and proposed weighting.

In order to move toward the goal of helping

‘‘individuals achieve self-sufficiency,’ OTA also

suggests that additional weight be given for place6Z56 Federal Register 43158 (Aug. 30, 1991).

63Ro&~ ~ Jonm, ~~TrU ~d fiplommt Gfi~ce ~tter No. $L8$I, J~e 29, 1$YJ(),” U.S. Dep@ent of bbr mimeo, Washhlgto% DC.

64Jefiey ~fi~~et &E~tabli~hing ~ Pe@oMnce Ma~gement Sy~temfor Targeted Weyare program (w~~to~ DC: National cOK13UlkSiOIl

for Employment Policy, 1988), p. vi.

&Jo~ BaJ ~d ChlesE. Tm~ A Fea3ibili~ s~dy of the use of Unemployment In~rance wage-RecordData as an Evaluation Tool for JTPA

(Washington DC: National Commission for Employment Policy, 1991), p. v.

6656 Federal Register (Aug. 30, 1991), p. 43168.
18 ● Performance Standards for the Food Stamp Employment and Training Program

ments of both HTE and NHTE clients (including

volunteers) in jobs that include paid medical benefits. According to a recent study, “low-wage jobs

generally come with low-or no-medical benefits.” 67 This problem prevents some welfare recipients, who often qualify for Medicaid, from leaving

the welfare rolls. Congress recognized this problem

in providing transitional Medicaid for JOBS participants who obtain employment, but no such benefits

are available for FSET participants who become

employed. Based on a 1986 estimate that only 13.4

percent of low-wage jobs provided health benefits,

it maybe seven or eight times as difficult to find such

jobs. 68 Following FNS’ approach to weighting for

HTE job. placements would lead OTA to propose

seven or eight times credit for placements in jobs

with paid medical benefits. However, to avoid

placing too much emphasis on this one measure of

job quality, OTA suggests giving double credit for

jobs with medical benefits. This extra credit would

apply to all FSET participants, whether or not they

are hard to employ, including volunteers.

Initial National Standard

Based on its analysis of State success rates in

placing FSET participants in 1988, FNS proposes an

initial benchmark of 25 percent for FY 1992-94.

This proposed standard is based on what FNS

estimates that 75 percent of the States were able to

achieve in FY 1988.69

FNS proposes raising the standard in future years,

as the States become better at finding jobs for FSET

participants. For example, a new national benchmark for FY 1995-96 would be set based on State

performance during FY 1992-94. However, future

standards, like the initial benchmark, would continue to be based on the 25th percentile of what has

been achieved. This proposal follows Congress’

intent that the new performance standards be easily

attainable. OTA concurs with this approach and with

its rationale. OTA notes that the use of the 25th

percentile does not preclude increases in the standard over time. Using the 25th percentile, the JTPA

Photo credit: U.S. Department of Agriwlture

The 25 percent placement standard reflects the

difficulty of placing even job-ready FSET participants.

This woman with job-related skills went through four tough

interviews with the help of an FSET counselor before

landing a job as a clerical worker in an appliance store.

performance standards for adult followup employment increased from 60 percent for program years

1988 and 198970 to 62 percent for program years

1990 and 1991.

Earnings

The Hunger Prevention Act specifies that the

FSET performance standards take into account job

placement rates, wage rates, and job retention rates.

However, FNS’ proposed standards take only the

first two factors into account. FNS proposes the

following measure of wage rates:

Average hourly wage rate = (0.5 X portion

exceeding minimum wage) + HTE wages + NHTE

mandatory wages + volunteer wages/HTE + NHTE.

OTA suggests that FNS develop an alternative

measure--e arnings--that would capture both wage

levels and job retention. Most FSET participants in

1988 were very poor. Although 53 percent had

experienced some employment in the year prior to

being certified for food stamps,71 nearly threequarters had annual incomes below 75 percent of the

poverty line of $7,500, as defined by the Office of

‘%Iary Jo Bane and David T Ellwood, ‘“ Is American Business Working for the Poor?” Harvard Business Review, September-October 1991, p.

60.

6S0~y 13.4 Pmcent of persons ~~g1ms~$5,~ fi 1986 remiv~ employer-provided he~th iIISUHUMX, Rob@ L. clm~ Employee Benefits

for American Workers (WashingtorL DC: National Commission for Employment Policy, 1990), p. 19. In 1988, two-thirds of FSET participants earned

less than $3,000. Puma, et al,, op. cit., foomote 15, p. 3-31.

6956 Federal Register 43187 (Aug. 30, 1991).

TO~A opmtes on a progr~ year, from July 1 to June 30, rather than the Federal fisd yem. running from Oct. 1 to Sept. 30.

71- et al., op. cit., footnote 15, p. 3-31.
Section 4--Comparison Between FNS’ Proposed Standards and OTA’s Model Standards . 19

Management and Budget. Eighty percent earned less

than $6,000 in the year before they entered the

program.

One factor in the poverty of the work registrants

targeted for FSET is the short duration of the jobs

they find. An analysis of work registrants in the

States of Alabama and Washington found that the

largest share of food stamp allotments “was consumed by households that experienced multiple

spells within 2 to 21/2 years after they were initially

certified. ‘’72 Although they made up less than a third

of the work registrants studied, these households

consumed nearly half of all food stamp allotments

during the study period.

OTA suggests a measure of earnings, not only

because earnings reflect job retention, but also

because earnings may illuminate the impact of the

program. In a study for the National Commission for

Employment Policy, Abt Associates examined several alternative short-term performance measures to

see how well they correlated with real earnings gains

(identified in a comparison with control groups) for

AFDC recipients who had been involved in a

demonstration project to employ them as home

health aides. Abt found that average earnings over

the 6 months following program termination was the

best predictor of long-term gains in income and

reductions in welfare dependency. 73 Given the high

cost of obtaining data at 6 months after program exit,

Abt found that average wages over 3 months was

nearly as good a proxy for earnings gains.

OTA proposes that earnings be measured in

conjunction with employment, either through interviews with participants, or, if feasible, using UI

wage data on

additional data

tain.74

Weights

participants. OTA finds that the

would not be burdensome to obFNS proposes that weights be used to encourage

the States to place FSET participants, particularly

those who are hard to employ, in jobs paying above

the minimum wage. Specifically, FNS proposes that

the States be given 1.5 times the usual credit for that

portion of the wages of HTE participants that

exceeds the Federal minimum wage ($4.25 per hour,

as of April 1, 1991). For example, an HTE client who

was placed in a $6 per hour job would be credited at

an average wage of $6.87 per hour. FNS’ proposal,

like that for job placement of HTE, is based on its

analysis of the wages earned by HTE FSET participants in 1988. This analysis found that the average

wages of HTE participants were above the minimum

wage, but by a smaller amount than the wages of

NHTE participants.75 OTA finds the analysis and

proposed weighting reasonable, and suggests that

FNS incorporate them into an earnings measure.

In assessing overall State performance, OTA

suggests that extra credit be given for achievement

of the earnings standard. A study of the impacts of

performance standards on the services provided by

local JTPA operators found that policies which put

greater weight on the wage standard “significantly

increase provision of classroom training in occupational skills. ’ ’76

Initial National Standard

FNS proposes an initial national wage benchmark

of $4.45 per hour, or 5 percent above the national

minimum wage that became effective April 1, 1991.

As with the other initial standards, the $4.45 level is

derived from its analysis of data derived from the

1988 FSET evaluation, and is expected to be the

level that at least 75 percent of the States are already

achieving.

OTA suggests an initial quarterly earnings benchmark, to be measured at 3 months following program

exit, in the range of $1,395 (see table 5). This

estimate is based on the average number of hours

worked by 1988 FSET participants, multiplied by a

TzCharles Usheret al., “Ixmg-’IkrmParticipation in the Food Stamp Program by Work Registrants, “in Carole Trippe et al. (eds.), Food Stanzp Po2icy

Zssues: Results From Recent Research (Alexandria VA: U.S. Department of Agriculture, Food and Nutrition Service, 1990), p. 205.

%ZOrXIitSky, et al., op. cit., footnote 64, p. vi.

74~e u-s. D~~~nt of ~~r, ~h,ich Ovasees co~wtion of posQmW~ &@ on JTPA p~cip~ts,~fowd tit the greatest ~~lEw iS fhd~

the persons to be interviewed. Adding afewmore questions to the interview does not add greatly to the time or expense of data gathering. Steve AaronsoQ

U.S. Department of Labor, personal communication Nov. 27, 1991.

7556 Federal Register 43171 (Aug. 30, 1991).

TGDic~on et ~., op. cit., footrlOte 39, p. 195.
20 . Performance Standards for the Food Stamp Employment and Training Program

Table 5-Average Wage and Earnings-Comparison

Between FNS’ Proposed Rule and OTA’s Model Standards

FNS--Average wage OTA--Quarterly earnings

Definition. . . . . . . . . . . . . . . . . Average wage of those em- Earnings in the 3 months after

ployed within 1 month of leaving FSET

leaving FSET

Weights—HTE. . . . . . . . . . . . . Extra credit for HTE wages lncorporate extra weight into

above $4.25/hr (the current min- earnings measure, with extra

imum wage) credit for HTE wages above

$5.00/hr.

Weights--overall

performance. . . . . . . . . . . . . No extra credit for wages in Extra credit for earnings in asoverall performance sessing overall State performance--to encourage placement

in longer lasting jobs

SOURCE: OTA, 1992.

wage of $5 per hour.77 FNS may wish to calculate a

more exact earnings benchmark, based on the 25th

percentile, rather than the average.

OTA’s proposed earnings standard incorporates a

slightly higher wage ($5 per hour) in order to

encourage bringing more FSET participants out of

poverty. The Abt evaluation found that most FSET

participants lived in relatively small households;

nevertheless, the average household size was 2.2

persons, and 30 percent lived in households with

three or more children. The Bureau of the Census

places the 1990 poverty line for a family of three at

$10,419. An FSET participant who was the sole

support of such a household and was placed in a job

earning the benchmark wage proposed by FNS

($4.45 per hour) would earn only $9,256 under the

optimistic assumption that the job was full time and

lasted a full year. Thus, the family would still be in

poverty. Only single and two-person food stamp

households would be brought above the 1990

poverty line with the wage proposed by FNS. By

increasing the benchmark to $5, FNS could encourage the States to seek out better jobs that would

represent a significant improvement over welfare.

An earnings measure based on a $5 per hour wage

should not be too difficult to attain. Among food

stamp recipients enrolled in JTPA in 1989, the

average hourly wage at termination was $5.11, but

the average hourly wage among those who had

participated in classroom training was $5.56, while

those who received only job search assistance

averaged $4.75.78 Another study of JTPA participants in 1985 found that training correlated directly

with wages—training in higher skill jobs led to

higher average wages for both those who were more

job-ready and those who were less job-ready (this

group included welfare recipients with no recent

work experience).79

Reductions in Food Stamp Dependency

FNS proposes the following measure of reductions in food stamp dependency:

Case closure rate = no. all mandatory cases closed

+ no. all voluntary cases closed/all mandatory

terminees and voluntary terminees.

Although the FNS proposal is derived from the

Hunger Prevention Act, which specifies that the

performance standards take into account “households ceasing to need benefits under this act,” OTA

disagrees with it. OTA does agree with FNS’

statement that “it would be extremely difficult to

construct an affordable measure that could directly

capture ‘ceasing to need benefits.'"80Need for food

77~~ ~v~.~g~ hOm~ ~~&.d fi the 90 &y~ fo~o~g Progm~nt~ w~ 279. ~o~tion Suppfied by Steven Bell, Abt Assochtes, hc., Wd on

Puma et al., op. cit., footnote 15, pp. 7-15,7-19.

Tgu.s+ Dep~ent of Labor, op. cit., footnote 18, 1991, p. 29.

v~owever, the study also found that less jobready individuals typically reeeived less training and more low-cost job seareh assistance than those

who weremorejobready. In addition, dropouts were undeserved in proportion to the eligible population, and typically received little remedial edueation

and little training. U.S. General Accounting OffIce, Job Training Partnership Act: Services and Outcomes for Participants With Di#en”ng Needs,

GAO/HRD-89-52 (Washington, DC: 1989), pp. 3,51.

~56 Federa/Register 43172 (Aug. 30, 1991).
Section 4--Comparison Between FNS' Proposed Standards and OTA’s Model Standards .21

stamps is a complex matter determined on the basis

of family size, income, living expenses, and other

factors by caseworkers on a case-by-case basis.

Obtaining this information from individuals who are

no longer involved in FSET and possibly no longer

obtaining food stamps would be costly and timeconsuming.

Although FNS’ proposed substitute is a much

simpler measure, case closures can occur for many

other reasons besides increased income. In particular, using case closures as a performance measure

could have the unintended effect of encouraging

States to sanction nonparticipants, rather than encouraging participation through positive means.

MDRC’s studies of the mandatory WIN programs

found that, among the most disadvantaged subgroup

participating, there were no “consistent or large”

earnings gains, but that this group provided the

largest welfare savings. 81 This suggests that some of

those eligible for AFDC went off the rolls, perhaps

out of fear of sanctions, without finding jobs. Using

food stamp case closures as a performance measure

could have the same effect on the HTE group within

FSET, discouraging those who most need food

stamps from using them.

Although omitting this measure does not accord

with the original language of the 1988 Hunger

Prevention Act, Congress recently changed its

requirements for the FSET performance standards82

and no longer specifies that they take into account

‘‘households ceasing to need benefits.’

Educational Improvements

. . . today, even if you’re a janitor, there’s still

reading and writing involved. Like if they leave a

note saying, ‘Go to room so-and-so, this and that. ’

You can’t do it. You can’t read it. You don’t know.

And they ain’t going to hire somebody to run along

and tell people what to do.83

FNS Proposed Measure

FNS proposes the following measure of educational improvement:

Educational improvement rate = no. mandatory

terminees + (voluntary terminees x 0.5) who completed 64 hours, or earned General Educational

Development certificates (GEDs), or met State goals

/ all educational mandatory and voluntary terminces. w

This calculation measures the proportion of ‘successful’ participants among those who enter educational programs. Successful completion would be

determined by the States,85 judging performance on

one or more of the following:

1. completion of 64 or more hours of classroom

training;

2. obtaining a high school diploma or equivalent;

or

3. meeting State-defined educational goals comparable to those that could be accomplished in

the 64 hours prescribed in 1.86

Education that can be counted toward the 64 hours

must focus on ‘‘basic educational skills. ”87 Examples are adult basic education (ABE) and english as

a second language (ESL) classes, GED preparatory

classes, and other training designed to improve the

skills of participants in one or more of the six basic

skills of reading, writing, mathematics, speaking,

listening, and problem-solving.

88 FNS proposes that

inclusion of an educational improvements measure

be at the option of each State. No explicit penalty

would be levied on States that did not include such

a measure. However, successful performance on the

measure would earn States extra credit toward

receipt of incentive funds.89

This section first considers the justification for

including educational improvements as one of the

outcome-based performance measures. It then pre81 Gueron ~d Pauly, op. Cit., fOOhIOk? 51, P. 30.

82The Ford, A@-~@.e, Comenation ~d ‘f’~ade Act of 1991 @blic ~W 102-237, signed December 13, 1991).

83EllenCole, TheExpenenceoflz/iteracy ~e~owspfigs, oH: Ufion ~ad~te school, l$)7@, p. 123 i,u paulaDugg~Literacyat Work; Developing

Adult Basic Skills for Employment (Washingto~ DC: Northeast-Midwest Institute: The Center for Regional Policy, 1985), p. 2.

~56 Federal Register 43173 (Aug. 30, 1991).

8556 Federal Register 43159 (Aug. 30, 1991).

8656 Federa/Register 43172 (Aug. 30, 1991).

gvIbid.

8856 Federal Register 43172 (Aug. 30, 1991). rbid.

8956 Federa/Register 43184 (Aug. 30, 1991).
22 ● Performance Standardsfor the Food Stamp Employment and Training Program

sents an analysis of the FNS proposed measure, and

OTA’s suggested changes.

Justification for Measurement of

Educational Improvements

Although States are not required to raise the

educational level of FSET participants, there are

good reasons to encourage them to do so by

including educational improvements in the outcomebased performance measures. Arguments in support

of this position include legislative intent, the relationships between education, employment and earnings, and employer demand for higher educational

levels in applicants for positions where demand for

educational qualifications has been, until quite

recently, minimal.

Congressional interest in education as a means to

reduce food stamp dependency has increased steadily since the mid-1980s. In the Food Security Act of

1985 Congress defined a food stamp employment

and training program as including one or more of the

following components: job search, job search training, workfare, and work experience and/or training.90 In the 1988 Hunger Prevention Act, Congress

added “educational programs or activities to improve basic skills” to this list of optional components.91 The Food, Agriculture, Conservation, and

Trade Act of 1990 inserts “and literacy” after

“basic skills” in the phrase just quoted from the

1988 act.92

There are strong associations between education,

employment, and earnings. The more education a

person has, the more likely that person is to be

employed. Among those employed, the more highly

educated enjoy higher wages,93 and over the past 30

years, education has increased in importance as a

contributor to earnings. Between 1960 and 1984, the

difference in earnings between high school graduates and those who dropped out of high school

increased from 30 to 60 percent.94 The positive

associations between education and employment

and between education and earnings are likely to

increase in the future, paralleling expected increases

in both the pace of change and the complexity of

technology.

Employers increasingly use educational attainment as a screen in both hiring and promotions. A

postsecondary education is now desired in many

industries where job applicants could previously

qualify with a high school diploma or less. For

example, textile firms now seek graduates of 2-year

associate degree programs for maintenance and

repair positions, a striking change from past practice.

Until recently, textile companies saw no need for a

high school diploma, and entry-level workers with

motivation and ability could expect to rise from

low-level jobs into repair and supervisory positions.95 On average, in all industries, workers with

less formal schooling have fewer opportunities for

workplace-based training, and thus for advancement, than those who are more highly educated.96

Compared to the general population, the food

stamp population is poorly educated. Whereas

three-fourths of the U.S. population aged 25 and

older have completed a high school education,97 half

of those eligible for FSET had done so in FY 1988.98

In a 1986 study of food stamp work registrants in job

search demonstrations, average schooling was 10.5

years.

99 FSET participants are even less likely than

the total population of food stamp recipients to have

a post-high-school degree.loo

%e Food Security Act of 1985 (Public Law 99-198), Title X, Subtitle ~ sec. 1517.

gl~e H~ger prevention Act of 1988 (Public Law 100-435), Title IV, SW. 404.

~~e Food, Agriculture, Conservatio~ and Trade Act of 1990 (Public Law 101-624), sec. 1726.

gsRes~ch on this point iS Summarized in Gordon Berlin and Andrew Sum, Toward a More Perfect Union: Basic Skills, Poor Fam”lies, and Our

Econom”c Future (New Yorlq NY: Ford FoundatiorL 1988), p. 40.

94~thony p. cmev~e, ~i~ J. Gfim, ~d Ann S. Mel~r, workplace Basics: The Essential SkiZ/s Employers Want (SaII Francisco, C A

Jossey-Bass, 1990), p. 5.

9SOTA, Wortir Training, op. cit., footnote 4, pp. 84-85.

$I150TA, Worker Training, op. cit., footnote 4 P. 228.

%’Michel _ Mm Wern er, ~d we Hoj~, EVal~fion of the Food stamp Employment and Training program: Repo r

Program Zmp2ementation (Washingto~ DC: Abt Associates, Inc., 1988), p. 53.

98- et ~., op. cit., foo~ote 15, Evaluation of t he FoOdstamp Employment and Training program, Jwe 1990, table 3.2 ,

%randeis University and Abt Associates cited in Abt Associates, Report to Congress, Dec. 16, 1988, p. 53.

lmIbid., p. 53.
Section 4-Comparison Between FNS' Proposed Standards and OTA’s Model Standards ● 23

The educational deficits of FSET participants are

paralleled by unemployment and low household

income levels. Half of FSET participants reported

working for pay during the previous 12 months101

compared to three-quarters of the general population

over the age of 16.102 Annual income is less than

$3,000 annually for about two-thirds of FSET

participants, and about 80 percent had annual

incomes of less than $6,000.103 Given the relationships between education, employment and earnings,

lack of education appears to be a major reason that

food stamp recipients need food stamps. The word

‘‘appears’ is deliberate. As discussed above, research indicates that in the population as a whole,

higher educational levels are associated with higher

earnings, but there is no definitive evidence that

providing education to welfare recipients enables

them to be more self-sufficient. Suggestive evidence

comes from programs that include significant amounts

of education and training and show sizable impacts

on earnings, but these programs differ from less

successful programs on other dimensions than

education. Thus, the causative importance of increased education to welfare recipients is unproven.

l04 The lack of data on the impact of

provision of educational services to adult welfare

recipients has significantly tempered OTA’s conclusions about an educational improvement measure.

Analysis of the Proposed FNS Measure of

Educational Improvements

OTA makes the following observations and

comments about the educational improvements measure proposed by FNS.

The measure is optional.--Three arguments

support making measurement of educational improvements optional when measuring State performance. First, neither Congress nor FNS requires the

States to include educational improvement components in their FSET programs.105 Second, current

data are inadequate to develop a baseline for a

national standard against which educational improvement may be compared.106 Third and most

important is the above-mentioned lack of direct

evidence showing that more education increases the

employment and/or earnings of those receiving

welfare benefits.

Because of these valid arguments, OTA concurs

in making measurement of educational improvements optional initially. However, research now

underway may demonstrate the extent to which

education enhances the self-sufficiency of those on

welfare.107 OTA suggests that transition to a mandatory measure occur within 5 years if the value of

educational improvement to persons in or similar to

the food stamp population is demonstrated

Weights for the hard to employ.108 —In not

giving extra credit to the HTE, FNS’ proposed

educational improvements measure differs from the

entered employment rate and the achievement of

wages above the minimum wage. The reason given

for no extra credit for educational improvements by

the hard to employ is that one of the barriers defining

them is their lack of a high school diploma or a GED

and thus States are already motivated to include

them in educational activities.l09 However, the rest

of the definition of the hard to employ is that these

participants have not worked in the last 12 months.

Under the proposed standard for entered employment rate, States receive triple credit for HTE

participants who obtain jobs. Triple credit under half

the definition of HTE and no credit under the other

half of the definition is not consistent. OTA suggests

that consistency be maintained and that triple credit

be given in both instances.

l“llbid., p. 56.

102Ryscavage and Felb-HmW in Repoti to Congress. . . . Ibid., p. 56.

los~ et al, op. cit., footnote 15, p. 3-31.

104Gueron ~dpa~ey, Op. Cit., fOOtiOte 51, P.‘.

1O$5G Federal Register 43173 (Aug. 30, 1991).

1065(j Federal Register 43172 (Aug. 30, 1991).

107~RC*~ s~dy of ~ifo~~s JOBS progr~, w~ch will produce in~rim findings in dle SllmlIl er of 1992, and the Rockefeller Foundation’s

continued research into the impacts of the Minority Female Single Parent Demonstration Program will provide more information on the value of

education in enhancing employment and earnings.

10s56 Federal Register 43173 (Aug. 30, 1991).

10956 Federal Register 43173 (Aug. 30, 1991).
24 ● Performance Standards for the Food Stamp Employment and Training program

Volunteers receive half credit.110 -Consistent

with its proposals for other measures, OTA proposes

that volunteers who satisfy the educational improvements measure be counted at full credit.

The denominator is restricted to those who start

an educational component.--One consequence of

limiting the denominator to those who start an

educational component is that a State where a few

people start and all of them successfully complete an

education component would score higher by this

measure than a State where many people start an

education component but only half successfully

complete it. OTA notes that this problem could be

avoided by changing the denominator for the educational improvements measure to all mandatory and

voluntary participants. The larger denominator would

imply that all those in FSET should participate in

educational components, which seems inappropriate

for an optional standard. Therefore, OTA concurs

with restricting the denominator of the educational

improvements measure to those who begin an

education component.

For the purpose of calculating overall state

performance, OTA suggests that FNS not attempt to

distinguish between satisfactory and outstanding

educational components during the first 2 years after

implementation of the performance standards. As

experience with educational components accumulates, and as research now underway provides

information on the benefits of education for the

welfare population, FNS may want to reexamine the

role of education within FSET.

The States may select one or more of three

different categories of success.--OTA agrees with

FNS that obtaining a high school diploma or GED

certificate is an appropriate measure of educational

improvement. OTA notes, however, that these two

measures are different. GED certificate holders have

passed a set of standardized tests, normed on

graduating high school seniors. Those who qualify

for a GED certificate have performed on the tests

better than 25 percent or more of graduating high

school seniors (see box A). Unlike the GED

certificate, the criteria for awarding a high school

diploma are not standardized and hence may vary

across States and localities. On the other hand, high

school diplomats have successfully completed

required functions within an institutional setting that

GED certificate holders have not.

The critical question is: how similar are holders of

high school diplomas and of GED certificates with

respect to the fundamental goal of FSET—attaining

self-sufficiency, as measured by earnings? Published research is inadequate to answer this question.

While a national survey of employers found that

between 96 and 98 percent treated traditional high

school graduates and holders of GED certificates the

same in terms of starting salary, employment level,

and opportunities for advancement,l11 whether these

similarities continue with the passage of years is not

clear. 112

In view of the institutional history of the high

school diploma and the scientific basis for the GED,

OTA concurs with the use of either as a measure of

educational improvement, unless further research

demonstrates clear superiority of one over the other.

OTA takes issue with 64 hours of classroom

training as the minimally acceptable level for the

proposed measure of educational improvements.

FNS’ justification is that 64 hours is a level of effort

roughly comparable to that which a State agency

would expend to help each participant find a job.113

Sixty-four hours is also the number that results when

4 hours per week (the lower bound of Department of

Education estimates that 4 to 6 hours per week are

spent by adults in Adult Basic Education) is

multiplied by 16 weeks (the median number of

weeks that work registrants participate in the food

stamp program).

Whether or not 64 hours is adequate time to make

a significant gain in education is a function of many

factors including the educational task that the learner

is trying to master, the learner’s preexisting proficiency in the task, native ability, the number and

spacing of the learning periods into which the 64

hours is divided, and the capability of the teacher,

among other variables. For programs similar to those

11056 Federal Register 43173 (Aug. 30, 1991).

lll~~ew Malizio and Douglas Whitney, ‘‘Educational Credentials in Employment: A Nationwide Survey,’ American Council on Education and

GED Research Brief, May 1985.

112~vestigator~ ~ttemp~g t. ~solve this issue: ~ &a&r, Rutg~s ufiversi~, ~~to~ NJ ad StephenCmeron ~d J~M HCX_ National

Opinion Research Center at the University of Chicago, Chicago, IL.

11356 Federal Register 43173 (Aug. 30, 191).
Section 4--Comparison Between FNS’ Proposed Standards and OTA’s Model Standards ● 25

Box A—What Is The GED?

GED stands for General Educational Development The GED tests are administered by the American Council

on Education and are taken by people who have not completed high school but hope to demonstrate that they have

knowledge equal to those who have high school diplomas. The GED tests have been used in all 50 States since

1963. 1 In 1990 nearly 764,00 persons took the examination and 431,225 passed and were thereby certified as high

school equivalents.2

The percentage of those who are classified as high school graduates by virtue of the GED tests has increased

substantially since the mid-50s. Of high school graduates in 1954, less than 2 percent were GED certified.3 That

number has risen to 16 percent today.4

The GED examination consists of 290 items in five test areas: literature and the arts, writing, mathematics,

science, and social studies. The examination is periodically revised to reflect the major content areas of high school

education and changes in how to best test whether applicants have achieved equivalent skills and knowledge. For

example, in the last revision in 1988, the examination was changed to include a question requiring an essay answer

and questions were changed to place more emphasis on problem-solving skills.

Besides revision of test items to reflect changes in curricula and educational thought, equivalency depends on

the more stringent standard of norming the test through performance of those graduating from high school. The

American Council on Education recommends that States using the GED tests set the base level for passing all five

test areas at the level achieved by at least 25 percent of graduating high school seniors. Most States use a base of

30 percent or higher.5

%WOII V. CttmerOn and Jamm J. HeckmaQ The Nonequivalence of High School J!lqw”valents, report prepared tm tie Natio~ ~i~e

Fmmdation ad the Bureau of Labor Statistics, U.S. Department of Labor, IMember 1990, revised June 1991, p. 1.

@!D%*SeNice, 1990 SratMicaZReporr (WaahingtoXDC: Amerioan Council onlklucatiom 1990), p. 2.

3c=mn @*- op. cit., footnote L P+ 4.

.

in which FSET participants would enroll, it is much trainees at the sixth grade reading level and

easier to find general statements about program above improve their skill levels by at least one

effectiveness than actual measurements of gains in and a half grade levels after only 20 hours of

competence. 114 Information in the literature that study. Those below the sixth grade level

bears on this point includes: progress more slowly, achieving a half year or

●

●

●

●

To improve a single grade level in a basic skill

such as reading takes 100 hours on average.115

In “exemplary” programs, participants can

improve one grade level in 50 hours.116

For those at a very rudimentary level of

learning, such as being able to sound out words

on road signs, it takes several hundred more

hours of learning to be able to understand most

newspaper stories.117

The USDA Graduate School’s Workforce 2000

Skills Development Program, using individualized self-study in generic literacy areas, helped

more improvement in reading grade level in 40

hours.

It is clear that reported learning in 64 hours varies

widely. That is one reason that OTA finds that 64

hours of classroom training is a poor measure of

educational improvement. It is not the major reason,

however. The greatest problem with designating

completion of 64 hours of classroom training as a

‘‘success’ is that it is a participation measure rather

than an outcome-based performance measure. As is

clear from the 1988 Hunger Prevention Act, what is

of interest is a measure of the results of time spent

114Larry Mi.kulecky, Second Chance Basic Skills Education, Indiana University at BloomingtorL mimeo, no date, p. 228.

IM~s is me +~ htimili~ recruits rind in large civiliau programs. Ibid., p. 226.

llGD~lfig, Ig84 in Mikulecky, op. cit., footnote 114, p. 226

llTHec~, Op. cit., footnote 114, p. 226
26 ● Performance Standards for the Food Stamp Employment and Training Program

Box B—What Kind of Education Is Most Likely To Help FSET Participants?

Research shows that what is taught in schools and in adult literacy programs differs from the reading, writing,

and analytical tasks in the workplace.1 The courts accept the distinction; tests of general reading ability for

employment have been found unsuitable as job screening devices unless they reflect actual job reading demands

(Griggs v. Duke Power).2

Further, even highly literate men and women do not perform well with technical materkd

on subjects with which they are unfamiliar, yet a low level of literacy maybe adequate with the same material if

the reader is very familiar with the subject. Results of testing U.S. Navy personnel show that measured reading

ability can be several grade levels below the difficulty of the material to be read, yet the material is understood if

the reader is very familiar with the subject.3

The major distinction between the workplace and the classroom appears to be that in the workplace a person

reads, writes, and computes-to-do, while in the classroom he or she reads, writes, and computes-to-learn, a

distinction first made by Sticht from military research in 1975 and confirmed by Diehl and Mikulecky in 1980.4

Put another way, students read texts to gather facts while workers read manuals, memos, schematics and other forms

of material to do, to assess, and to solve problems 5 as well as to learn.6 When reading to learn, students and workers

use different strategies. Students take notes and re-read. Workers use a wider array of strategies including problem

solving and relating new ideas to what they already know.7 These differences probably contribute to the weak

relationship between academic basic skills measured by standardized tests and job performance.8

A related issue is retention. Military recruits who learned basic skills with job-related materials retained most

of what they learned, but more than half of the learning gains with material that was not job-related was lost within

8 weeks.9 The literature does not indicate why learning with workplace material is more effective. Transfer,

continued practice, and greater motivation are possible explanations for the greater effectiveness of learning with

materials that are encountered during the workday.10

IW+S. a-of B&cation and TJ.s. I)epartmmt of Labor, ‘The Bottom Line: Basic SkillS ill the WM#-” Was~_ X:

U*S. Governrnent Prindng OHlce, 1988), p. 6.

%bid., p. 8.

31@xJw and fi~r, Trainin~The Competitive Edge, footnOte 7, p. 180.

4Paul V. De~@, “&Mic SHS ~~cation in Business and Jndustry: FactOH for Success Or Failure,” Contract paw submtt~ to ~~~

of ‘ibchnology Assessment Mtnuary 1990, p. 3.

%bid., p. 2.

6% HW~, ‘&Job ~tmcy: ~ MktiomMp Between SChOOl Preparation and Work@ace Acti%o” Re~4n8 Resea~c~

QuarferZy, VOL 17, no. 3,1982, p. 413.

71bid., p. 413.

8Dolkw, op. cit., fmtnote, p. A.

gTho~ G. Sti@~ in ~wlecky, seco~ chance Basic Skills Education, Indiana thiversity at BIOOd.W@NA *, no date, p.

240.

I-lee@, Ibid., note 6, p. 250.

learning , or attempting to learn, rather than a Rather than 64 hours of classroom training or

measure of the time itself. meeting State-defined goals comparable to 64 hours

of classroom training, OTA suggests that FNS

For the same reasons that OTA disagrees with 64 substitute the following measure: One grade level or

hours of classroom training as a measure of educa- an equivalent competency-based educational functional level improvement in one of three basic tional improvement, OTA disagrees with allowing skills-reading, writing, or mathematics-as demStates to define goals comparable to participation in

64 hours of classroom training.

onstrated by a widely used test. Examples of widely

used normed achievement tests (which measure
Section Comparison Between FNS’ Proposed Standards and OTA’s Model Standards ● 27

1

Early results from the Minority Female Single Parent (MFSP) demonstration study support the importance of

relating basic skills acquisition to workplace tasks. This project, funded by the Rockefeller Foundation, provided

education, training, job search assistance, and support services (e.g., child care) to minority mothers, many of whom

were on welfare. The four MFSP projects differed significantly in how they provided remediation in basic skills

and training in job skills. Two (in Providence and Atlanta) used a traditional sequential approach with remediation

of basic skills required before participants could progress to skill training for specific jobs. One provided basic skills

to the poorly prepared and gave general training g applicable to a variety of jobs in such subjects as electronics and

mechanics to those with more skills. The fourth project, at the Center for Employment Training (CET) in San Jose,

closely integrated basic skills and job skills training. Comparison of treatment and control groups clearly showed

that only the integrated approach of the CET program significantly increased the percentage working and their

average monthly wage.11

The results of the MSFP projeet must be approached with caution-only four sites were studied and the success

of CET may be due to factors such as its long history and its ties to its largely Hispanic community. The timeframe

over which controls and participants have been compared (1 year after program entry) may also partly explain the

superiority of the GET program. As mare time elapses, the sequential programs may prove to provide statistically

significant earnings gains.

Still, minority female single parents seem to value learning more if they can see that it is helping them to

achieve their primary objective of getting a job. In the two sequential programs, many of the participants left during

the required remedial basic educational classes and never began occupational training. These findings confirm an

important principle of adult learning, or andragogy, as formulated by Malcolm Knowles. According to Knowles,

the adult orientation to 1earning is Me-or task-centered,rather than learning for the sake of learning. Hence, curricula

should be organized around life situations (e.g., “Writing Better Business Utters”) rather than abstractions (e.g.,

courses such as “Composition I").12 For adults needing remediation of basic skills or English as a Second

Language, relevance of what they are learning to the adult world of work is very important.

lljo~B-@~d -eQ@OQ J#~reJob~ and Hig&r Pay (New Yo~ ~: The Rockefeller Fmruk@m, 1990)J P“ ii”

12MAIrASrn S. KMXVleS and Aasoeiates, Andragogy in Action (blew York NY: Jossey- BaSS Publkhers, 1985), P. 12.

grade level improvements) are the Test of Adult programs do not always correlate with the skills

Basic Education (TABE) and the Adult Basic

Learning Examination (ABLE), while the Comprehensive Adult Student Assessment System (CASAS)

is a widely used competency based test instrument.118 OTA suggests that each State be given the

flexibility to select the test(s) that it will use to assess

success in meeting the educational improvement

measure, provided that the test(s) selected is widely

used and nationally recognized. Research should

continue to establish comparability among these

tests.

The measure is not tailored to the special needs

of adult learners.— It is clear that strong basic skills

are important for a growing number of jobs. However, as shown in box B, the kind of academic basic

skills typically offered in remedial educational

needed to obtain and perform in good jobs.

Permitting the States to select competency based

tests as described above may encourage implementation of programs that integrate basic skills training

with occupational training and the consequent generation of additional data on the value of such

combined training.

Initial National Standard

FNS’ proposed standard for State performance is

success by 25 percent of FSET participants who

complete educational components. The basis for this

standard is expert opinion in light of insufficient data

on which to base a standard.119 OTA concurs that

there is a lack of data and supports the proposed

standard. OTA also supports FNS’ proposal to make

adjustments for individual States in FY 1994 and

118~ow~ stich~ Te~ti~g andA~~e~~~ent in Adult Ba~iC &fuCati~n ~~ English as a second ~nguage program, R~II prepared for the U.S.

Department of Edueatio@ Division of Adult Education and Literacy, January 1990.

11956 Federal Register 43174 (Aug. 30, 1991).
28 ● Performance Standards for the Food Stamp Employment and Training Program

beyond if sufficient data become available to make

such adjustments.

Calculation of Overall Performance

To calculate overall State performance, OTA

supports FNS’ proposal that each State be given a

simple numerical rating-a 2 for outstanding, 1 for

acceptable performance, O for unacceptable performance-for each of the outcome-based measures.120

FNS defines acceptable performance as achieving

the minimum performance standards (25 percent for

job placements, $4.25 for average wages, 20 percent

for food stamp case closures, and 25 percent success

in educational improvements). FNS does not define

‘‘outstanding’ performance for these measures.

OTA suggests that, in defining outstanding, FNS

examine the 50th percentile of what the States

achieved in recent years.

FNS proposes that the States not be required to be

measured and ranked on educational improvements,

but that they be able to win up to 2 extra points for

outstanding programs. OTA would not distinguish

between satisfactory and outstanding on this measure, allowing only 1 point. OTA would also exclude

food stamp case closures from the measures and give

extra weight (specifically, 1.5 times as much weight)

for successful performance on the wage standard

(e.g., a 3 for outstanding, 1.5 for acceptable performance, O for unacceptable performance). These ratings

would be summed to give an overall rating for each

State.

With four performance measures (three mandatory and one optional), and the above-mentioned

rating scheme, FNS proposes to rate States earning

less than 2 points as unsatisfactory, States with 2 to

4 points as satisfactory, and States with 5 or more

points as outstanding.121 Although OTA would only

use two mandatory and one optional measure, OTA

would, like FNS, require the States to meet the

standard on at least two of the measures. Thus, OTA

would rate States earning less than 2.5 points as

unsatisfactory, States with 2.5 to 4 points as

satisfactory, and States with 4.5 or more points as

outstanding (See table 6).

FNS’ proposed ratings would not affect funding

for the first 2 years of implementation of the new

standards. Instead, incentive funds ($15 million of

the total $75 million in State grants) would continue

to be awarded on the basis of the current, participationbased performance standards.122 Congress recently

(in Public Law 102-237, signed December 13, 1991)

directed FNS to change the participation standard

from 50 percent of mandatory participants to 10

percent of such participants, and achievement of the

new 10 percent standard will determine incentive

awards for the next 2 fiscal years. Beginning in FY

1995, FNS proposes to award the $15 million

incentive funds on the basis of both State performance ratings and participation rates.123

Because the proposed performance measures

(both OTA’s and FNS’) are only rough estimates of

the effectiveness of State programs, OTA suggests

that they not be used as the basis for financial

rewards and sanctions. OTA recognizes that rewards

and sanctions were mandated by Congress in the

Food, Agriculture, Conservation and Trade Act of

1990 (Public Law 101-624). Nevertheless, Congress

may wish to consider the possibility of using the new

performance standards primarily to identify which

States are in need of extra technical assistance and

which States should be recognized with commendations or other nonmonetary rewards. Sanctions

might then be reserved for persistent poor performance.

12056 Federa/&gister 43188 (Aug. 30, 1991).

12156 Federa/R@ter 43183 (Aug. 30, 191).

12256 Federa/RegiSter 43188 (Aug. 30, 1991).

lzs~id.
Section 4--Comparison Between FNS’ Proposed Standards and OTA’s Model Standards .29

Table 6-Assessment of Overall Performance: Comparison of

FNS’ Proposed Rule and OTAsS Model Standards

Measure FNS OTA

Job placement O points for unsatisfactory Same

1 point for satisfactory Same

2 points for outstanding Same

Average wage (FNS) O points for unsatisfactory Same

Quarterly earnings (OTA 1 point for satisfactory 1.5 points

2 points for outstanding 3 points

Food stamp case closures O points for unsatisfactory Exclude this measure

1 point for satisfactory

2 points for outstanding

Educational improvements O points for unsatisfactory Same

1 point for satisfactory Same

2 points for outstanding (Does not distinguish between satisfactory and

outstanding in the first

2 years)

Formula for overall assessment

FNS OTA

Job placement score+ wage score + food stamp Job placement score + wage score + educacase closure score + educational improvement tional improvement score (if the State offers

score (if the State offers education) education)

Unsatisfactory performance

Less than 2 points Less than 2.5 points

Satisfactory performance

2 to 4 points 2.5 to 4.5 points

Outstanding performance

Over 4 points Over 4.5 points
Section 5

Policy Options

As currently structured, FSET is not costeffective. The taxpayers’ costs to administer the

program are offset neither by decreases in the food

stamp rolls nor by increased income taxes from

increased employment of food stamp recipients. The

following two options, taken together or separately,

might improve the effectiveness of FSET.

OPTION 1: MAKE FSET

PARTICIPATION VOLUNTARY

There are at least two reasons to consider making

FSET voluntary: 1) the mandatory aspects of FSET

are only weakly enforced, and have little impact

when they are; 2) volunteers might be more likely to

complete and benefit from FSET.

As discussed in section 3, FNS has allowed the

States to grant categorical and personal exemptions

to about 30 percent of work registrants in recent

years. The States were expected to either enroll or

initiate sanctions against 50 percent of the remaining

“nonexempt mandatory” participants. The large

fraction of exemptions raises important questions

about equity. Do caseworkers throughout the Nation

follow uniform guidelines when deciding which

medical and transportation problems are serious

enough to warrant exemptions? Under the new

proposal allowing the States to enroll as few as 10

percent of work registrants, these equity questions

may become even more serious. The few work

registrants who are required to participate may

resent the others who are not required to do so.

There are two possible approaches to making the

program more equitable while targeting it to a

smaller group. If Congress wishes to keep the

program mandatory, the States could use a simple

queuing system, so that 10 percent of non-exempt

mandatory participants were enrolled at any given

time, while the others were on a waiting list. During

their time on the waiting list, non-exempt mandatories would not face the threat of sanctions. Many—

presumably those who are most employable--might

find jobs and leave the food stamp rolls” without the

need of FSET. Those work registrants who reached

the top of the waiting list and were called in for an

initial interview with an FSET counselor would face

the threat of sanctions if they did not appear or if they

subsequently dropped out of the program.124

A second approach would be to make FSET

voluntary. Among those who are not exempt, the

threat of sanctions appears to have little impact.

During FY 1988, 34 percent of this group never

appeared for their first interview with an FSET

caseworker. 125 Many of these no shows as well as

those who enrolled but later dropped out were able

to cure their noncompliance through repeated phone

calls, and continued to receive food stamps. Many

local food stamp agencies—about one-third of those

surveyed in FY 1988—reported they would “try

anything to avoid sanctioning a client. ’’126 Even

when a Notice of Adverse Action is sent out

immediately, processing and required notification

time result in very few food stamp recipients having

their food stamps terminated. This is because the

average work registrant is only on the food stamp

rolls for 3 months, and it often takes 1 or 2 months

before a registrant is denied recertification for food

stamps. 127 Thus, sanctioned registrants frequently

forfeit no, or only 1 month, of benefits.

Those who fail to comply with FSET requirements may do so for the very good reason that they

can find a job without the program. Among work

registrants deemed to be mandatory FSET participants in FY 1988, 56 percent of the no shows were

employed 1 year after random assignment, compared to 51 percent of those who participated in

FSET. 128

The mandatory aspect of FSET derives from its

origins in workfare. As an optional activity within

FSET, workfare has never been very attractive to

l~D~el Frie~d~, MDRC, Inc., personal communieatiow NOV. 25, 1991.

l~w, et al., op. cit., footnote 15, pp. 6-8.

1261bid., pp. 3-8.

127Charles Usheret al., “Long-’IkrmParticipationin the Food Stamp Program by WorkRegistrants, ‘‘ in Carole Trippeet aL, FoodStamp Policy Issues:

ResuZtsfiom Recent Research (Alexan&i~ VA: U.S. Department of Agriculture, Food and Nutrition Service, 1990), p. 199.

IXJ-, et aI., op. cit., footnote 15, p. 6-26.

--l
32 ● Performance Standardsfor the Food Stamp Employment and Training Program

local FSAs129 primarily because the relatively small

value of the food stamp benefits received by most

households requires creation of workfare jobs lasting only 7 or 8 hours a week.130 However, the idea

of equating required participation with the value of

the food stamp benefits continues in the FSET

program. As a result, participants are only required

to spend only a minimal time--e.g., about 24 hours

in the District of Columbia-in the program.

Despite its ineffectiveness, the mandatory aspect

of FSET requires a great deal of administrative

effort--40 percent of staff time in FY 1988. By

comparison, employability assessments and direct

provision of employment and training services

accounted for only 18 percent of staff time.131

Assigning the limited FSET funds to a smaller group

of volunteers might be far more effective than the

current approach of spreading the money thinly

across a large group of participants and nonparticipants (who require administrative funds to be

tracked and sanctioned).

Relying on volunteers need not result in State

agencies creaming the most employable work registrants. By giving extra credit for job placements,

wages, and educational improvements for the hard to

employ, FNS could encourage the States to make

extra efforts to attract HTE participants to volunteer.

Would anyone appear if FSET were made voluntary? OTA notes that during 1988, 150,000 food

stamp recipients who were not required to participate did so. This is over half the number (240,000)

who might be enrolled if the States choose to enroll

only the new required minimum of 10 percent. It is

approximately equal to a 6 percent participation rate.

It would seem unreasonable to set a participation

rate for a voluntary program. However, if this option

were chosen, Congress and FNS might want to

monitor participation to insure that it not fall to

minimal levels. Over time, participation rates ought

to grow if the States develop effective programs that

are attractive to food stamp recipients.

OPTION 2: MERGE FSET

INTO JTPA

To reduce administrative costs and increase direct

provision of employment and training services,

Congress could consider merging FSET into JTPA.132

During FY 1988, three-quarters of all FSA’s coordinated some or all of their FSET activities with JTPA.

Some FSAs simply referred clients to JTPA, while

others contracted for specific services such as

employability assessments. Both types of arrangements require using limited Federal funds to support

administrative costs of two separate agencies. And,

for food stamp recipients, the simple fact of having

to go to more than one office maybe discouraging.

As one observer put it, ‘‘the more disadvantaged the

client, the more likely she or he will fall through the

fissures of program fragmentation.’’133

The National Commission for Employment Policy (NCEP), a presidentially appointed body, recently made a similar ‘merge” recommendation to

the President and the Congress. Following an

extensive process of research and consultation at the

Federal, State, and local levels, NCEP recommended that JTPA, JOBS, FSET, and all other

federally funded employment and training programs

aimed at disadvantaged persons be merged into a

single Federal program operated by a single Federal

agency. The rationale for the proposed reorganization included minimizing conflicting regulations,

improving program management, reducing administrative costs, and enabling the “States to deal with

fewer contact points in Washington. ’’134

FSET was created in part because of concern that

food stamp recipients were not receiving the employment and training services they needed from

other agencies. Specifically, the State employment

security agencies which administered the work

registration program provided little assistance to

work registrants and placed only a very small

1zq3Y lg85, 4 ~ems ~Mwor~m ~~e av~ble, Ordy 19 out of 3,ooO local jurisdictions operated such programs. Center on Budget ~d po@

l%orities, Food Stamp Employment and Training Resource Guide (1%.shingtoq DC: 1986), p. 24.

IW.S. Congress, House Committee on Agriculture, House Report No. 955-464, p. 2301.

131*, et al., op. cit., footnote 15, p. ix.

lsz~otherpossibilityw ould &tomerge~ETwithJOBs. This option is apxbecausebotiprograrna areusuWy administered by the me Stite

and local welfare agencies. However, as discussed in section 2, the clients served by JOBS differ from those served by FSET. The FSET clientele is

more similar to that served by JTFA.

133Robert E. Friem “S~te H~Investment Policy: Just on the Horizon,”EntrepreneurialEconomy Review, autumn 1990, p. 23.

l~Johu C. Gartland,~NCEP, letter to the PresidenL Sept. 30, 1991.
Section 5--Policy Options .33

fraction (less

were merged

occur?

than 10 percent) into jobs.135 If FSET

into JTPA, would the same problem

JTPA’s previous performance standards, emphasizing maximum job placements at minimum cost,

caused some local program operators to reduce

services to welfare recipients, focusing on more

employable people.136 However, JTPA’s new performance standards for program years 1990-92137

are designed to increase service to the hard-to-serve

and enhance long-term employability.

If Congress chose to merge the two programs,138

it could encourage service to food stamp recipients

through a contracting arrangement between USDA

and the U.S. Department of Labor (DOL). The

addition of FSET funds would add about 8 percent

to JTPA’s Title II-A budget, which DOL could use

to serve an additional 8 percent of clients, or 96,000

food stamp recipients, assuming the JTPA Title IIa

average cost of $1,646 per participant. There is a

precedent for delivering employment and training

services needed by other Federal agencies through

DOL. In the National Defense Authorization Act for

FY 1991 (Public Law 101-510, approved October

1990), Congress approved the transfer of $150

million from the Department of Defense to DOL to

provide retraining and reemployment services to

laid-off defense workers.139

The number of food stamp clients served under

such an arrangement (96,000) would be much

smaller than the 1990 figure of 1.35 million served

by FSET plus about 120,000 served by JTPA.

However, even if the programs remained separate,

the new 10 percent participation standard can be

expected to greatly reduce the number of participants in FSET to as few as 240,000 people.

135Camil Associates, “Semices to Applicants Required To Be Registered With the U.S. Employment Semice,” Report prepared for the Office of

Policy, Evaluation and Research U.S. Department of Labor, Employment and ‘Mining Adrmms “ “ tratioq Washingbn, DC. 1979.

136Di&smoq et & op. cit., foo~ote 38, p. 194. N~o~y, JTP” sewed we~~ ~ipien~ in propofion to theh representation in the. elQible

population in 1985; however, school dropouts wereunderserved and received little remedial educatioq and clients who were “less job ready” (including

welfare recipients) received less occupational training than those who were more job ready. U.S. Congress, General Accounting OffIce, Job Training

Partnership Act: Sem”ces and Outcomes for Pati”cipants With Di#ering Needs (Washington DC: 1989), p. 3.

137u.s. Department of Labor, Employment and Trq~“ “stratiow “Notice of performance standards for PY 1990-1991,” Federal Register,

vol. 55, No. 72 (Apr. 13, 1990), p. 14016.

138A comprehensive ~tio~ ev~mtion of ~A, involving 30,000 individ~sin ~n@ol ~d expefient groups, is now underway. The K%Xlh,

expected in the summer of 1992, will be useful if Congress considers the possibility of merging FSET and JTPA.

13~.s. conwe55, OT&&fer the cold war: Living with Lo~erDefe~e spending, o~-rrE-524 @C: us. Gm, J~~ 1