Created by the Social Security Act of 1935, the AFDC program provides cash assistance to families with needy children who have been deprived of parental support if a parent is continuously absent from the home, incapacitated, dead, or unemployed. The program is jointly funded by the federal government and the states, with federal funds providing from 50 to about 80 percent of the AFDC benefit costs (55 percent on average) and 50 percent of administrative costs. States administer or supervise the program and set their own benefit levels. In fiscal year 1993, federal and state spending for AFDC totaled $25.2 billion. Since 1968, various federal programs have aimed to help adult AFDC recipients become employed. However, early welfare-to-work programs were faulted for low participation rates, insufficient attention to less employable recipients, and inadequate results in reducing welfare dependency. In 1988, seeking to rectify these program deficiencies, the Congress passed FSA, creating the JOBS program. FSA was to be the first step in transforming the welfare system from one of permanent entitlement to a program of transitional assistance. Specifically, FSA directed the states to make available to JOBS participants a broad range of services and activities including high school or equivalent education, basic and remedial education, education for those with limited English proficiency, job skills training, job readiness activities, and job development and placement. Further, states were required to offer at least two of the following: group and individual job search, on-the-job training, work supplementation, or community work experience. States could also offer postsecondary education. Finally, FSA provided federal reimbursement for child care, transportation, and other work-related expenses and supportive services when necessary (as determined by the state) for participation in JOBS. (See the glossary for further details on JOBS education and training components.) FSA allowed states much flexibility in the design and implementation of their JOBS programs. Programs may emphasize quick movement into the labor force for those who are job-ready, while others may emphasize education and training to increase participants’ employability. However, whatever their emphasis, JOBS programs are required to offer a full range of services. Under JOBS, once a participant is enrolled, the program must assess individual educational, child care, and other supportive services needs, taking into account skills, prior work experience, employability, and family circumstances. Based on this initial assessment, the program develops an employability plan, which specifies the services to be provided and sets an employment goal for each participant, considering individual preferences, supportive services needs, available program resources, and local employment opportunities. To help clients meet their employment goals, FSA encourages programs to draw on existing community services to meet participants’ needs, especially to the extent that they can be obtained at no cost to JOBS. By emphasizing existing services available at no cost, programs can avoid duplication and ensure judicious use of program funds. When JOBS programs find that such services are not available and must be purchased, they may enter into arrangements and contracts with other service providers to obtain them. Commonly used providers of education and training services include Job Training Partnership Act (JTPA) programs, state and local educational agencies, other public agencies, and private organizations (including community-based organizations). FSA mandates participation in JOBS for AFDC recipients between 16 and 59 years old, but provides exemptions for certain individuals. FSA exempts individuals who: care for children under 3 years old (or 1 year old, at state option); work 30 or more hours per week; attend elementary, secondary, or vocational school full-time; are ill or incapacitated; care for a household member who is ill or incapacitated; are in at least the second trimester of pregnancy; or live in an area that is remote from a JOBS program or activity. However, exempt individuals may voluntarily participate in JOBS. In addition, states must spend at least 55 percent of their JOBS funds on specific target groups, including custodial parents under 24 years old with low levels of education or work experience, long-term adult AFDC recipients, and those whose AFDC eligibility is about to expire due to the age of their youngest dependent child. FSA provided $1 billion in federal funds for JOBS in fiscal years 1991, 1992, and 1993, reaching $1.1 billion in fiscal year 1994, and $1.3 billion for fiscal year 1995. These funds are allocated among the states and tribal organizations according to their percentage of the national AFDC population. To utilize the full amount of the allocation available to them, states must meet certain matching requirements. In recent years, most states have not provided sufficient matching funds to take full advantage of the federal resources available to them. In 1992, overall, states used 68 percent of the federal funding available to them. FSA envisioned gradual expansion of JOBS and mandated steadily increasing participation rates for the program. States must meet these participation rates or accept a reduced federal share of JOBS expenditures. This participation rate threshold was 7 percent of the nonexempt caseload in fiscal year 1991, 11 percent in 1992 and 1993, 15 percent in 1994, and 20 percent in 1995. However, many critics remain dissatisfied with this gradual expansion and believe that these requirements do not ensure that JOBS will reach a large share of AFDC households and, thereby, transform the welfare culture. The JOBS program serves a small percentage of the total AFDC caseload because program rules exempt most adult AFDC recipients from participation and because FSA established minimum participation rate requirements. In addition, the characteristics of the large population of adult nonparticipants differ from those of participants in certain key ways. JOBS reaches a relatively small percentage of all AFDC households, despite success in meeting the participation rates called for by FSA. As shown in figure 1, in 1992, most adult AFDC recipients (about 59 percent) were exempt from mandatory JOBS participation. Of those 16 years old and older who were exempt from JOBS, 75 percent were exempt because they were providing care for a child under 3 years old. Adult AFDC recipients are also exempt if, for example, the JOBS program is not offered in the recipient’s local area or if the recipient is in at least the second trimester of pregnancy, incapacitated, or caring for another household member who is ill or incapacitated. Furthermore, even for those who are not exempt under program rules, JOBS participation rate requirements do not ensure that large numbers of adult AFDC recipients participate. In 1992, about 13 percent of all single female heads of households on AFDC, about one-fourth of the nonexempt adult recipients, were participating each month. By contrast, however, about three-fourths of nonexempt adult recipients were not participating. Even if the participation rate requirements were raised dramatically for nonexempt adults, well over one-half of the AFDC caseload would still be exempt from program participation. Some experts believe that welfare-to-work programs will not be effective in transforming the culture of welfare unless they reach a much larger percentage of AFDC households. Participants in JOBS differ from nonparticipants in certain key ways that appear related to aspects of program requirements. The most noteworthy differences include the age of the youngest child and the age of the recipient. Nonparticipants were about twice as likely to have children under 3 years old than were JOBS participants. They were also more likely to be 24 years old or younger. This difference is consistent with JOBS’ exemption of parents or other caretakers of a child under 3 years old. Additionally, a comparison of JOBS participants with the overall AFDC caseload showed that a larger percentage of JOBS participants have fewer than 9 years of education and a smaller percentage have attended college. The difference in education levels may also be explained by the JOBS requirement that targets young parents who have not completed high school. Apart from differences resulting from program requirements, our analysis of program data did not reveal any other significant differences between JOBS participants and nonparticipants. In characteristics such as race, number of children, and prior AFDC history, the two populations appear similar. Beyond the differences that are readily observable, however, nonparticipants may differ from participants in ways that are difficult to quantify. According to JOBS administrators who participated in our discussion groups, current nonparticipants may be less motivated and have impediments that make them harder to serve without extra support and services. For example, some may need treatment for more severe drug and alcohol problems before they can fully participate in an education or training program. Others may have mental health problems or learning disabilities that also need to be addressed. As envisioned under FSA, JOBS programs offer a range of services and tap into available community resources to serve their participants. Our survey data results show that JOBS programs offer most of the education and training components and supportive services described in the act and that JOBS participants are enrolled in a range of activities. For each specific education or training component that participants needed, however, the percentage of programs that had difficulties providing that service ranged from 30 to 70 percent. In these cases, the programs lacked the capacity to ensure that all the participants received education and training services when they needed them. JOBS administrators selected multiple reasons for the programs’ inability to serve all participants. JOBS programs offer a range of components and services drawn for the most part from existing programs in their communities. About one-half of JOBS programs offer all the education and training components described in FSA or all but the work supplementation component. As shown in figure 2, nearly all offer high school/General Educational Development certificate (GED) education; adult basic education; job skills training; job readiness training; postsecondary education; job search; community work experience; and supportive services, including child care. About 30 percent of the programs did not offer English as a Second Language and about one-fourth did not offer on-the-job training. In addition, about 78 percent did not offer work supplementation.