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Employers and Welfare Recipients: The Effects of Welfare Reform in the Workplace

Employers and Welfare Recipients: The Effects of Welfare Reform in the Workplace

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Although employment rates among welfare recipients have risen substantially since the early 1990s, many questions about welfare-to-work efforts remain. What are the employment prospects of the least skilled and least experienced welfare recipients? How well do they perform? Are their wages and benefits sufficient to achieve financial independence over time? In Employers and Welfare Recipients: The Effects of Welfare Reform in the Workplace, Harry Holzer and Michael Stoll draw on detailed employer survey data from four cities (including Los Angeles) to answer these and other questions. The survey focuses on employers¹ willingness to hire welfare recipients, the extent to which they have already done so, and the nature of their experiences with these new employees. It also asks about the demographic characteristics of those hired, the sorts of jobs these employees tend to fill, and their performance in those jobs. In addition to analyzing the survey responses, the authors compare the success these four cities have had in moving welfare recipients into the workforce.

The authors found that the overall demand for these workers is strong, especially in the retail trade sector, among minority-owned businesses, and at establishments located near publictransportation stations and the neighborhoods of welfare recipients. However, the authors also found evidence that employer demand for these workers will diminish significantly during the next economic downturn. If so, improving access to suburban jobs may become a more pressing need. The authors also suggest that local intermediary agencies could become more involved in the job placement process and that local workforce boards and agencies focus on retention and reducing absenteeism as well as on job placement.

This project was supported by PPIC through an External Research Program contract.