Good afternoon. My name is David Butler. I am a vice president of the Manpower Demonstration Research Corporation (MDRC), a nonpartisan social policy research organization with offices in New York City and Oakland, California. MDRC has been evaluating welfare reform and employment and training programs across the country for almost three decades. I am here today to share what we have learned about welfare recipients and former recipients who have faced the most difficulty in making a successful transition from welfare to work — the group we call the “hard-to-employ.”

I will briefly address four broad questions in my testimony: First, who are the hard-to-employ, what do we know about their characteristics, and what special challenges does this group pose for program designers and operators? Second, what have we learned from the evaluation research about how to improve employment and other outcomes for hard-to-employ populations? Third, what are the most promising program models and strategies states and localities have implemented for this population since the launch of Temporary Assistance for Needy Families (TANF)? And finally, how might TANF reauthorization address the needs of the hard-to-employ?

My main points are:

• A substantial group of unemployed adults continues to receive TANF benefits or no longer receives them but is unable to maintain stable employment. This group faces significant obstacles, including: basic skills deficiencies, mental and physical health problems, learning disabilities, and similar disadvantages. Moreover, these conditions often co-occur.



 
• The research suggests that many welfare recipients with characteristics that make them hard to employ will need specialized or more intensive services. There is some evidence that targeted strategies can be successful, but very few programs have been evaluated. However, what we have learned suggests that a combination of treatment, support service, and labor market strategies will be necessary to help individuals with serious barriers succeed in employment.



 
• There is cause for optimism. TANF has been an effective catalyst for innovation and experimentation by providing states with adequate funding and encouraging program flexibility. Many promising programs and approaches are being tried all over the country. But if welfare reform is to continue to build on the success it has achieved in reducing caseloads and moving recipients to steady work, designing and testing effective strategies for the hard-to-employ needs to be a priority. We applaud the Administration’s proposal to maintain the TANF funding level and its recognition that treatment services can promote employment and should count towards participation.



 
• However, the three-month limit proposed by the Administration is too restrictive. Ideally, participation in treatment-related services should not have a pre-imposed time limit. Instead, an individual’s progress in treatment should determine the treatment timeframe. TANF programs in Oregon and Utah have taken this more individualized approach to serving people with serious barriers. If the Senate decides that a time limit on treatment participation is necessary, we recommend a limit of between six and twelve months rather than three months. The research suggests that longer thresholds are more likely to yield better treatment and employment outcomes.