E C O N O M I C R E P O R T O F T H E P R E S I D E N T

The first major mandatory training program for welfare recipients was theWork Incentive (WIN) Program of 1967. This program generally providedrecipients of Aid to Families with Dependent Children (AFDC) with jobsearch assistance. In 1988 WIN was replaced by the Job Opportunities andBasic Skills Training (JOBS) program. Created by the Family Support Act of1988, this was a comprehensive welfare-to-work program that gave AFDCrecipients the opportunity to take part in job training, work, and educationrelatedactivities that would lead toward economic self-sufficiency. Thecomprehensive welfare reform legislation passed in 1996 replaced JOBS (aswell as the AFDC) with the Temporary Assistance for Needy Families(TANF) block grant. TANF gives States the flexibility to design their ownwelfare programs, provided they require recipients to participate in work orwork-related activities in exchange for time-limited assistance. Within certainlimitations, States may provide both pre- and postemployment services,including training to help welfare recipients find and keep a job.Government appropriation specifically on training and employmentservices in fiscal 2000 amounted to approximately $5.5 billion a year, a levelthat implies that government-funded training opportunities for U.S. workersare limited relative to those available to workers in other countries. Comparativeresearch done in 1994-95 found that the United States spent only 0.2percent of its GDP on publicly funded employment and training programs,much less than many other industrial countries, including the UnitedKingdom (which spends 0.5 percent of GDP) and Sweden (3.0 percent).Are government employment and training programs effective in improvinglabor market prospects for the disadvantaged? A review of the evidenceprovides grounds for cautious optimism. One general conclusion, however, isthat these programs appear to have been more successful for disadvantagedadults—women in particular—than for disadvantaged youth.Disadvantaged youth are perhaps the most difficult population to help, andsuccess has been limited except in a few highly intensive or particularly well runprograms. One program that has shown noteworthy success is the Center forEmployment Training (CET) in San Jose, the only one of the 13 Jobstartdemonstration programs found to be effective in increasing youth earnings. Anevaluation of this program showed a 40 percent ($3,000) increase in participants’earnings. The Job Corps has also been shown to produce significant gainsin earnings (about 15 percent per year) and to reduce the number of seriouscrimes that participants commit. Both of these programs are considerably moreintensive than most other efforts: enrollees either reside at the program’s facilities(in the case of the Job Corps) or spend many hours per month undergoingtraining (in the case of the CET). Finally, a number of programs have beenspecifically targeted at young single parents on welfare. Some of these programshave produced small short-run gains in employment and educational160 | Economic Report of the President