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Department of Agriculture

Recommendations and Actions

USDA05: Administer the Employment and Training Requirement for Food Stamp Recipients More Effectively and Efficiently

Food stamp recipients are required by law to register for work and training. They are exempt from this requirement, however, if they are under 18, older than 59, disabled, taking care of dependent children under six or incapacitated adults, or working at least 30 hours per week. Failure to register for work or training can result in disqualification from the Food Stamp Program (FSP), administered by the U.S. Department of Agriculture (USDA). To comply with this requirement, recipients can attend an employment and training program sponsored by FSP or other qualified entity.

Out of 13 million food stamp recipients, about 3.5 to 4.5 million are required to register annually for work and training. By statute, FSP must place at least 10 percent of the non-exempt registrants into a work-training program. Job search and job search training are the predominant components of the employment and training programs.

Total fiscal year 1993 employment and training costs are approximately $245 million, including state matching costs. Federal costs for the program total about $160 million; $75 million of this represents a federal grant for basic operating and administrative costs, distributed to each state by a formula. The remaining $85 million in federal funds is directed to 50 percent matching of administrative or operating costs above the state's portion of the formula-determined share of the $75 million, and to reimburse participants for transportation and dependent care expenses.

Although a primary goal of the FSP is moving food stamp recipients from welfare to work, 1988 USDA research found that the employment and training program administered by the FSP did not increase participants' earnings. As a result, 1988 USDA evaluations concluded that these programs were not effective.

Currently, there are no data on how many participants are actually placed in jobs as a result of this program. Of all the persons that enter the FSP, half leave the program in six months or less and two- thirds leave within one year. Over one-third of recipients who stop receiving food stamps begin receiving them again within one year.(1)

Although many short-term food stamp recipients return to work within three to six months after becoming eligible for benefits, the FSP employment and training program has had no discernible effect on participants' aggregate earnings, probability of finding work, amount of time worked, or average wages.(2) Recipients may have participated in the employment and training program, but they likely would have found gainful employment without the benefit of the program. The program's failure undercuts the goals of the Food Stamp Act work requirements.

Employment and training programs that appear to be more effective than FSP programs are those that are operated by or administered jointly with entities such as Job Training Partnership Act (JTPA) programs, local education, state employment services, and community action agencies.(3) In 1988, these made up over half of food stamp employment and training efforts.

An example of one such program is the $3 billion JTPA program, which applies a case-management approach to job training. This program spends roughly $2,000 to $3,000 per person and provides help before, during, and after food stamp use. It has had a positive impact on employment rates of participants. The JTPA program already is open to individuals eligible for food stamps. Many states use it to fulfill the requirements of the FSP employment and training program. The JOBS program, for recipients of Aid to Families with Dependent Children (AFDC), unlike the FSP employment and training program, targets individuals likely to stay on the AFDC rolls for long periods of time.

Action

Legislation should be enacted to amend the Food Stamp Act to strengthen the work and training requirement and require food stamp recipients to participate in more effective employment and training programs.

States should no longer be required to operate a separate employment and training program. The needs of these recipients could be better served if this requirement were met by referring them to, and requiring them to participate in, other job training programs. This in no way diminishes the food stamp program work requirement. A separate organization to administer food stamp employment and training requirements is not needed. Eliminating it will save the $160 million federal funding currently directed to this program. These funds will then be available for other work training programs. Those recipients truly in need of job training will participate in programs better able to serve their needs as they move from welfare to work.

Implications

States should be in favor of having the administrative burdens associated with this aspect of the food stamp program lifted. This recommendation will not increase the number of individuals eligible for job training programs, because food stamp recipients are already eligible for a variety of job training programs. Although this recommendation actually strengthens the work and training component of the food stamp program, Congress could view the redirection in funding as an erosion of support for food stamp recipient work requirements.

Fiscal Impact

This recommendation will redirect approximately $1 billion over six years to other work training programs as determined by the administration. A change in law will be required to implement this recommendation.

Endnotes

1. Mathematical Policy Research, Inc., "Dynamics of the Food Stamp Program," Survey of Income and Program Participation (Cambridge, MA, January 1993), p. xi.

2. Abt Associates Inc., Evaluation of the Food Stamp Employment and Training Program (Bethesda, MD, June 1990), p. xi.

3. How the Food Stamp Program Works: 13th Edition (Washington D.C.: Library of Congress, Congressional Research Service, November 1992), p. 47.

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