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Evaluating Welfare Reform in an Era of Transition
evaluations. To be able to test differences in policies across areas, a good nonexperimental evaluation requires good data on the individual components of policies; on the characteristics of different areas; and on the individuals in those areas. For many data sets, such as those drawn from administrative records, cross-state comparability is a major data problem that limits the application of these methods (see Chapter 5 for more discussion). Data over time is particularly useful for tracking the effects of changes in policy combining the cross-section and time-series methods, in contrast to using just a pure cross-section method. Nonexperimental evaluations usually rely at least in part, on data collected for purposes other than the study of interest, while data collection for experimental studies is usually designed specifically for the study, and may not be ideally suited for use in some cases. Finally, sample sizes are critically important in making reliable inferences on the subpopulations affected by the particular individual component in question.
Estimating the Effects of Detailed Reform Strategies
The effects of detailed strategies, such as different types of work and employment strategies, different time limit structures, different sanctions rules, and other such variations are important parts of the welfare reform evaluation effort for certain audiences, as discussed in Chapter 3.
For the evaluation of alternative detailed strategies, randomized experiments are generally the strongest evaluation methodology.14 Macro and other feedback effects, for example, are unlikely to be large when only a detailed strategy is altered within a particular broad component and within a given overall welfare structure. Entry effects are likely to be smaller than those that follow the introduction or deletion of a broad reform component, although reforms that markedly affect the welfare experience may have entry effects.15
Generalizability to different environments and different populations is likely to remain a problem when conducting experiments to learn the effects of particular detailed strategies. Typically, experiments about strategies are quite localized, conducted at the local office level or in one or only a few sites, and usually only on particular populations (e.g., only on the recipients on the rolls at a particular time in the business cycle or only on applicants). This problem could be reduced significantly if sufficient numbers of experiments in different areas, at different points in the business cycle, and on different populations (recipients,
See U.S. General Accounting Office (1999b) for a review of experimental results on a comparison of rapid employment and education approaches to work mandates in welfare.
The magnitude of entry effects largely depends on whether the reform in question would markedly change the desirability or undesirability of being on welfare in the first place. A shift from a education strategy to a work-first strategy, for example, has the potential to significantly reduce the desirability of welfare to many recipients.