Indiana’s welfare reform’s main provisions are currently organized under three broad headings: 1) new requirements to foster personal responsibility, including a social contract- the Personal Responsibility Agreement (PRA)-; 2) a shift in employment and training services to a “Work First” approach; and 3) special work incentives and supports.

Employment activities: IMPACT participants must spend 8 weeks in job readiness/job search activities. Applicants must register for work at employment office at the time of application.

Family caps: Benefits do not increase for births occurring more than 10 months after first welfare receipts if the child was conceived in a month when the mother was receiving welfare. Exceptions include births due to incest or sexual assault and the first birth to a minor parent.

Financial disincentives/sanctions: See program requirements. IMPACT participants are required to meet education and training requirements. Failure to meet requirements results in elimination of the adult portion of the grant for two months and increases in strictness as noncompliance continues.

Financial incentives: The State disregards child support payments during the first six months after job entry. Resource limit is increased if recipients find employment. The 100 hour rule is eliminated.

Program requirements: Clients are required to sign the Personal Responsibility Agreement. Failure to sign the agreement without good cause can lead to a $90 reduction in monthly AFDC benefits. All welfare recipients are required to submit proof that all children for whom they receive benefits have their standard childhood immunizations up to date. Noncompliance results in $90 monthly sanction until proof is received. Parents of children who do not meet local school attendance standards are required to meet with caseworkers. Continued school absence results in a $90 monthly sanction. All minor parents under the age of 18 must live with a parent, legal guardian or other related adult, or in an adult-supervised supportive living arrangement. Participants in IMPACT must spend at least 20 hours a week in work-related activities. Parents must agree to live in “safe and secure” homes and not use drugs or abuse alcohol. Paternity identification is required.

Time Limits: A lifetime maximum of 24 months of welfare receipt after entry (for mandatory IMPACT participants only). Children of parents who meet the time limit are still eligible for federal support.

To examine the program’s overall design and management at the State level, and day-to-day operations at the local level, and examine individual reform components and the mechanisms for weaving them into a coherent whole.

To monitor change over time, seeking to identify the points at which key milestones, such as moving past the “start-up” phase to a period of “steady-state” operations, are achieved.

41 separate observations of program activities such as prescreening, intake and assessment procedures, orientation sessions, and self-sufficiency planning interviews were conducted.

11 different local welfare offices visited in the eight research sites. First round of site visits occurred between April and June 1996.
A second round of site visits was conducted in the fall of 1998.

While they were on site, interviewers also collected policy manuals and other written documentation to supplement material from interviews and observations.

“The majority of features included in Indiana’s ambitious and comprehensive welfare reform were successfully implemented and fully operational”(vi).

“There were four areas in which implementation was not wholly successful. These areas included: (1) enhanced intake, (2) the school attendance requirement, (3) case management for IMPACT clients, and (4) completely limiting communications about welfare reform provisions with the control group”(vii).

Interim Impact Findings:

“One general finding is that many clients leave welfare fairly quickly with no additional incentives or assistance from the agency”(xi).

“Analysis of early impacts on AFDC outcomes reveals comparatively large negative impacts on average total welfare payments”(xii).

“Impacts for mandatory clients could have several possible sources, including intensified E&T participation, and the shift to a Work First model, and time limits and earnings incentives specific to the Placement task. The weight of evidence thus far points to an invigorated IMPACT program. In particular, process study findings suggest the transition to a Work First approach exerted far more pervasive effects on both staff and clients at the local level than technical provisions such as time limits and earnings incentives”(xiv).

“The reform led to lower fractions of treatment than control families receiving AFDC payments, an effect also concentrated among IMPACT-mandatory clients”(xiv).

“The reform had much smaller effects on the percent of families remaining technically eligible for AFDC- that is, those the State considered to be “active” AFDC cases- than on the percent actually receiving payments...The most likely explanation for this discrepancy is that the reform seeks to encourage work and “make work pay” by allowing clients in the placement track to retain eligibility for AFDC-related child care, Medicaid, and other supportive services even after their earnings exceed the payment standard (and result in a “zero grant”)”(xiv).

“Relatively large impacts on payment receipt, especially for recent applicants, point to a substantial role for welfare reform in Indiana’s impressive recent caseload declines”(xv).

"The State’s employment and training program shifted to a Work First model" (ii).

"Indiana implemented a two-track service model for more and less job ready clients" (iv).

"Some signs suggest time limits’ influence on behavior will grow" (v).

"Indiana implemented personal responsibility agreements (PRA), but the program’s emphasis on parenting responsibilities was not as forceful as its emphasis on work" (vi).

Interim Impact Findings:

"Many recipients subject to the Indiana reform worked and many left welfare over the two-year follow-up period"(ix).

"Welfare reform contributed to increases in employment and decreases in welfare in Indiana. Impacts were concentrated among job-ready recipients without young children" (x).

"Impact patterns suggests employment impacts derive from more rapid job entry" (xiii).

"The Zero-Grant policy dampened impacts on TANF eligibility and slightly increased the accumulation of time on lifetime assistance clocks" (xiii).

"Maintaining employment remains a substantial challenge for most recipients who go to work" (xiv).

"Welfare reform increased the share of income from earnings, but not average total income" (xv).

• Overall, analyses of the survey data suggest the program did not have large impacts on elementary school-age children (those between 5 and 12).
• Welfare reform had no statistically significant impacts on education or health outcomes
• For outcomes involving social behavior and emotional well-being, the study found only one statistically significant impact: the increase in arrest rates for the subset of elementary school-age children who were 10 to 12 years old at the time. It is not clear whether this is a real effect of welfare reform or only a chance artifact of multiple significance tests.
• The program did not affect average household income.
• The program did increase adult's employment, which was accompanied by a slight increase in child care use.

• For all but one of the small number of outcomes available for adolescents, the study found no statistically significant impact of welfare reform. The exception was a small adverse effect on adolescents' school performance

• Indiana implemented a strong work first program.
• The switch to an integrated worker model posed challenges.
• Welfare reform led to increased local control over service delivery and reliance on contracting for services.
• Indiana made ongoing changes to its performance-based contracting process.

• For both the first-year and later cohorts, Indiana’s program produced positive and statistically significant impacts on overall IMPACT participation rates and on rates of participation in each of the three IMPACT activity types.
• Only about 7% of Welfare Reform group members reached the 24 month adult time limit within five years of follow up.
• Compared to their likelihood of reaching the time limit, Welfare Reform group members were twice as likely to have had a family cap birth.
• For the first year cohort, the Personal Responsibility Agreement (PRA) sanctions were more likely to be applied than the family cap or the 24 month limit.

First Cohort
• Indiana's program reduced receipt of TANF and food stamps.
• Indiana's welfare reform program increased earnings and employment rates in each of the follow-up years.
• Welfare reform did not affect total income.
• Welfare reform did not affect health insurance rates for adults or children.
• Indiana's program did not affect reported child maltreatment.

Later Cohort
• TANF payments for the later cohort were larger than the former cohort.
• Indiana’s program increased the average employment rate across the eight follow-up quarters but did not significantly increase earnings.
• Indiana’s program did not produce impacts on income (measured as the sum of earnings, TANF payments, and food stamp benefits).
• Welfare reform may have decreased substantiated child maltreatment reports.

• The economic benefits of welfare reform of families, resulting mainly from increased employment, slightly outweighed the loss of welfare payments and other income.
• Welfare reform benefited tax payers because savings more than offset welfare expenditures.

“To strengthen the reform’s message from the outset, we recommend that local offices adhere to the original design of having a public assistance caseworker hold the enhanced intake separate from the eligibility interview and expand the enhanced intake interview to include a careful review of the PRA with the client”(viii).

“Improved safeguards against exposing control group members to the reform are needed, especially at intake. Currently planned responses include: moving the ICES random assignment module to an earlier stage in applicant processing, assigning workers to specialize in serving control group members in each office, developing more written procedures, providing specialized training, carefully monitoring office procedures and providing ongoing reinforcement of these efforts”(viii).

“As the Central Office develops policies related to the upcoming modifications in the school attendance requirement, it should consider incorporating further policy guidance on verification procedures and on developing and monitoring attendance improvement plans”(viii).

“The State should take steps to strengthen case management. Resources are the key barrier to furthering this goal and increasing staffing is one possible response. If it is not feasible, the State should consider strategies for targeting case management on populations that are most likely to need or benefit from it, such as: former clients returning to welfare, individuals in sanction status, and clients nearing the time limit”(viii).

“As the State implements modifications to its original waiver, it would be beneficial to provide more detailed staff training on the new procedures both at the outset and on an ongoing basis”(viii).

“More attention should be given to providing clients a complete and detailed account of how time limits operate. In order to “bring home the reality” of time limits, additional efforts should be made to remind clients how many months of assistance they have used up (and how many months they have left) at every scheduled appointment with eligibility workers, IMPACT workers, and outside provider staff”(viii).

Impact Recommendations:

“After having done its best to help the most responsive clients achieve self-sufficiency, the State may face greater challenges as it works with the more disadvantaged clients who remain on welfare. On the other hand, recent policy changes increase greatly the number of clients exposed to Work First, time limits, and make work pay provisions. These changes suggest intriguing questions about the future relationship between welfare reform and caseload change, questions that will be addressed in upcoming reports”(xvi).

"Such strategies may represent an important step, but are not in themselves enough, to move a substantial number of welfare recipients to true self-sufficiency. This recognition has impelled many states to invest substantial time and funds in building on the basic Work First framework"(xvi).