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THE HIGH PERFORMANCE BONUS, working paper 007 Open Access

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The Personal Responsibility and Work Opportunity Act of 1996 authorized payment of a bonus to states with exceptional Temporary Assistance for Needy Families (TANF) programs based on a formula to be established by the Department of Health and Human Services. The resulting High Performance Bonus (HPB) awards have been made for federal fiscal years 1998-2003. This paper reviews the development of the HPB program, explores the underlying data related to employment, identifies certain conceptual, statistical, and administrative problems, and suggests possible improvements. The reliability of HPB data as a source of information on state TANF programs has improved over time, principally as the result of shift of responsibility for performance assessment to the federal government and to use of information from the National Directory of New Hires. The data reveal significant differences across states in patterns of TANF receipt that should be the object of study both as consequences of differences in client populations and specific state program content. Nevertheless, the HPB measures and the NDNH data have quirks that deserve more attention, and efforts must be made to speed the delivery of the outcomes information generated by the HPB system to state TANF program managers and policymakers. The 2001 expansion of HPB performance measures beyond employment outcomes is of doubtful utility and should be reconsidered.

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