A REPORT released today is sending a clear message to states at a critical moment in the reform of the American welfare system: That programs aimed at moving people from welfare into jobs can work. The report, which looked at more than 45 studies conducted over the last 15 years, shows that earnings of welfare recipients went up while governments got back as much as $3 for every $1 invested."We know from a very solid body of research that these programs can be effective," says Judith Gueron, president of the New York-based Manpower Demonstration Research Corporation (MDRC) and senior author of the report, "From Welfare to Work." "We probably know more than we do in almost any other area of social policy." Still, officials in many states consider their options limited. They face enormous budget pressures and welfare case loads that have been rising for the last 21 months. Some 12.8 million people now receive Aid to Families With Dependent Children (AFDC), and the roster is growing by 3,000 children a day. It is a time when states are trying to implement the reforms of the 1988 Family Support Act (FSA) that aims to reach a broader group of welfare recipients than ever before and puts a new emphasis on education and training services, particularly for long-term welfare recipients. That shift under the FSA's Job Opportunities and Basic Skills Training Program (JOBS) requires a more expensive up-front investment and a longer payback period than most programs of the '80s. In those, the focus was on immediately placing in jobs as many as those on welfare as possible. The concern among welfare reform advocates is that current pressures could prompt states to choose that cheaper route which has a faster, but generally lower, payoff period. Though available federal aid is now higher than ever - as much as $1 billion a year - states have to put up substantial resources and guarantee high participation rates to qualify. Though the Work Incentive (WIN) programs studied were cost effective, MDRC found the welfare savings and earnings gains modest and concluded that the programs did not reduce poverty. Long-term welfare recipients had no large or consistent earnings gains. It is that group that the new emphasis on education and training is intended to reach. "It's the new directions that are under a lot of pressure right now," concedes Dr. Gueron. "We do know that low cost programs do not increase employment rates for lon g-term recipients.... So there's a real reason for the more intensive services emphasized in JOBS if you want to reduce long-term dependency." Though the shift is too recent for evaluation, a few WIN programs did include education and training for the most disadvantaged and hold some promise. Particularly noteworthy, says Dr. Gueron, is San Diego's Saturation Work Initiative Model (SWIM), a large mandatory program which offered education and training to long-term welfare recipients who were having trouble getting jobs. The extra help eventually lead to higher earnings. A similar strategy used in a Baltimore program also benefited the most disa dvantaged and helped improve the quality of jobs they got. Much is now up to the states. Unless they put forward plans, tap federal funds, and change the way they administer welfare, the 1988 reform legislation will have little practical effect. The data in the MDRC report should go a long way toward helping in that task, says Kathy Lewis. She is chief of employment programs in California's Department of Social Services and in charge of the state wide Greater Avenues For Independence (GAIN) program which puts a strong emphasis on initial education and training of long-term recipients and places some 3500 welfare recipients in jobs every month. "The report says that the results of the programs [studied] are modest but that they do work," says Ms. Lewis. In her view, the report should also send a message to those restless for immediate results: "In welfare there aren't any quick fixes nor is there any one thing that's a panacea."