This report explores promising welfare-to-work programs and practices of states and localities as they balance supply- with demand-side strategies to help welfare recipients and low-wage workers work their way out of poverty while meeting employers' needs for reliable workers. Chapter 2 describes the new environment created by changes in the welfare system and the labor market that poses challenges for low-skill workers as they struggle to work their way out of poverty. The work patterns of women on welfare are explored in the context of these changes. Chapter 3 looks at the issue of job retention from the perspectives of welfare recipients and employers and identifies lessons learned from a range of model programs. Improving access to and information about support services and federal and state earned income tax credits is discussed. Chapter 4 explores how states and localities are promoting career advancement opportunities to help welfare recipients make the transition from entry-level jobs to higher paying jobs. Chapter 5 focuses on the special needs of welfare recipients with significant personal and family challenges. It explores different approaches to help these hard-to-place individuals develop the skills to move toward unsubsidized employment and reviews experiences of enterprises that have successfully created employment opportunities for them. (Contains 87 endnotes and a 67-item bibliography.) (YLB)