An evaluation identified the separate effects that the Massachusetts Department of Public Welfare's Employment and Training Choices Program (ET) and the healthy Massachusetts private economy have had on welfare caseloads. The analysis was limited to the Aid to Families with Dependent Children (AFDC) portion of the ET program. Regression equations were developed that explained the welfare caseload as a function of the employment level in the state's economy and as a function of ET program activity. Findings were that ET is successful because it removes barriers to labor market participation; both ET and the economy contributed to the sizable decline of the AFDC caseload; ET could never have achieved its level of success without the concurrent economic success; despite the role of the economy, it is still easier for state government to reduce the caseload by increasing ET participation than by raising the employment rate; trade, service, and finance, insurance, and real estate employment had a greater impact on the caseload than did employment in other sectors; and ET will have saved taxpayers at least $150 million through the end of fiscal year 1988. (An appendix describes in detail the regression equations and how they were developed.) (YLB)