In this report, employment retention and advancement under Temporary Assistance for Needy Families (TANF) was examined by reviewing research findings regarding labor market development since 1996. According to the research, most of those moving from welfare to work have found employment in low-wage jobs and experienced frequent job losses and limited upward mobility. The following were among the factors deemed predictive of employment retention among welfare leavers: starting off in higher-paying jobs; working steadily, initially; and finding jobs with benefits. Factors predictive of job advancement included starting off with higher-paying jobs, changing jobs strategically and voluntarily (but not too often), and having or acquiring higher basic skills and postsecondary education or training. The following were among the recommendations offered for federal policymakers: (1) expand TANF to include reducing family poverty and promoting family economic well-being; (2) require that states' TANF plans describe how federal TANF funds and other resources will be used to promote employment retention and advancement; (3) if federal work participation rates are not replaced by outcome-based measures, give states broad flexibility to determine the nature of work activities; and (4) require that federal agencies vigorously monitor state and local implementation of civil rights and employment rights protections afforded under current law. (Contains 31 endnotes.) (MN)