Initial Synthesis Report of the Findings
from ASPE’s “Leavers” Grants

Prepared by
Gregory Acs and Pamela Loprest
The Urban Institute
2100 M Street, NW
Washington, DC 20037
January 4, 2001

This report is available on the Internet at:
http://aspe.hhs.gov/hsp/leavers99/synthesis01/

This project was funded by the US Department of Health and Human Services, Office of the Assistant Secretary for Planning and Evaluation under task order number 8 under contract HHS-100-99-0003. The authors would like to thank Tracy Roberts for excellent research assistance. The views expressed in this report are those of the authors alone and do not necessarily reflect the views of The Urban Institute or its sponsors.

Contents

Abstract

Chapters:

1. Introduction
2. Leavers Studies in Context: Policy and Economic Environment and Characteristics of Welfare Leavers
3. Employment and Earnings
4. Income and Poverty
5. Program Participation
6. Material Hardship and Well-Being
7. Child Care
8. Conclusions

Appendices:

1. Methodology
2. ASPE-Funded Leavers Reports Included in this Review

List of Tables

• Table II.1: State Policies. 1997
• Table II.2: Economic Characteristics of States, 1997
• Table II.3: Characteristics of TANF Caseloads: July - September 1997
• Table III.1: Employment of Single-Parent Welfare Leavers: Administrative Data Findings
• Table III.2: Employment of Welfare Leavers: Comparison of Administrative and Survey Findings
• Table III.3: Mean Earnings of Employed Single-Parent Leavers: Administrative Data Findings
• Table III.4: Hours and Wages of Welfare Leavers: Survey Findings
• Table III.5: Employer Sponsored Benefits of Welfare Leavers: Survey Findings
• Table IV.1: Income of Welfare Leavers: Survey Findings
• Table IV.2: Leavers' Income from Private Sources: Survey Findings
• Table IV.3: Poverty Among Welfare Leavers: Survey Findings
• Table V.1: Percent of Single-Parent Leavers Returning to TANF: Administrative Data
• Table V.2 : Percent of Leavers Returning to TANF: Survey Data
• Table V.3: Percent of Single-Parent Leavers Receiving Food Stamps: Administrative Data
• Table V.4: Percent of Leavers Receiving Food Stamps- Survey Data
• Table V.5: Percent of Single-Parent Leavers Receiving Medicaid: Administrative Data
• Table V.6: Percent of Leavers with Health Insurance by Coverage Type: Survey Data
• Table V.7: Percent of Leavers Receiving Other Sources of Income: Survey Data
• Table VI.1: Leavers' Experience of Material Hardship: Survey Data
• Table VI.2: Overall Current Well-Being Relative to Before Leaving TANF: Survey Data
• Table VII.1: Child Care Arrangements of Employed Leavers: Survey Data
• Table VII.2: Paying for Child Care: Survey Data
• Appendix Table A1: Methodology
• Appendix Table A2: Administrative Data
• Appendix Table A3: Survey Information

Endnotes

Abstract

This report summarizes results from eleven studies of former welfare recipients funded by the Department of Health and Human Services, Office of the Assistant Secretary for Planning and Evaluation. The studies include administrative and survey data on the well-being of families who left welfare. Efforts were made to have these studies use comparable measures to facilitate cross-study comparisons.

This synthesis focuses primarily on economic well-being. It includes information on welfare leavers' employment and earnings, income and poverty status, public program participation, material hardships, and child care use. The results of the summary show a number of common findings across these study areas. Broadly speaking, among families leaving welfare, about three out of five work at any given time after exiting, and about three-quarters have worked at some point within a year of leaving welfare. When leavers work, they usually work full-time and earn $7-$8 dollars an hour. On average, working leavers make about $3,000 a quarter, and leavers' family incomes hover around the poverty line. A significant minority of leavers return to TANF in the year after initially exiting. Over one-third of leavers receive food stamps and about 2 in 5 have public health insurance coverage during the fourth quarter following their exit from welfare. Finally, many leavers experience hardships, such as not having enough food to eat, but in general they do not experience these hardships more frequently than when they were on welfare.

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I. Introduction

Since passage of the Personal Responsibility and Work Opportunity Reconciliation Act (PRWORA) in 1996, ending "welfare as we know it" and replacing it with the Temporary Assistance to Needy Families (TANF) block grants to states, the federal cash assistance caseloads have dropped by 50 percent, from 4.4 million in August, 1996 to 2.2 million in June, 2000. There is concern at the federal, state, and local levels about the well-being of the unprecedented number of families that have left welfare:

• Are leavers holding down steady jobs?
• Do they have the financial wherewithal to provide for themselves and their children?
• Are they and their children suffering hardships from hunger to homelessness?

To help address these questions, the US Department of Health and Human Services Office of the Assistant Secretary for Planning and Evaluation (ASPE) provided funding to 10 states and three large counties to conduct studies of families that have left the welfare rolls. Here, we review and synthesize selected findings from the 11 ASPE-funded leaver studies that have submitted interim or final reports as of October, 2000, as well as an early ASPE-funded study from Wisconsin.⁽¹⁾ This initial synthesis report will be followed by a more comprehensive report in Summer 2001 which will report on survey findings from additional sites not included here.

What Are the ASPE-funded Leaver Studies and How are they Different From Earlier Studies?

A host of states and policy researchers have examined the well-being of families leaving welfare in the post-reform era.⁽²⁾ These studies vary widely in the populations they study, how they define a welfare leaver, the outcomes which they examine and how those outcomes are measured, and in their methodological rigor. Consequently, it is difficult to draw broad inferences about the status of TANF leavers from them. In order to obtain a broader national picture of how welfare leavers are faring in the post-reform era and to facilitate cross-state comparisons, ASPE awarded grants in September, 1998, to ten states and three large counties to conduct leaver studies under a set of common guidelines. The studies we review here are based in the following locations: Arizona, the District of Columbia, Florida, Georgia, Illinois, Missouri, New York, Washington, Cuyahoga county (Ohio), Los Angeles county (California), and a consortium of San Mateo, Santa Clara, and Santa Cruz counties (California). We also include administrative data findings from Wisconsin which conducted its leaver study with other ASPE funding.⁽³⁾

While each study has unique elements, ASPE has worked with its grantees to encourage them to report results using comparable definitions, for comparable populations, and comparable post-exit intervals. ASPE has developed a set of common measures for reporting findings from administrative data. Further, ASPE has encouraged researchers to ask similar questions in their surveys. Finally, ASPE provided substantial amounts of technical assistance to its grantees to ensure that they followed rigorous methodological standards. In general, the ASPE-funded leaver studies follow these guidelines:

• They focus on cohorts of leavers, defined as all families that stopped receiving welfare during a particular quarter. In most cases, a family had to remain off welfare for two consecutive months in order to be considered a leaver. Similarly, ASPE encouraged its grantees to present at least some findings for single parent families.
• For each cohort of leavers, the studies use administrative records to examine leavers' subsequent use of cash assistance under TANF and their participation in the Food Stamp and Medicaid programs. Some studies have broader administrative data on leavers' participation in additional social support programs, such as child care subsidies, as well as data from state child welfare agencies.
• Almost all studies link their administrative program data with data on employment and earnings from the state's Unemployment Insurance system.
• The studies supplement their administrative data using surveys of TANF leavers. Generally the survey samples are drawn from a single cohort of leavers. These surveys provide richer information about families than can be garnered from administrative data.

Note that these leavers studies are not rigorous evaluations of welfare reform. Rather, they are useful tools for monitoring the well-being of families that have received TANF and have left the rolls. They can help policy makers identify the problems that families who have left welfare are facing. The ongoing capacity built by states and the research community will provide a baseline for formulating and evaluating future reforms.

Issues in Comparing and Synthesizing the ASPE-funded Leaver Studies

Even with all of ASPE's efforts to increase comparability, there remain important differences across the ASPE-funded leaver studies that should be kept in mind when comparing them and drawing general conclusions from them. First, the status of welfare leavers is likely affected by the welfare policies states have adopted, the economic opportunities prevailing in the states, and even the characteristics of welfare recipients themselves. Second, the leaver studies do not all focus on the same time period. For example, some studies focus on leavers from the late 1998 while others examine leavers from late 1996/early 1997. In addition, the survey components of the leaver studies covered different periods of time after leaving. For example, one leaver study interviews leavers over two years after exit from welfare while others conduct interviews six months after exit. Third, although the survey instruments generally gather similar information, each was developed by a separate team of researchers. Each survey focuses on topics of particular interest in a particular state or locality, leading to differences in measured outcomes. Finally, there are some small variations in how the studies define leavers and the types of leavers studied.⁽⁴⁾⁽⁵⁾

Synthesis

We begin our synthesis of ASPE-funded leaver studies by discussing differences in the policies states have pursued, their economic climate, and the demographic characteristics of their welfare populations. We then discuss the findings from the leaver studies focusing on:

1. the employment and earnings of leavers;
2. leavers' income and poverty status;
3. leavers' program participation;
4. the hardships they face; and
5. issues relating to child care for leavers.

While many studies report administrative data findings from multiple cohorts of welfare leavers, we focus on the most recent cohort, especially when there are comparable survey data available for that cohort. Interestingly, we find few differences in outcomes across early and late cohorts within the same study area.

When we look across locations, we find that although there are outliers in most measured outcomes, there are a surprising number of common findings in the ASPE-funded leaver studies. Broadly speaking, among families leaving welfare, about three out of five work at any given time after exiting and about three-quarters have worked at some point within a year of leaving welfare. When leavers work, they usually work full-time and earn $7-$8 dollars an hour. On average, working leavers make about $3,000 a quarter. Further, while few of the studies reviewed here report leavers' incomes, those that do find that the average leaver's income hovers around the poverty line. The studies also show that a significant minority of leavers return to TANF in the year after initially exiting. In addition, over one-third of leavers receive food stamps and 2 in 5 adult leavers have public health insurance coverage in the fourth quarter after exiting welfare. Finally, many leavers experience hardships, such as not having enough food to eat, but in general they do not experience these hardships more frequently than when they were on welfare.

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II. Leavers Studies in Context:
Policy and Economic Environment and
Characteristics of Welfare Leavers

Differences in states' welfare policies, their economies, and the demographic characteristics of recipients themselves all may affect the outcomes of welfare leavers. Before comparing and contrasting the status of welfare leavers across the twelve studies reviewed in this initial synthesis report, it is important to understand the environment in which these families make their decisions to leave welfare. Because there are so many factors contributing to the well-being of leavers it is difficult to ascribe differences in outcomes across studies to any specific difference in context. In this initial synthesis report, we cannot take all these contextual differences into account simultaneously; we only note them as they come to bear on comparisons across studies.

State TANF Policies

Under TANF block grants, states have substantial flexibility in determining the length of time families can receive cash assistance (time limits), the penalties for not complying with program rules (sanctions), and the generosity of cash grants as well as how benefits are reduced as a family moves from welfare to work. First, consider time limits. While none of the studies reviewed here include families whose benefits have already expired,⁽⁶⁾ families subject to shorter time limits may feel pressure to leave welfare sooner than families that are years away from exhausting their benefits. Conversely, leavers who have nearly exhausted their benefits may be more reluctant to return. Out of the 12 sites, seven focus on leavers who are subject to the federal 60 month (5 year) life time time limit on benefits as of 1997 (see Table II.1). Georgia and Cuyahoga county have shorter life time limits-48 and 36 months, respectively.⁽⁷⁾ And Arizona, Florida, and Illinois all have intermediate time limits, not only restricting the total number of months a family can receive benefits but also prohibiting a family from receiving their life time allotment over a single time period. For example, in Arizona, families can receive benefits for 24 months in any 60 month period.

Next, consider states' sanction policies. In general, states impose tiered sanctions, beginning with less severe sanctions at first and escalating penalties for repeated instances of non-compliance. The states conducting leaver studies reviewed here tend to have less severe sanction policies than other states. Note that leavers who were sanctioned off the rolls may have a particularly hard time after exiting welfare and may return to TANF at higher rates as some sanctioned leavers come back into compliance with program requirements and rejoin the TANF rolls. Table II.1 shows the initial and maximum sanction in each of the ten states covered by the leaver studies. Focusing on the most severe sanction, we see that five of the ASPE leaver studies (Arizona, Florida, Georgia, Illinois, and Cuyahoga county) are based in states that impose full-family sanctions, removing the adult unit head and the children from the TANF rolls. Further, Wisconsin not only imposes a full-family sanction, but it is also a lifetime sanction; families that reach this point can never come back into compliance and return to cash assistance in Wisconsin.

Finally, consider differences in TANF generosity. Table II.1 shows the maximum TANF benefit a family of three can receive and the earned income disregards prevailing in the ten states covered by the ASPE leaver studies. California -- the site of both the Los Angeles and San Mateo studies -- clearly has the most generous policies, with a high maximum benefit and large earnings disregards while Wisconsin has high benefits but no earnings disregards. Cuyahoga county and Florida have modest benefits but generous earnings disregards, and New York and Washington have high benefits and earnings disregards that are slightly more generous than average.

While we have not reviewed every aspect of states' TANF policies (for example, we have ignored work requirements and diversion policies ⁽⁸⁾), we can make some general observations about the policy context in which these 12 ASPE leaver studies are based. For example, California (LA and San Mateo studies), New York, and Washington generally pursued policies that would be expected to produce lower exit rates from welfare but higher incomes for those families that do leave. Conversely, Arizona and Georgia may move families off the welfare rolls faster but their leavers may face more difficulties. Finally, other studies are based in states that pursue a mix of policies that are likely to have offsetting effects on the outcomes of leavers-for example, Cuyahoga county has strict time limits and sanctions but very generous earnings disregards.

Economic Context

One would expect that when jobs are plentiful and wages are high, welfare leavers will generally fare better than during lean economic times. Table II.2 shows the 1997 unemployment rates and median incomes in the states in which the leaver studies we review were conducted. Note that we report state averages and some of the leaver studies focus more narrowly. For example, the economic conditions in Ohio may not necessarily reflect the conditions in Cuyahoga county.

Overall, we find that Wisconsin had both the lowest unemployment rate (3.7 percent) and the highest median income at $43,132. Florida had a low unemployment rate at 4.3 percent, but its median income is also among the lowest at $32,455. In contrast, the District of Columbia had both a relatively high unemployment rate (8.9 percent) and low median income ($32,382). Thus, it is clear that economic conditions vary considerably across the sites conducting the leaver studies reviewed here.

Characteristics of Welfare Recipients

Differences in the personal characteristics of welfare recipients and welfare leavers also must be considered when comparing findings across leaver studies. Indeed, states whose welfare caseloads are markedly different may well produce leavers with very different characteristics. Thus part of any difference in outcomes across sites may be due to differences in leavers themselves. Further, states likely structure their welfare policies with their welfare populations in mind-for example, a state with a high proportion of high school drop outs may emphasize work readiness programs-and this too may affect the status of leavers.

Table II.3 highlights some differences in the characteristics of welfare recipients across the 12 study sites we examine here. First consider the ages of adults heading families on welfare. In 1997, the age distribution of case heads was fairly similar across our 12 study areas: in general about 6 percent of cases were headed by teenagers, more than 40 percent were headed by adults 20 to 29 years old, and more than 50 percent by adults age 30 or older. The exceptions are California (covering both LA and San Mateo counties) which has a disproportionate number of young and old case heads and Wisconsin which has a disproportionately low share of leavers age 30 and over.

Next, consider differences in the number and ages of children across our study areas. In general, three quarters of families on welfare have two or fewer children (see table II.3). The exception is Arizona, in which 38.5 percent of welfare families have three or more children. About 10 percent of families have an infant across our study locations, and about 40 percent have youngest children who are school age (6 or older). Arizona and Wisconsin are slight exceptions, with over 17 percent of welfare families containing an infant. And Arizona, Wisconsin, and California have a lower proportion of cases in which the youngest child is school-aged than elsewhere.

Finally, we examine educational difference among welfare recipients across our study areas and find only minor differences between 11 of our 12 study sites (table II.3).⁽⁹⁾ The share of welfare recipients with less than a high school degree ranges from a low of 44.2 percent in Arizona to a high of 54.0 percent in DC and Florida.

Overall, there are few significant differences in the characteristics of welfare caseloads across our locations. Nevertheless, it is important to keep in mind even small differences in caseloads, caseload declines, and the characteristics of leavers when comparing the status of leavers across studies.

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III. Employment and Earnings

A central goal of welfare reform is moving families from welfare to work and, ultimately to self-sufficiency. Eleven of the ASPE-funded leaver studies included here use administrative data from their states' Unemployment Insurance systems to examine the employment and earnings of TANF leavers in the months and years following exit. In addition, five of the studies in this initial synthesis report also use surveys of leavers to examine employment, wage rates, and job characteristics of leavers. While surveys rely on self-reported information, they garner more detailed information than is available through administrative data systems.⁽¹⁰⁾

It is important to note that administrative data likely under represent the amount of work performed by TANF leavers. First, leavers who work across state lines or move to another state entirely will not appear in a state's UI system. Second, not all jobs are reported to a state's UI system-for example, leavers who are self-employed or who work in certain jobs in agriculture or in the federal government are not included in UI data systems. And finally, leavers who are domestic service workers (like nannies or housecleaners) may not appear in the UI system because their employers fail to report them. Thus, some of the leavers who appear to have "never worked" in administrative data may actually be bringing in earnings in some form. Further, some non-working leavers may well have a working spouse or partner.

Across the eleven studies using employment data from state UI systems, we find that slightly over half of all leavers work in the first quarter after exiting welfare. As table III.1 shows, the first quarter employment rates are tightly bunched, ranging from a low of 47 percent in Los Angeles to a high of 64 percent in Georgia.

Over time, employment rates of leavers could rise as more leavers find jobs or they could fall as employed leavers encounter difficulties and lose their jobs. Interestingly, table III.1 shows that employment rates do not change much over time. Indeed, the median employment rate reported in these studies is 54 percent in both the first and fourth post-exit quarters. Wisconsin has the highest fourth quarter post-exit employment rate (62 percent) and New York, the lowest (48 percent).

While slightly over half of all leavers work in any given post-exit quarter, it is not uncommon for leavers to cycle in and out of jobs; consequently, the share of leavers who ever worked over the year after exit is considerably higher and the share who worked in all four quarters is considerably lower. Eight of the eleven studies report the share of leavers who worked in any of the four post-exit quarters. They find that about 70 percent of leavers worked in at least one quarter. In six out of eight studies over 70 percent worked (with a high of 75 percent in Wisconsin); 67 percent worked in San Mateo county and 62 percent worked in New York. Five of the eleven studies report the share of leavers who worked in each of the four post-exit quarters. They find between 35 and 40 percent of leavers worked in all four quarters.

Although there are some methodological differences between studies-for example, Los Angeles and Cuyahoga county require a leaver to have at least $100 in earnings to be considered working while others require only $1-these differences do not account for much of the meager variation across studies. Indeed, Cuyahoga county consistently reports high employment rates despite having a higher threshold for employment. Thus overall, these findings from administrative data suggest that the majority of welfare leavers work or have worked since exiting, but nearly three out of ten have never worked in the year following exit.

As of mid-October, 2000, five jurisdictions had submitted findings from surveys of TANF leavers where they asked the leavers themselves about their current employment status. The responses of leavers generally refer to employment about 6 months to a year after exit. Table III.2 compares these self-reported employment rates with fourth quarter post-exit employment rates computed from administrative data. The surveys consistently find higher employment rates than those reported in UI wage records; for the most part, they are about 7 percentage points higher. Illinois' survey presents some instructive information. In its administrative records, Illinois finds that 30 percent of leavers never worked over the first four post-exit quarters. In its survey, Illinois finds that only 15 percent of leavers say they have never worked in the 6 to 8 months since exiting TANF.

Beyond employment, it is also important to examine the quality of the jobs held by TANF leavers. The most basic measure of job quality is how much the job pays. Table III.3 shows the quarterly earnings of employed TANF leavers based on UI wage records reported in ten leaver studies. These records include earnings information on all reported jobs a leaver has held during the quarter. The earnings of employed leavers during the first post-TANF exit quarter range from about $2,100 to about $3,500.⁽¹¹⁾ Over time, average earnings rise, especially in states with lower average earnings; during the fourth post-TANF exit quarter, earnings range from about $2,400 to about $3,600. Note that these figures represent total earnings over a three month period. The data do not provide information on the number of weeks or hours leavers actually worked to achieve their earnings.

Surveys of welfare leavers obtain information on the hours worked and wages of leavers (see table III.4). All five surveys show that employed leavers work close to full-time on average, with mean weekly hours ranging from 35 to 39 and median hours (when reported) reaching 40. Average wages range from $7.52 to $8.74 an hour. If a leaver works 40 hours a week and earns $7.50 an hour, she would earn $3,900 in a quarter providing that she worked all thirteen weeks in the quarter. This is higher than the earnings reported in the UI wage records indicating that some leavers move in and out of jobs and are not continuously employed.

In addition to monetary pay, employed leavers may receive non-cash employee benefits through their jobs. Three of the surveys ask explicitly about job-related benefits, and unlike employment and cash earnings, there is considerable variation across the studies. Table III.5 shows that the share of leavers with health insurance is 32 percent in the District of Columbia and 36.0 percent in Washington state. In Missouri, 53 percent of working leavers are offered employer-sponsored health insurance although some decline coverage. The share with paid vacations runs from a low of 31 percent (Washington state) to a high of 62 percent (DC), and the share with paid sick days ranges from 28 percent (Washington state) to 50 percent (DC). Finally, 46 percent of working leavers have retirement benefits in DC compared to 21 percent in Washington state.

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IV. Income and Poverty

Income and poverty status are important indicators of the well-being of welfare leavers. Yet few leaver studies fully examine the income of leavers. There are several important reasons for this. First, most leaver studies focus on the first year after leaving-very few leavers are likely to achieve economic security in such a short period of time. Indeed, most leavers will have low incomes. Second, income is very hard to measure accurately. Perhaps the most reliable source of income data are tax records; such records are highly confidential and are rarely available for research purposes. Most information on income comes from survey data, but to obtain fairly accurate income information, the survey generally must devote a great deal of time to ask about each possible income source and then obtain the amount. Few of the leaver study surveys could afford to devote this level of time to obtaining income data. Finally, income is only one measure of well-being, and many surveys ask about explicit hardships leavers face. We discuss this hardship information in a later section.

Four of the leaver studies reviewed here obtain data on income through surveys (Arizona, Illinois, Missouri, and Washington state). Table IV.1 shows that mean monthly incomes range from $964 in Illinois to $1,427 in Missouri. ⁽¹²⁾ It is important to note that Illinois and Washington report monthly income six to eight months after exit while Missouri examines income two to three years after exit. Further, Illinois' survey simply asks respondents to estimate their monthly incomes while Missouri's survey asks a detailed set of questions about income sources and amounts. Finally, Missouri includes two-parent families in its findings. Thus, these factors may help explain why Missouri leavers appear to have higher monthly incomes.

Since about three out of five leavers are working, it is not surprising to find that 60 to 65 percent of leavers in the three surveys that ask about the sources of their income report having income from earnings (table IV.2). In addition, leavers may have access to the earned income of other household members. In Washington state, 21 percent of leavers have access to another's earnings, and in Missouri and Illinois, 86 and 80 percent of leavers, respectively, are in families in which someone is earning money (see table IV.2). Another source of income for leavers is child support; between 11 and 31 percent of leavers receive child support. Finally, leavers may receive support from public programs like SSI, and some may have returned to TANF. We examine the use of public programs later.

Regardless of the sources of their income, the time period over which their income was measured, or the rigor with which they were asked about their incomes, all leaver studies that examine income show that leavers' incomes hover near the poverty line. Missouri and Washington explicitly examine the poverty status of leavers and both find that 58 percent of leavers have cash incomes that leave them in poverty (table IV.3). Note that Washington's study indicates that 42 percent of leavers are not poor 6 to 8 months after leaving welfare-the same share reported by Missouri over two years after its leavers exited welfare.

Missouri's study also shows that almost nine out of every ten leavers have incomes below 185 percent of the federal poverty line. Low income leavers may be eligible for various in-kind public supports such as food stamps, WIC, child care assistance, and Medicaid or other public health insurance programs all of which can enhance their well-being and are not included in these poverty measures. In addition, low-income working leavers can receive cash support from the Earned Income Tax Credit, currently the largest program supporting low-income families in the US.

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V. Program Participation

A goal of welfare reform is to reduce families' dependency on cash assistance and make that dependent period temporary. Part of the measure of success for those who exit TANF is the ability to move toward self-sufficiency in caring for their families. As families strive toward this goal, some government benefits remain in place to aid in the transition off cash assistance. These include food stamps, Medicaid, and child care assistance. Families who have low enough incomes and meet other program requirements continue to be eligible for these benefits. In this section we address the extent to which former TANF/AFDC recipients continue to receive these benefits over time.

For some who exit TANF, the transition is not permanent, and they return to the cash assistance roles. While there has always been a percentage of families who move on and off cash assistance, examining those returning to TANF takes on increased importance in light of the time limits on benefit receipt. While none of the leavers in the areas and cohorts we examine here have reached Federal or state time limits during the study time period, returning to TANF means further depleting their limited benefit time. In this section, we first examine returns to TANF and then examine participation in other government benefit programs.

Returns to TANF

Despite the relatively high employment rates shown earlier, in most of our study areas a sizeable minority of TANF exiters return to cash assistance in the first year after leaving. In eight out of eleven areas, more than 15 percent of former recipients were again receiving TANF at the end of the first year (table V.1).⁽¹³⁾ There is significant difference in the rate of returns across study areas. The highest rates according to administrative data were in Cuyahoga County, with 28.7 percent, and Missouri with 20.5 percent of leavers returning to cash assistance. San Mateo County had the lowest percent returning at 8.0 percent and Florida had the second lowest at 11.0 percent.

Despite some differences in return rates, in general, the pattern of returns to TANF is somewhat similar across study areas. The number of leavers who have returned to TANF after just one quarter, ranges from a low of 6.7 percent in San Mateo to 20.4 percent in Cuyahoga County.⁽¹⁴⁾ This percentage jumps up by the end of the second quarter and remains relatively steady for the rest of the year. While a few areas have slight declines in receipt over time from the second to the fourth quarter, in general over the first year we do not observe declining returns to TANF.

There are indications that at least in some areas, these steady numbers of TANF recipients masks a fair degree of "cycling" -- families returning to TANF and then leaving again. Eight of the eleven study areas report the percentage of families who ever received TANF in the year after initially exiting. These numbers range from 18 to 35 percent. A much higher percent of leavers ever returned to TANF over the course of the year than are on at the end of the year. This indicates a degree of movement on and then off again. For example, Arizona reports that 27.7 percent of leavers in the study cohort returned to TANF over the next year, although only 15.5 percent were on in the twelfth month after leaving. This means almost half of those who returned to TANF had left again.

One difference across the eleven study areas is the time period covered. At first it seems that earlier cohorts of leavers may have greater return rates because some of the highest returns are in areas with the earliest cohort periods, Cuyahoga County (3Q96) and Wisconsin (July 1995). However, some of the more recent study periods (District of Columbia in 4Q98 and Arizona in 1Q98) have higher returns than other study areas with earlier cohorts. In fact, the levels of returns are different across areas with similar study periods. This highlights that returns to welfare are determined by a number of factors, so cross-study comparison is difficult. However, within the few studies that report multiple cohorts, no clear pattern of returns over study cohorts is observed.

Finally, using the little information we have, it is interesting to examine how return rates vary by the time limit policy in these areas. As we noted earlier, shorter time limits may encourage families to leave earlier than in other areas, possibly families that are less "prepared" to make the transition. Illinois had a 24 month time limit during the study period and had high returns and San Mateo had a 60 month time limit with low returns.⁽¹⁵⁾

The previous results are all from administrative data sources. For a number of reasons this source has advantages over survey data for examining program participation. Survey data can have errors due to faulty respondent memory and misinterpretation of questions. However, survey data on program participation does have the advantage of capturing benefit receipt for those who have moved out-of-state and no longer appear in the original state's administrative data. Four studies report results on returns to TANF from their surveys of former recipients (table V.2). These results are generally comparable to the administrative data results for the same time period. They reinforce that while a significant percentage return to welfare, many who return exit again in the time period prior to the survey (which ranges from 6 to 30 months after exit). Of all the surveys, Missouri allows the longest-term picture of returns to TANF, two and a half years after the initial exit. At this time, 14 percent of leavers report they are back on TANF in Missouri.

Food Stamp Participation

Food stamp benefits can add a significant amount to total income for a low-wage worker. Families with incomes below 130 percent of the federal poverty line can qualify for benefits. Generally, TANF recipients are also eligible for food stamps. Only three of our studies report food stamps receipt prior to leaving TANF, but all show over 80 percent participation.

Food stamp receipt drops significantly after exiting TANF. In seven out of the eight study areas reporting food stamp benefit receipt in the quarter after exit, less than half of leavers are receiving food stamps. The actual percentages range from 57.2 percent in Missouri to 8.8 percent in San Mateo County.⁽¹⁶⁾ These low rates are at least in part due to some recipients no longer being eligible for food stamps. Unfortunately, without better income information we cannot assess to what extent this is the reason for the decline in receipt.

Over the first year after exit, five of the eight study areas show declines in food stamp receipt although only three are large. Those three areas, Florida, Missouri, and Washington, had the largest receipt rates in the first quarter after exit. By the end of the first year after exiting welfare, receipt of food stamps is between 33 and 40 percent in 6 out of 8 areas. Only San Mateo county and New York are exceptions.

These numbers conceal a more extensive decline in food stamp receipt among those who have permanently left TANF because they include those who have returned to TANF and are likely receiving food stamps. Three studies (District of Columbia, Illinois, and Florida) report food stamp receipt for continuous leavers, those who did not return to TANF (not shown in table). ⁽¹⁷⁾ The percentages of continuous leavers receiving food stamps one year after leaving TANF are considerably lower than the overall percentages receiving food stamps. For example, in Florida 35 percent of all leavers are receiving food stamps one year after leaving, compared with only 21 percent of continuous leavers. The pattern is similar in Illinois, 33 percent compared with 21 percent, and in District of Columbia, 38 percent compared with 23 percent.

A few studies report the percentage of leavers who received food stamps at any point over the year after exit. These numbers are significantly higher than the percentage receiving in any of the individual quarters. For example, 66.5 percent of Arizona leavers received food stamps at some point in the year after exiting TANF, but only between 35 and 39 percent are receiving benefits in any individual month. This suggests that while the receipt of food stamps seems fairly stable over time, there is actually a substantial degree of turnover with recipients leaving and entering the food stamp caseload.

There is information on food stamp receipt from survey data in four of the studies (table V.4). Where the timing of this information overlaps with that of administrative data, the results are similar. Missouri again affords the opportunity to observe program participation a fairly long time after leaving. In this study, 47 percent of leavers are receiving food stamps 30 months after exit, the same percent receiving food stamps in the second quarter after exit according to Missouri's administrative data.

Medicaid and Other Health Insurance

Another important benefit that can support the transition from welfare to work is public health insurance through the Medicaid program. ⁽¹⁸⁾ Like food stamps, families receiving TANF are generally eligible for this benefit. This is borne out in the high rates of receipt, above 92 percent, in the three studies reporting Medicaid coverage in the quarter prior to exiting TANF (table V.5). Most families exiting welfare through employment are eligible for Transitional Medical Assistance and most children in low-income families are eligible for Medicaid.

In the studies reporting Medicaid administrative data, however, we see relatively low rates of Medicaid coverage for both adults and children in the first months after exiting TANF. For adults, whom we expect to have lower Medicaid coverage than children, the results range from 26.4 percent in San Mateo County to 75.9 percent in Wisconsin. Five out of nine study areas reporting coverage in the first quarter (or third month) after leaving show less than half of adult leavers with Medicaid coverage.⁽¹⁹⁾ Only four studies report separate administrative data numbers for children. The coverage rates here vary quite a bit, with 61.6 percent coverage in Florida the third month after exit and 27.6 percent coverage in San Mateo County at the same point. However, in both of these areas, coverage for children is higher than for adults. New York is the only study reporting higher Medicaid coverage for adults than children (35 percent versus 34 percent) although the ranking reverses when considering single and two-parent families together.

Over time, the rate of Medicaid coverage declines for both adults and children in all study areas except the District of Columbia. As with food stamp receipt, the decline would likely be greater if we separated out those leavers who are receiving Medicaid after returning to TANF. The four studies reporting Medicaid use by continuous leavers show this more dramatic decline (not shown in table). Rates of Medicaid coverage one year after exiting TANF are substantially lower for continuous leavers than for all leavers in DC, Florida, Illinois, and Washington.⁽²⁰⁾ This is not unexpected since after six months, transitional Medicaid benefits are income-tested.

Also similar to food stamp receipt, the percentage of leavers who received Medicaid at any time over the year after exit is significantly higher than the percent receiving in any particular month or quarter. For example, in Florida, 68.8 percent of adults and 77.8 percent of children had received Medicaid at some point over the year, but only 40.0 percent and 50.8 percent of adults and children respectively were receiving benefits in the twelfth month after exit. This signifies a fair amount of turnover in Medicaid receipt.

In the area of health insurance coverage, survey data can add a great deal to our knowledge. It allows us to ascertain coverage by private sources as well as public and to discover the percentage of persons with no coverage at all. Five studies report survey data for insurance coverage of adults and children at the time of the survey (table V.6). The percentages for Medicaid are reported in the first column. This information roughly corresponds to the administrative findings where similar time periods are available, although survey reports of Medicaid tend to be higher than administrative reports.

The rates of uninsured among adults and children vary substantially across survey areas. For adults, the range is from 22.4 percent in the District of Columbia to 40.0 percent in Arizona. The range is due in part to the range in Medicaid coverage for adults across the states as well as, to a lesser extent, differences in private coverage. The lower rate of adult uninsurance in DC is a result of the somewhat higher rate of adult Medicaid coverage compared with other areas. Missouri has the lowest reported adult Medicaid coverage, 33 percent, but also has the highest rate of private (employer and other) coverage at 34 percent.

The rate of uninsurance within study area is always lower for children than adults, largely due to greater eligibility for Medicaid, but it still varies across area. For children, the range is from 8.0 percent in Missouri to 28.9 percent in Illinois. The low rate of uninsurance for children in Missouri is directly related to the high rate of Medicaid coverage, 68 percent, the highest of any of the areas. Employer-sponsored or other coverage for children is similar across study areas.

Other Sources of Public Support

There are a number of other sources of public support that can provide crucial assistance to families that have exited welfare. These include child care assistance, housing assistance through subsidies or public housing and Supplemental Security Income (SSI) program for persons with disabilities. A few areas asked about receipt of these benefits in their surveys, some asking about receipt at the time of the survey, some since exit and some for both time periods (table V.7).⁽²¹⁾  In addition, many working leavers will be eligible for the federal Earned Income Tax Credit (EITC) that supplements incomes of low-income workers.

A significant minority of leavers are receiving housing assistance. At the time of the survey, the rates ranged from 18 percent of welfare leavers in Arizona to 27.4 percent of leavers in the District of Columbia (both about 12 months after exiting TANF). A smaller percentage of families received this assistance in Illinois, 13.6 percent in the 6 to 8 months after exiting.

In addition, between 4.0 and 12.0 percent of former recipients receive cash assistance from the SSI program at the time of the survey. Since this income is for persons with a disability that prevents them from working, some leavers who are not working may instead be relying on this income.

A final source of public support is the federal EITC. Working families with relatively low earnings are eligible to receive this credit from the federal government.⁽²²⁾ Three studies report how many leavers received this credit. Arizona reports 51 percent of leavers, Illinois reports 40.8 percent of leavers, and Washington reports 65 percent of leavers received the EITC. Arizona and Illinois also report that a higher percentage of leavers had heard of the EITC, 66 percent and 76 percent, respectively. Illinois probes further and finds that although three-quarters have heard of the EITC, only 47 percent say they know what it is, a percentage not much higher than those receiving the credit.

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VI. Material Hardship and Well-Being

Income, earnings, and program participation are important parts of economic well-being, but they do not capture overall well-being. There are many other aspects of former recipients' lives that reflect how well these families are doing. Several studies have collected information in their surveys that reflect the extent to which former recipients are experiencing particular problems of material hardship. Because those receiving TANF benefits can also experience these problems, most studies compare results for leavers before and after exit.⁽²³⁾ The Washington state study has a different and perhaps stronger research design for comparing former and current recipients by making the comparison for leavers to a separate sample of families still on TANF. While the questions across these surveys are not identical so comparisons need to be made carefully, the addition of these measures significantly broadens our understanding of the well-being of welfare leavers.

One area of concern is the extent to which families who left welfare are having problems with the basic necessity of having enough food. The surveys use several measures to get at the extent and severity of families experiencing food problems (table VI.1). Several ask whether leavers experienced not having enough to eat or food not lasting until the end of the month. A fairly large number of leaver families report this experience in the time after exiting, ranging from 24.0 percent in Arizona to 45.5 percent in the District of Columbia. One action families might take in this situation is to cut the size of or skip meals. Illinois and District of Columbia both report that about a quarter of leaver families say they have taken one of these actions sometimes or often. Washington reports that 43 percent of leavers report having cut the size of meals and 27 percent have skipped meals. An indicator of even more severe problems is having a child skip meals. Missouri reports 3 percent of leaver families have taken this action and Washington reports 4 percent have done so. Finally, another indicator of need is families reaching out to food banks and shelters to help with emergency provision of food. Responses range from 7.2 percent of leaver families in Missouri receiving food assistance from a church or community group to 44 percent of leavers in Washington reporting receiving food from a food bank or shelter.

In the three studies that compare food problems before and after exit, Arizona and Illinois generally find lower absolute numbers experiencing food hardship after exit than prior to exit.⁽²⁴⁾ However, Washington generally finds higher rates of food problems among leavers than among those who are on TANF. This difference across studies could be related to the fact that Washington is comparing leavers to a separate group of those on TANF, while the other studies compare the same group of people's experiences before and after leaving. Washington's results may be more persuasive, given they are not subject to problems with recall. However, it is important to note that the relative well-being of families on cash assistance will be affected by differences in state benefit levels.

Another area of material hardship is problems with housing and utilities. Again, the surveys use a number of different questions to get at the extent to which leavers are experiencing housing-related problems. One measure is whether the family has been behind on rent or housing costs. In all the studies that ask this question, over a quarter report having experienced this problem since exiting. Another more severe situation is having to move because of inability to pay housing costs. A smaller but substantial percentage of families report this, ranging from 5.7 percent in DC to 17.0 percent in Arizona. Approximately 3.0 percent of families in Arizona, Illinois, and DC report staying in homeless shelters after leaving TANF (Washington reports a lower 1.3 percent). In addition to problems with rent and places to stay, a number of families have had utilities cut off because of failure to pay. This ranges from 5.8 percent of families in DC having had electricity cut off, to 13.9 percent of families having some utility cut off since leaving TANF in Illinois.

Three out of four of the studies (Arizona, Illinois, and DC) find higher absolute percentages of families experiencing these housing-related problems before TANF than after exiting. Again, Washington finds that leavers are slightly worse off, being more likely to have been evicted or without a place to live than those on TANF.

Two other measures of hardship that were asked in several studies have to do with whether children needed to go live elsewhere because of financial problems and whether families were unable to afford or get medical attention. The percentage of families where children were forced to live elsewhere after the family left TANF ranges from 5.4 percent in DC to 8.2 percent in Illinois. The percentages experiencing this situation before leaving TANF is slightly higher. Washington does not include a similar measure but does report that 3 percent of leavers have a child in foster care at least once after TANF, while only 2 percent of those on TANF were in this situation.

The percentage of families unable to get medical attention varies more than the other measures reported, from 8.3 percent in DC to 30.5 percent in Illinois. Unlike the other measures, this is only one that is consistently higher for families after exiting TANF compared with while on TANF. This seems consistent with the significant declines in Medicaid coverage reported earlier.

A final measure of well-being is a more general question posed to families in three of the studies. The questions all ask families to compare their overall well-being since exiting TANF to the prior time period. Approximately one-fifth or less of families report they are worse off or much worse off after leaving TANF than before, 21 percent in Washington, 15 percent in Arizona, and 12.6 percent in Illinois (table VI.2). Less than a third are reporting they are doing about the same since leaving TANF. This leaves more than half of families saying they are better off since leaving welfare, with more than two-thirds of families saying they are better off in Arizona. These results are consistent with the general findings on the material hardship measures that although a number of families experience these problems after exiting, for the most part they experience them less than before leaving TANF. Even in Washington, which found higher rates of most material hardship measures among leavers than among those on TANF, 79 percent of families say they are the same or better off compared to before they left welfare.

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VII. Child Care

With work as a major goal of many states' welfare programs, the need for child care is an important consideration. Child care subsidies are generally available to employed TANF leavers, depending on income. However, use of subsidies depends on the type of care arrangement being used, knowledge of availability and eligibility for subsidies, and ease or difficulty of obtaining and using them. Concerns about the quality of care being received by children of working TANF leavers are also important, although related measures are generally beyond the scope of the surveys conducted.

Three surveys asked about the type of child care arrangements employed leavers use.⁽²⁵⁾ Since type of care differs by age group, particularly pre-school age, and post-school age, some studies show their results by age of child (table VII.1). A substantial percentage of families do not have a child care arrangement, other than a parent or regular schooling. The percentage is higher for older children: Illinois reports 64 percent of working families with children over 12 have no arrangement. Missouri reports 60 percent of working families with school-age children 6 to 13 have no child care, while Washington and Illinois report lower rates of 10 percent and 18 percent (for all children less than 13), respectively. The differences in rates across types of care could in part be due to the different categorizations of care made in each study. Missouri has higher rates of no child care, but lower rates of relative or sibling care than the other states.

The percentage of working families using relative or sibling care is very high. In Illinois, for children under 6 and 6 to 12, the rates of this type of care are over 50 percent. For younger children in Missouri and Washington, the rates are around a third of working leavers. While some families pay relatives for care, this type of arrangement probably includes less paid care than the remaining categories. Among the other types of care used, the most used for pre-school children are center care and family day care or babysitter in the home.

Paying for child care is a critical issue for families leaving TANF for employment. Costs of child care can affect choice of arrangement. Two studies reported the percentage of employed leavers with child care arrangements who reported paying for child care. In Illinois and Missouri the share paying for child care are 44 percent and 40 percent, respectively. Both report this percentage varies with the age of the child.

At least in these two states, the percentage of leavers who might take up child care subsidies is a smaller subset of all leavers, those who have a child care arrangement and are paying for care. Given that many families have no child care arrangement, and less than half of families who have an arrangement are paying for care, it is not surprising that relatively small percentages of leaver families report using child care subsidies. This percentage varies from a low of 5.0 percent of working leavers with children in the District of Columbia to a high of 20 percent of all leavers in Washington.⁽²⁶⁾ Whether low usage of subsidies is the result of not needing these benefits, or simply not using them results from lack of knowledge of eligibility or difficulty in using them is not known.

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VIII. Conclusions

Examining results from the twelve study areas summarized in this report, we find that although there are outliers in most measured outcomes, there are a surprising number of common findings. Broadly speaking, among families leaving welfare, about three out of five work at any given time after exiting and about