Final Synthesis Report of Findings from ASPE "Leavers" Grants:

Chapter III:
Employment and Earnings

[ Main Page of Report | Contents of Report ]

Contents

  1. How Much Are Welfare Leavers Working?
  2. How Much Are Leavers Paid?
  3. Employment and Earnings by Subgroup
  4. What Barriers to Work Do Leavers Face?
  5. Chapter Summary

Endnotes

A central goal of welfare reform is moving families from welfare to work and, ultimately, to self-sufficiency. All of the ASPE-funded leaver studies present findings on the post-TANF employment and earnings of welfare leavers. Studies that have reported survey results present additional information on the attributes of the jobs working leavers hold, the hours they work, and the obstacles they must overcome to obtain and keep jobs. In this chapter, we examine the employment status of welfare leavers, reviewing reported findings from administrative data as well as from survey data. Using public use data files, we are also able to make cross-study comparisons of information not necessarily presented in the completed studies.

A. How Much Are Welfare Leavers Working?

Fourteen of the ASPE-funded leaver studies included here use administrative data from their states’ Unemployment Insurance (UI) systems to examine the employment and earnings of TANF leavers in the months and years following exit. A fifteenth study, the District of Columbia's, accessed data from the National Directory of New Hires (NDNH) to obtain quarterly employment information for its TANF leavers. This data source cuts across state lines and includes federal workers; thus, given D.C.'s geography and employment patterns, NDNH has more complete and more useful information for D.C. than state UI records.

Post-exit employment rates calculated from administrative data appear in Figure III.1—more detailed information appears in Table III.1 Employment rates are remarkably consistent across studies.

Figure III.1:
Employment Rates of Single-Parent Welfare Leavers

Figure III.1: Employment Rates of Single-Parent Welfare
Leavers

Notes: The graph shows the minimum, maximum, and median employment rates as reported across the studies. The shaded box represents the range in which the middle 50% of reported employment rates fall. Not all studies provide data for all post-exit quarters. See table III.1 for more information.

Table III.1:
Employment of Single- Parent Welfare Leavers: Select Administrative Data Findings

State/Study

Exit Cohort Post Exit Quarter (%) Worked All Four Quarters (%) Ever Worked After Exit (%) Working in Pre-Exit Quarter (%) Working in Exit Quarter (%)
Q1 Q2 Q3 Q4

Arizona

1Q98 53 51 52 501 n.a 73 1 47 54

District of Columbia2

4Q97 62 66 57 60 39 79 n.a n.a

Florida

2Q97 50 51 53 54 31 71 n.a 39

Georgia

1Q99 64 60 59 57 n.a n.a n.a 61

Illinois

3Q97 - 4Q98 54 53 54 55 39 70 49 55

Iowa

2Q99 57 42 39 38 25 69 44 57

Massachusetts2

Dec 1998 - Mar 1999 60 61 51 n.a n.a 68 n.a 57

Missouri2

4Q96 58 58 59 58 n.a n.a n.a n.a

New York

1Q97 50 49 48 48 40 62 n.a 50

South Carolina2,3

Oct 1998 - Mar 1999 67 68 67 63 34 90 61 69

Washington

4Q97 57 57 58 57 n.a n.a 50 61

Wisconsin2

2Q98-4Q98 67 65 67 67 n.a 82 55 68

Cuyahoga Co.3

3Q98 68 64 67 64 47 82 n.a n.a

Los Angeles Co.3

3Q96 47 46 46 47 35 57 43 46

Bay Area

4Q98 55 55 55 n.a n.a n.a 51 58

1Data from report differ from revised data in public use data file. Revised fourth quarter employment is 51% and ever worked after exit is 70%. Arizona added 17 new cases to the data file one year after the report was published.
2Report employment data for all cases, not just for single-parent cases.
3Los Angeles Co., Cuyahoga Co. and South Carolina require a leaver to have at least $100 in earnings to be considered working while others require only $1.

In the first quarter after exit, employment rates range from a low of 47 percent in Los Angeles to a high of 68 percent in Cuyahoga County. The median first post-exit quarter employment rate across the studies is 57 percent, and many studies cluster tightly around the median. By the fourth post-exit quarter, most studies' employment rates remain tightly clustered around 57 percent. Wisconsin's leavers have the highest fourth quarter employment rates (67 percent) while Iowa's leavers have the lowest (38 percent).

In most studies, post-TANF employment rates as reported using administrative data remain fairly stable over the first post-exit year. The two exceptions to this are Georgia, which shows a modest decline in employment rates from 64 to 57 percent between the first and fourth post-exit quarters, and Iowa, which shows a substantial decline from 57 to 38 percent.

It is important to note that while overall employment rates for TANF leavers hover just below 60 percent, this does not imply that the same individuals who worked in the first quarter continue to work throughout the year. Indeed, there is a considerable amount of employment "churning" in the welfare leaver population. In the eleven studies that report information on leavers who ever worked over the first post-exit year, we see that the share of leavers who ever worked after exiting ranges from a low of 57 percent in Los Angeles County to a high of 90 percent in South Carolina; the median "ever worked" employment rate is 71 percent. Further, across the eight studies reporting the share of leavers who worked in all four post-exit quarters, the median study finds that only 37 percent of leavers worked in all four post-exit quarter. The 'all four-quarters' employment rates range from a low of 25 percent in Iowa to a high of 47 percent in Cuyahoga County.

Although there are some methodological differences between studies—for example, the South Carolina, Los Angeles and Cuyahoga County studies 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 about one out of four have never worked in the year following exit.

All these employment measures are fairly broad—even in the three studies using the $100 earnings threshold, a leaver would be considered employed if she earned minimum wage and worked for just one half of one week out of a 13 week quarter. The public use data files made available by Arizona, the District of Columbia, and Iowa allow an examination of employment rates using a stricter definition: an earnings requirement of at least $500 in a quarter to be considered employed. This higher threshold basically requires a leaver to have worked the equivalent of two full-time weeks and be paid about $6.25 an hour to be counted as having worked in a given quarter. Table III.2 shows that under this tighter rule, employment rates in the first post-exit quarter are 6 to 11 percentage points lower than under the "any earnings" criterion. In the fourth post-exit quarter, the employment rates based on the $500 rule are 6 to 10 percentage points lower than the rates based on the "any earnings" for the three studies. Finally, the share of leavers who ever earned more than $500 dollars in any of the first four post-exit quarters (the "ever worked" employment rate) (see Figure III.2) is also lower than when using the "any earnings" rule: in Arizona, only 62 percent of leavers "ever worked" during the first post-exit year if the "$500 rule" is applied, compared with 70 percent using the "any earnings" rule.

Figure III.2:
Percent of Single-Parent Welfare Leavers Who Ever Worked in Year After Exit Using Alternative Definitions of Work

Figure III.2: Percent of Single-Parent Welfare Leavers
Who Ever Worked in Year After Exit Using Alternative Definitions of
Work

Notes: See table III.2 for more information.

Table III.2:
Employment Rates of Single- Parent Welfare Leavers Using a $500 per Quarter Earnings Threshold:Administrative Data Findings

State/Study

Exit Cohort Quarter Relative to Exit (%) Worked All Four Quarters (%) Ever Worked After Exit (%)
Q-1 Q1 Q2 Q3 Q4

Arizona1

1Q98  

Any Earnings

  47 53 51 52 51 32 70

$500 in Earnings

  34 44 43 45 44 25 62

District of Columbia1,2

4Q97  

Any Earnings

  63 62 n.a. 57 60 39 79

$500 in Earnings

  56 56 n.a. 53 54 35 74

Florida

2Q97  

Any Earnings

    50 51 53 54 31 71

$500 in Earnings

    42 43 45 46 n.a 63

Illinois

   

Any Earnings

  49 54 53 54 55 39 70

$500 in Earnings

  38 47 46 47 48 n.a. 63

Iowa1

2Q99  

Any Earnings

  44 57 42 39 38 25 69

$500 in Earnings

  32 49 36 33 32 20 61

South Carolina2

   

Any Earnings

  61 67 68 67 63 34 90

$500 in Earnings

  44 56 58 54 53 n.a. n.a.

1Data calculated from public use data files.
2Report employment data for all cases, not just for single-parent cases.
Source: See Appendix B for a complete listing of the leavers studies referenced.

The gaps for DC, Florida, Illinois, and Iowa are similar in size. This suggests that over 10 percent of working leavers really do not work much, at least in jobs covered by unemployment insurance.

One explanation for this discrepancy may be that leavers who only work a little end up returning to the welfare rolls. Therefore, we may expect to see higher employment rates and more employment growth for "continuous leavers"—families that remain off welfare for at least an entire year after they exit. Figure III.3 and Table III.3, however, show there is little difference in employment between continuous leavers and leavers in general in three out of four studies that either report this information or have made data available that allow us to compute it.

Figure III.3:
Percent of Single-Parent Welfare Leavers Who Ever Worked in Year After Exit--Continuous Leavers v. All Leavers

Figure III.3: Percent of Single-Parent Welfare Leavers
Who Ever Worked in Year After Exit--Continuous Leavers v. All Leavers

Notes: See table III.3 for more information.

Table III.3:
Employment Rates of Single- Parent Welfare Leavers-- Continuous Leavers vs. All Leavers: Administrative Data Findings

State/ Study

Exit Cohort Post Exit Quarter (%) Worked All Four Quarters (%) Ever Worked After Exit (%)
Q1 Q2 Q3 Q4

Arizona

1Q98  

All Leavers

  53 51 52 51 32 70

Continuous Leavers

  53 53 53 52 36 68

District of Columbia1

4Q97  

All Leavers

  62 66 57 60 39 79

Continuous Leavers2

  63 68 62 64 44 80

Iowa

2Q99  

All Leavers

  57 42 39 38 25 69

Continuous Leavers

  55 42 40 39 28 67

Washington

Oct. 1997  

All Leavers

  57 57 58 57 n.a. n.a.

Continuous Leavers

  57 57 57 56 n.a. n.a.

1Report employment data for all cases, not just for single-parent cases.
2Published data are incorrect.
Note: All data calculated from public use data files.
Source: See Appendix B for a complete listing of the leavers studies referenced.

In Arizona, for example, the fourth post-exit quarter employment rate for continuous leavers is 52 percent, only 2 percentage points higher than the rate for all leavers. Similarly, in Iowa and Washington, the fourth post-exit quarter employment rates are 39 and 56 percent, respectively, for continuous leavers and 38 and 57 percent for all leavers. In DC, however, continuous leavers have slightly higher employment rates than leavers in general: 64 versus 60 percent for the fourth post-exit quarter. Interestingly, although continuous leavers are slightly more likely to have worked in all four post-exit quarters than leavers in general, they are just about as likely to have ever worked.

That the employment rates for continuous leavers are so similar to those for all leavers is somewhat surprising. Indeed, these findings may suggest that continuous leavers are more likely to have some form of support other than work and welfare than leavers in general. This support may come from a spouse/partner or from another public program like SSI. Alternatively, it is possible that continuous leavers have simply disappeared from administrative records, for example, by leaving the state. Since they do not show up back on the state's TANF rolls or in its UI records, they will appear to be unemployed continuous leavers.

Finally, 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 lastly, leavers who are domestic service workers (like nannies or house cleaners) 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.

Because eleven jurisdictions report survey findings on current employment status of TANF leavers, it is possible to assess the extent to which work is under-reported in administrative records. The responses of leavers generally refer to employment about 6 months to a year after exit (see Appendix Table B). Table III.4 compares these self-reported employment rates with fourth quarter post-exit employment rates computed from administrative data. The District of Columbia, which used administrative data from the NDNH, reports fairly similar employment rates from both survey and administrative data sources.15 Interestingly, South Carolina, Washington state, and the Bay Area Study also find similar employment rates using the two data sources. Arizona, Georgia, Illinois, Missouri, and Cuyahoga County find employment rates that are 6 to 10 percentage points higher in survey data than in their state UI records, indicating some coverage gaps in administrative data. In Iowa and Massachusetts, however, the employment gap between survey and administrative data is alarmingly large: surveys find employment rates that are 20 or more percentage points higher than those computed from administrative data. Iowa, because of its large agriculture sector, may have more under-reporting in its UI system than other jurisdictions, but it is unlikely that "true" under-representation would be this much larger than the under-representation in other Midwestern states with heavy agriculture employment, such as Illinois and Missouri.

Table III.4:
Employment of Single-Parent Welfare Leavers: Comparison of Administrative and Survey Findings

State/Study

Exit Cohort Timing of Survey Post Exit Employment Rate (%)
Survey Data Administrative Data1

Arizona

1Q98 12 - 18 months 57 50 3

District of Columbia2

4Q97 and 4Q98 4 ~ 12 months 60 60

Georgia

Jan 1999-June 20004 ~ 6 months 69 59 5

Illinois

Dec. 1998 6 - 8 months 62 54

Iowa

2Q99 8 - 12 months 60 6 37 6

Massachusetts2

Dec 1998 - Mar 1999 ~ 10 months 71 51 7

Missouri2

4Q98 26 - 34 months 65 58

South Carolina2

Oct 1998 - Mar 1999 12 months 59 63

Washington

Oct. 1998 6 - 8 months 59 57

Cuyahoga Co.

3Q98 14-21 months 70 64

Bay Area

4Q98 6-12 months 57 55 8

1Based on employment rate from the 4th post-exit quarter.
2Employment data reported for all cases, not just single-parent cases.
3Data from report differ from revised data in public use data file. Revised fourth quarter employment is 51%. Arizona added 17 new cases to the data file one year after the report was published.
4The exit cohorts in DC and Georgia are different for administrative and survey data. In DC, the survey cohort exit period is 4Q98 while the administrative data period is 4Q97. In Georgia, the survey cohort exit period is Jan99- June 2000, while the administrative data period is 1Q98.
5Administrative employment rate based on 2nd post-exit quarter.
6Only survey respondents included.
7Administrative employment rate based on 3rd post-exit quarter.
8Based on employment rate from 9th month.
Source: See Appendix B for a complete listing of the leavers studies referenced.

[Go To Contents]

B. How Much are Leavers Paid?

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. The fifteen studies report mean/median quarterly earnings of employed TANF leavers based on UI wage records or NDNH data studies. These records include earnings information on all reported jobs a leaver has held during the quarter. Note that earnings estimates reported from these administrative sources 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.

Table III.5 and Figure III.4 show that the mean/median earnings of employed leavers during the first post-TANF exit quarter range from about $1,900 to about $3,400.16

Figure III.4:
Mean Earnings of Single-Parent Welfare Leavers

Figure III.4: Mean Earnings of Single-Parent Welfare
Leavers

Notes: The graph shows the minimum, maximum, and median earnings as reported across the studies. The shaded box represents the range in which the middle 50% of reported earnings fall. Not all studies provide data for all post-exit quarters. See table III.5 for more information.

Table III.5:
Mean Quarterly Earnings of Employed Single-Parent Leavers: Administrative Data Findings

State/Study

Exit Cohort Post- Exit Quarter ($) Growth Q1-Q4
Q1 Q2 Q3 Q4

Arizona

1Q98 2,211 2,354 2,695 2511 1 300

District of Columbia2,3

4Q97 3,416 n.a 3,395 3,934 518

Florida

2Q97 2,163 2,352 2,343 2,496 333

Georgia

1Q98 2,185 2,294 2,562 2,327 142

Illinois

3Q97 - 4Q98 2,663 2,746 2,846 2,959 296

Iowa

2Q99 2,481 2,661 2,550 2,712 231

Massachusetts2

Dec 1998 - Mar 1999 2,834 3,005 3,201 n.a n.a

Missouri2

4Q96 2,192 2,360 2,384 2,698 506

New York

1Q97 3,393 3,402 3,877 3,602 209

South Carolina2

Oct 1998 - Mar 1999 1,941 2,081 2,163 2,332 391

Washington

4Q97 2,678 2,906 2,975 3,275 597

Wisconsin2

4Q97 2,272 2,362 2,278 2,561 289

Cuyahoga Co.

3Q98 2,744 2,489 2,663 2,754 10

Los Angeles Co.

3Q96 3,414 3,387 3,521 3,576 162

Bay Area

4Q98 3,144 3,439 3,612 n.a n.a

1Data from report differ from revised data in public use data file. Revised fourth quarter earnings are $2,525. Arizona added 17 new cases to the data file one year after the report was published.
2Report earnings data for all cases, not just for single-parent cases.
3Data reported for District of Columbia are median earnings, not mean earnings.
Source: See Appendix B for a complete listing of the leavers studies referenced.

In the first post-TANF quarter, half the studies find mean/median earnings ranging from about $2,200 to $2,800 for leavers with any earnings. During the fourth post-TANF exit quarter, earnings range from about $2,300 to about $3,900. This represents a substantial increase in average earnings over time. For example, in the District of Columbia, Missouri, and Washington, the average earnings of employed leavers increased by over $500 between the first and fourth post-exit quarters.

Table III.6 and Figure III.5 show earnings for leavers earning over $500 a quarter and compares them with leavers with any earnings.

Figure III.5:
Mean Earnings of Single-Parent Welfare Leavers in the Fourth Quarter After Exit Using Alternative Definitions of Work

Figure III.5: Mean Earnings of Single-Parent Welfare
Leavers in the Fourth Quarter After Exit Using Alternative Definitions of
Work

Notes: See table III.6 for more information

Table III.6:
Mean Quarterly Earnings of Employed Single-Parent Welfare Leavers Using a $500 per Quarter Earnings Threshold: Administrative Data Findings

State/Study

Exit Cohort Quarter Relative to Exit ($) Growth Q1-Q4
Q-1 Q1 Q2 Q3 Q4

Arizona

1Q98  

Any Earnings

  1,349 2,211 2,354 2,695 2,525 300

$500 in Earnings

  1,772 2,609 2,754 3,050 2,899 290

District of Columbia1

4Q97  

Any Earnings

  3,347 3,416 n.a 3,395 3,934 518

$500 in Earnings

  3,622 3,757 n.a. 3,563 4,217 460

Iowa

2Q99  

Any Earnings

  1,402 2,481 2,661 2,550 2,712 231

$500 in Earnings

  1,859 2,844 3,046 2,995 3,184 340

1Report earnings data for all cases, not just for single-parent cases. Earnings data are median earnings, not mean earnings.
Note: All data calculated from public use data files.
Source: See Appendix B for a complete listing of the leavers studies referenced.

In Iowa and Arizona, the average earnings for leavers who earn at least $500 a quarter is about $400 higher than the average earnings for all leavers. In both states the average fourth post-exit quarter earnings for those earning at least $500 is about $3,000.

Table III.7 and Figure III.6 compare all leavers with earnings with continuous leavers with earnings.

Figure III.6:
Mean Earnings of Single-Parent Welfare Leavers in the Fourth Quarter After Exit--Continuous Leavers v. All Leavers

Figure III.6: Mean Earnings of Single-Parent Welfare Leavers in the Fourth
Quarter After Exit--Continuous Leavers v. All Leavers

Notes: See table III.6 for more information.

Table III.7:
Mean Quarterly Earnings of Employed Single-Parent Welfare Leavers-- Continuous Leavers vs. All Leavers: Administrative Data Findings

State/Study

Exit Cohort Quarter Relative to Exit ($) Growth Q1-Q4
Q1 Q2 Q3 Q4

Arizona1

1Q98  

All Leavers

  2,211 2,354 2,695 2,525 314

Continuous Leavers

  2,470 2,645 3,039 2,771 301

District of Columbia1,2

4Q97  

All Leavers

  3,416 n.a 3,395 3,934 518

Continuous Leavers

  3,685 n.a. 3,569 4,275 590

Iowa1

2Q99  

All Leavers

  2,481 2,661 2,550 2,712 231

Continuous Leavers

  2,634 2,947 2,925 3,056 422

Washington

Oct. 1998  

All Leavers

  2,678 2,906 2,975 3,275 597

Continuous Leavers

  2,945 3,273 3,422 3,750 805

1Data calculated from public use data files.
2Report earnings data for all cases, not just for single-parent cases. Earnings data are median earnings, not mean earnings.
Source: See Appendix B for a complete listing of the leavers studies referenced.

In all four studies which examine continuous leavers, leavers who remained off welfare for an entire year tend to have higher earnings than the average leaver and the gap grows slightly over time. For example, in Iowa, continuous leavers earn $153 more than leavers in general, on average, in the first post-exit quarter ($2,634 versus $2,481). By the fourth post-exit quarter, the gap between continuous and all leavers reaches $344 ($3,056 versus $2,712). Only in Arizona does the gap between all and continuous leavers remain stable over time (about $300). These figures suggest that, in general, those leavers who remain off of welfare earn more after exit and experience more rapid earnings growth than the average leaver. It is not clear if higher earnings enable continuous leavers to stay off welfare or whether it is continuous leavers' skill and perseverance that allow them to be more successful in the labor market.

Ten of the studies 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.

Surveys of welfare leavers obtain information on the hours worked and wages of leavers (see Table III.8). All eight of the studies that examine hours worked in their surveys show that employed leavers work close to full-time on average, with mean weekly hours ranging from 33 to 39 and median hours (when reported) reaching 40. Mean hourly wages range from $7.50 to $8.74, and median hourly wages range from $6.50 to $8.13. If a leaver works 40 hours a week and earns $7.50 an hour, she would earn $3,900 in a quarter provided that she worked all thirteen weeks in the quarter. However, as illustrated above, quarterly earnings are usually less than $3,900, indicating that a substantial share of leavers experience periods of joblessness and may even return to welfare.

Table III.8:
Hours and Wages of Single-Parent Welfare Leavers: Survey Findings

State/Study

Exit Cohort Timing of Survey Post Exit Hours Worked Wage Rate
Mean Median Mean Median

Arizona

1Q98 12 - 18 months 35 n.a 7.52 1 n.a

District of Columbia2

4Q98 ~ 12 months 36 40 $8.74 $8.13

Illinois

3Q97 - 4Q98 6 - 8 months n.a 37 $7.89 $7.41

Iowa

2Q99 8 - 12 months 35 n.a $7.54 n.a

Massachusetts2

Dec 1998 - Mar 1999 ~ 10 months 33 n.a $8.46 n.a

Missouri

4Q98 26 - 34 months 39 40 n.a n.a

South Carolina2

Oct 1998 - Mar 1999 12 months 36 n.a n.a $6.50 3

Washington

Oct. 1998 6 - 8 months 36 40 $7.70 7.00

Cuyahoga Co.

3Q98 14 - 21 months 35 n.a $7.50 n.a

Bay Area

4Q98 6 - 12 months n.a n.a n.a $9.00

1Data published in the report differ slightly because the weights used in the report were not accurate.
2Report data for all cases, not just for single-parent cases.
3For those who have not returned to welfare.
Source: See Appendix B for a complete listing of the leavers studies referenced.

Table III.9 compares the hours and wage rates of continuous leavers with those of all leavers for the five studies that allow us to make this comparison. Continuous leavers are slightly more likely to be employed at the time of the survey than leavers in general with the difference ranging from 2 to 9 percentage points. With regard to whether leavers were ever employed since leaving TANF, there is little difference between continuous and other leavers; this is consistent with findings from administrative data. In addition, among currently employed leavers, there is little difference in hours worked between continuous and leavers in general, but this could reflect the fact the most working leavers work close to full-time. One might expect that continuous leavers would have higher hourly wage rates either because they have stronger attachments to the labor force, allowing for wage advancement, or because higher wages enable them to continue working. Whatever the reason, mean hourly wages are, in fact, 7 to 23 cents higher for continuous leavers; median hourly wages are up to 25 cents higher. For a full-time worker, a 25 cent an hour difference in pay translates into about $43 a month.

Table III.9:
Hours and Wages of Employed Single-Parent Welfare Leavers and Overall Employment Rates: Survey Findings

State/ Study

Hours Worked Wage Rate ($) Percent Employed (%)
Mean Median Mean 25th Median 75th Time of Survey Since Exit

Arizona1

All Leavers

35 40 7.52 6.00 7.00 8.50 58 75

Continuous leavers

35 40 7.68 6.00 7.25 8.79 63 74

District of Columbia1,2

All Leavers

36 40 8.74 7.00 8.13 10.00 60 80

Continuous leavers

37 40 8.94 7.00 8.38 10.24 69 81

Iowa1

All Leavers

34 38 7.19 6.00 7.00 8.00 61 71

Continuous leavers

35 40 7.42 6.00 7.00 8.00 69 68

Massachusetts1

All Leavers

34 35 8.46 6.50 8.29 10.00 72 90

Continuous leavers

34 35 8.53 6.57 8.46 10.00 75 93

South Carolina2

All Leavers

36 n.a. n.a. n.a. n.a. n.a. 59 n.a.

Continuous leavers

36 n.a. n.a. n.a. n.a. n.a. 61 n.a.

1 Calculated from public use data files.
2 Report data for all cases, not just for single-parent cases.
Source: See Appendix B for a complete listing of the leavers studies referenced.

In addition to monetary pay, employed leavers may receive non-cash employee benefits through their jobs. Eight of the surveys ask explicitly about job-related benefits, and unlike employment and cash earnings, there is considerable variation across the studies. Table III.10 shows that the share offered such coverage ranges from 41 percent in the Bay area to 58 percent in Cuyahoga County, and the share of leavers with employer sponsored health insurance coverage ranges from 12 percent in Arizona to 36 percent in Washington state. The share of leavers with paid sick days ranges from a low of 28 percent in Washington state to a high of 50 percent in the District of Columbia and Cuyahoga County with Massachusetts close behind at 47 percent; in the other two locales reporting this information, about two out of five leavers have paid sick leave. In three studies, the share with paid vacations reaches 60 percent or more (DC, IA, and CCo.). Finally, 46 percent of working leavers have retirement benefits in DC compared with 21 percent in Washington state.

Table III.10:
Employer Sponsored Benefits of Employed Single-Parent Welfare Leavers: Survey Findings

State/Study

Exit Cohort Timing of Survey Post Exit Health Insurance Percent of Leavers (%)
Offer Coverage Paid Sick Leave Paid Vacation Pension

Arizona

1Q98 12 - 18 months n.a. 12 n.a. n.a. n.a.

District of Columbia1

4Q98 ~ 12 months n.a. 32 50 62 46

Iowa

2Q99 8 - 12 months 61 33 40 60 n.a

Massachusetts1

Dec 1998 - Mar 1999 ~ 10 months 52 n.a. 47 55 n.a

Missouri1

4Q98 26 - 34 months 53 n.a. 40 52 n.a

Washington

Oct. 1998 6 - 8 months n.a. 36 28 31 21

Cuyahoga Co.

3Q98 14 - 21 months 58 27 50 63 n.a

Bay Area

4Q98 6-12 months 41 n.a. n.a. n.a. n.a.

1Report data for all cases, not just for single-parent cases.
Source: See Appendix B for a complete listing of the leavers studies referenced.

[Go To Contents]

C. Employment and Earnings by Subgroup

The ASPE-funded leaver studies contain interesting information on the employment outcomes for different groups of leavers. These subgroup comparisons often highlight important issues that are specific to each site. For example, Massachusetts compares outcomes for leavers who reached their initial time limit (24 months) with other leavers. Although there are many interesting and important subgroup comparisons within leaver studies, these subgroups are not all comparable across studies. Among the subgroups that can be compared across studies, this synthesis has already reviewed employment outcomes for continuous leavers with other leavers. This next section considers differences in employed outcomes by race/ethnic affiliation.

Six studies report some information on employment and earnings by racial and ethnic groups. These results show that for the most part, black leavers have higher employment rates than white leavers. The evidence on earnings and for other race/ethnicity groups is more mixed. 17

Of the studies reporting some results on employment rates for different race/ethnic groups, five of the six find that black leavers have higher employment rates than white leavers (Table III.11). The difference in the percentages of black and white leavers employed at any time in the year after exit ranges from 6 percentage points in Arizona (78 percent of blacks compared with 72 percent of whites) to 14 percentage points in Florida (60 percent of blacks compared with 46 percent of whites). Similar differences are reported for employment in the fourth quarter after exit for Arizona, Missouri, and South Carolina. Only in Illinois are the employment rates slightly higher for whites (56 percent) than for blacks (54 percent). The study attributes this difference more to geographic differences in employment between Chicago and downstate Illinois than to race differences per se.

Table III.11:
Employment and Earnings for Single-Parent Welfare Leavers by Race/Ethnicity: Administrative Data Findings
  Race/Ethnicity Group
Black White Hispanic Other1

Employment Anytime in Year After Exit (%)

Arizona2

78 72 77 64

Florida

60 46 48 43

Georgia

80 67 n.a. n.a.

Missouri3,5

78 71 n.a. n.a.

Employment in Fourth Quarter After Exit (%)

Arizona2

53 49 54 43

Illinois

54 56 54 n.a.

Missouri3,5

64 54 n.a. n.a.

South Carolina5

61 53 n.a. n.a.

Mean Annual Earnings for Workers in Year After Exit ($)

Florida

7,037 6,361 7,732 8,236

Georgia

7,784 6,894 n.a. 8,572

Mean Earnings in Fourth Quarter After Exit ($)

Arizona2

2,503 2,618 2,487 2,171

Missouri3,5

2,900 2,550 n.a. n.a.

South Carolina4,5

798 850 n.a. n.a.

1Other includes Asian/Pacific Islander, Native American, and other unless otherwise specified
2Other category is Native American. A samll percent of caseload (less than 1%) is other race/ethnicity not included in this table..
3Figures listed under "black" represent all "non-white" leavers which include a small percent (less than 2 percent) of Hispanic, Native American, and other race/ethnicities.
4Reported earnings are mean monthly earnings in year after exit.
5Report data for all cases, not just for single-parent cases.

Four studies report employment results for other race/ethnic groups. Employment rates of Hispanic leavers are similar to black leavers in Arizona and Illinois. In Florida, however, the employment rate of Hispanic leavers at any point in the year after exit (48 percent) is similar to that of whites, and lower than rates for blacks. Arizona reports a much lower employment rate for Native Americans than for other racial/ethnic groups in both the year after exit and the fourth quarter after exit. Finally, Georgia also reports significantly lower employment rates for all non-white, non-black leavers, who make up about 2 percent of Georgia’s leaver sample.

Differences in earnings across racial/ethnic groups for those leavers that are employed are more varied across the studies. Five studies report some measure of earnings after exit by race/ethnicity. Florida and Georgia both report mean annual earnings for workers in the year after exit. They both find that blacks have higher earnings than whites; about $700 higher in Florida and $900 higher in Georgia. Earnings of Hispanic leavers in Florida are significantly higher than for blacks or whites, $7,732 a year. Both Florida and Georgia find the highest earnings among the “other” category, but this group is quite small in both studies.

Arizona and Missouri report mean earnings in the fourth quarter by race/ethnicity while South Carolina reports mean monthly earnings. Unlike Florida and Georgia, Arizona and South Carolina find that working white leavers have higher earnings than working black leavers. Missouri finds nonwhite leavers have quarterly earnings that are almost $400 higher than white leavers. And Arizona, in contrast to Florida, finds that Hispanic leavers have lower earnings in the fourth quarter after exit ($2,487) than black or white leavers; Native American leavers in Arizona have the lowest earnings levels ($2,171).

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D. What Barriers to Work Do Leavers Face?

Many of the ASPE-funded leaver studies asked leavers to identify barriers or obstacles they face in trying to find and keep jobs. Overcoming such barriers is crucial as welfare leavers seek to become self-sufficient. Unfortunately, the studies do not all ask about a common set of barriers and even when they do ask about the same barrier, studies do not necessarily ask about them in the same way. For example, some studies ask for a list of all barriers while others ask for respondents to identify the most important one. Further, some studies only ask non-working leavers about barriers to work. Consequently, it is difficult to assess just what the key barriers are for welfare leavers focusing solely on these leaver studies.

Table III.12 reports information on five common barriers: lack of skills, problems with child care, problems with transportation, health limitations, and caring for sick family members. In Massachusetts and Cuyahoga County, about two out of five leavers report that a lack of skills is a barrier to work. This is higher than the 15 percent of leavers in Arizona and Illinois citing a lack of skills as a major obstacle to work and far higher than the 3 percent in the District of Columbia. The share of leavers saying that problems with child care is a barrier to work also varies considerably across studies. In Illinois, Missouri, and the Bay Area, one third to one half of all leavers cite child care problems as a barrier to work, while in Arizona, DC, and Cuyahoga County, about one in five cite it. In Iowa and South Carolina, 13 and 15 percent of leavers, respectively, say that child care problems hinder their ability to work. The importance of transportation related problems also varies greatly across studies, ranging from 5 percent in Arizona to 44 percent in the Bay Area.

Table III.12:
Barriers to Work Facing Single-Parent Welfare Leavers: Survey Findings

State/Study

Exit Cohort Barriers to Work (%)
Education/Skill Child Care Transportation Health-self Health of Other

Arizona

1Q98 15 22 5 23 1 n.a.

District of Columbia2

4Q98 3 3 20 9 17 8

Georgia

1Q98 n.a. n.a. n.a. 5 4 10 4

Illinois2

3Q97 - 4Q98 15 40 5 27 20 6 n.a.

Iowa

2Q99 n.a. 13 6 23 9

Massachusetts2,7

Dec 1998 - Mar 1999 42 8 29 9 n.a. n.a.10 n.a.

Missouri2

4Q98 n.a. 33 36 n.a. n.a.

South Carolina2,11

Oct 1998 - Mar 1999 3 15 13 25 6

Cuyahoga Co.12

3Q98 38 22 n.a. 15 16 13

Bay Area14

4Q98 n.a. 52 44 n.a. n.a.

1Includes pregnancy.
2Report data for all cases, not just for single-parent cases.
35% report that being in school is a barrier.
4Own health includes report of disability only. An additional 9% report a drinking problem and 8% report a drug problem. Health of other refers to a child with health concerns that limit activity.
5Finding someone to care for children. 32% report that paying for child care is a barrier, 33% report that the fit between work and child care is a barrier, and 21% report that transportation to and from child care is a barrier.
6Includes only physical health problems. 10% have mental health problems.
7Currently not working or looking for work- reason not working/looking.
8Data reported are the average of the time limited and the non-time limited responses. Time limited responses represent 69% of the sample, while non-time limited responses comprise the remaining 31%.
929% is of non-time limited respondents, not reported for time limited closings.
1037% report being depressed or overwhelmed, based on an average of the time limited responses and the non-timed limited responses.
11Currently unemployed, reason for not working.
12Barriers to work- all leavers.
13Represents child health problems that limit respondent's ability to work.
14Barrier to full-time work.
Source: See Appendix B for a complete listing of the leavers studies referenced.

Finally, many studies ask about health related problems, which may be a barrier to work. Between one-fifth and one-fourth of leavers in Illinois, Arizona, Iowa and South Carolina report having a physical disability or health limitation, variously defined. Fewer than one in five report health limitations in DC, Georgia, and Cuyahoga County. Three of the studies also asked about caring for others who are ill as a potential obstacle. Sixteen percent of Cuyahoga County's leavers report caring for a sick family member inhibits work compared with 6 to 10 percent in DC, Georgia, Iowa, and South Carolina. Finally, the Illinois and Massachusetts studies ask about mental health issues; 10 percent of leavers in Illinois report mental health issues while well over one-third of Massachusetts non-working leavers report being depressed or overwhelmed. Georgia's study also asked specifically about drug and alcohol abuse, finding that just under one in ten leavers report these barriers.

Although no strong consistent findings on barriers emerge from these leaver studies, the results indicate that a substantial minority of leavers confront child care and health-related problems.

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E. Chapter Summary

Encouraging families to move off welfare and into jobs is a stated goal of the federal welfare reform law passed in 1996. These ASPE-funded studies of families leaving welfare show that, on average, about three-quarters of all leavers work at some point after exiting TANF and that about three out of five work at any given point in time. Their wages are above the federal minimum wage but are nevertheless low, averaging between $7 and $8 an hour. Although about half of all working leavers are offered health insurance through their jobs, only about one-third actually have coverage, and no more than half have paid sick leave or pension coverage. Paid vacations days are a bit more common. Finally, there is no single barrier to work that consistently affects a majority of leavers; however, a substantial minority of leavers must overcome child care and health-related problems in order to work.

Endnotes

15Note that the survey findings are based on the 1998 cohort of leavers while the administrative data findings are based on the 1997 cohort.
16Note that we report nominal monetary values. While inflation was very low during the late 1990s, a two-year difference between studies can represent about a five percent difference in purchasing power.
17 Differences in the distribution of leavers by race and ethnic make-up of the leaver cohorts across studies is reported in Chapter II.


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