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In its report for the FY 2002 Appropriation for the Department of Health and Human Services, the Conference Committee stipulated for the fifth year that research within the Office of the Secretary should be dedicated to study the outcomes of welfare reform:
"Within the funds available, $7,125,000 is to continue to study of the outcomes of welfare reform and to assess the impacts of policy changes on the low-income population. The conferees recommend that this effort include the collection and use of state-specific surveys, state and federal administration data, and data administratively linking the National Directory of New Hires, other child support enforcement data, TANF and Medicaid records together. These studies should focus on assessing the well-being of the low income population, developing and reporting reliable and comparable state-by-state measures of family hardship and well-being, the utilization of other support programs and the impact of child support enforcement efforts. These studies should continue to measure outcomes for a broad population of current, former and potential welfare recipients, as well as other special populations affected by state TANF policies. The conferees further expect these studies to analyze how the earnings of custodial and non-custodial parents who are, or have had children who are, current or former welfare recipients have changed over time and whether the pattern is significantly different among states. The conferees request a report on these topics to be submitted to the House and Senate Appropriations Committees by May 1, 2002." (H. Rept. 107-342, pages 115-116)
The following report has been prepared by the Office of the Secretary, Office of the Assistant Secretary for Planning and Evaluation (ASPE), in response to the requirement for a report. Unless otherwise noted, this report discusses only the welfare outcomes research agenda supported by the targeted funding. No attempt has been made to reflect the separately funded welfare research agenda of the Department's Administration for Children and Families (ACF) (1) or ASPE's or the Department's health research agenda, except to the extent that some projects were supported jointly by welfare outcomes funding and funds from other sources.
The Personal Responsibility and Work Opportunity Reconciliation Act (PRWORA) of 1996 was a landmark event in our nation's welfare policy. The results of the reforms, based on a number of popular measures, have been dramatic. The number of families receiving Temporary Assistance for Needy Families (TANF) program cash benefits has declined substantially, marking the first-ever rapid caseload decline during an expanding economy. Employment among current and former welfare recipients has increased significantly, with the number of working recipients reaching all-time highs in fiscal years 1999 and 2000. In addition, the majority of mothers leaving welfare are employed after leaving. Earnings for welfare recipients continuing to receive cash assistance, and earnings for female-headed households in general, also have increased significantly. In addition, the child poverty rate continued to decline between 1996 and 2000, falling to its lowest rate in over 20 years.
Despite these gains, there is much to be done as we move to the next phase of welfare reform. States have had mixed success in fully engaging welfare recipients in work activities. While all states have met the overall work participation rates required by law, in 2000, in an average month, only about one-third of all families with an adult participated in work activities that were countable toward the state's participation rate. Substantial progress has been made nationwide in reducing teen births, but the proportion of births occurring outside of marriage remains relatively stable. Child poverty rates for African American and Hispanic children have also fallen dramatically during the past six years, although their poverty rates are still more than three times the rate for white, non-Hispanic children.
In addition, much remains to be learned as we move to the next phase of welfare reform. As a direct result of the dedication of research funds to study the outcomes of welfare reform, ASPE has contributed significantly to the scope, volume, and diversity of welfare reform research within the Department. "Welfare Outcomes" funding has enabled ASPE to sponsor or conduct a great number of studies designed to document trends in the low-income population (including both adults and children) as well as in the welfare recipient population. Our research agenda has also supported efforts to build state data capacity and data comparability through our support of monitoring studies, such as studies of families leaving welfare. Nonetheless, in its final report, the Panel on Data and Methods for Measuring the Effects of Changes in Social Welfare Programs convened by the National Research Council's Committee on National Statistics has identified some important data gaps and offered some conclusions and recommendations designed to build up the "science base" of welfare reform research. These are discussed in more detail in the Future Directions section later in this chapter.
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The dedication of research funds to studying welfare outcomes has enabled the Department to create a research, evaluation and data strategy designed to document the implementation of welfare reform and its effects, and to add to and enhance the information about welfare reform outcomes that is available to the Congress and other interested parties. Overall, our focus has been on creating an integrated picture of the low-income population, especially low-income families with children, combined with broader analyses of the economic condition, health and well-being, socio-demographic characteristics, and the social service needs of low-income individuals, families, and children. We believe this is consistent with both the Conference Committee's directives and with the far-reaching recommendations of the Panel on Data and Methods for Measuring the Effects of Changes in Social Welfare Programs.
There is a broad array of research about welfare reform being funded by the Department and other public and private sources. To optimize the potential that the targeted funds will increase the Department's understanding of the outcomes of welfare reform, ASPE has created, often with other funding partners involved, a portfolio of studies and strategies. Careful attention has been paid to identifying on-going research, evaluation, and data activities which could be enhanced or modified, identifying activities being funded or planned by other entities that might provide joint-funding opportunities, to identifying knowledge gaps, and to avoiding unnecessary duplication. We have used the targeted research funds to fully fund some projects, to fund specific portions of some larger studies, and to co-fund with other public and private agencies yet other projects. As a result, our research, evaluation and data activities cover a wide spectrum of welfare outcomes policy interests.
In keeping with the recommendations of the conferees, our research agenda over the past four years has covered a broad array of topics and approaches that complement other public and private efforts to assess the outcomes of welfare reform. We have funded or co-funded projects to study economic supports for poor families, children and youth, family formation, special populations and local service delivery issues, and cross-cutting topics. We have funded or co-funded competitive grant programs; projects to improve state data collection, comparability or capacity-building and analytic projects on welfare-related topics. We have funded or are funding projects that measure outcomes for welfare leavers, examine diversion practices, study the characteristics of the TANF caseload (or "stayers"), and measure family hardship and well-being including the utilization of other support programs. Projects also are in place to assess the effects of welfare reform on current, former and potential welfare recipients and other special populations (e.g., child-only cases, people with mental health and substance abuse problems and other disabilities, immigrant families) affected by state TANF policies. Our specific activities and plans in each of the areas recommended by the Conference Committee are summarized below.
Despite the breadth and scope of these efforts, from a research perspective our knowledge is still quite limited in many areas, and many factors can limit what research can accomplish. For example, there is wide variation in the design and application of policies across states, between local sites, and even from worker-to-worker. State policies and organizational structures continue to evolve and, in some cases, state responsibilities are further devolved. We know little about low-income families who do not become welfare recipients, and people who leave assistance can be difficult to track over time. Many variables other than welfare policies (such as the economy) affect the outcomes of welfare reform, and these variables often have confounding effects. Because of these factors, the ability of research, evaluation, and data to completely answer questions is always limited.
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ASPE's research plan for the targeted welfare outcomes funds for FY 2002
is designed to meet the overall objective of creating an integrated picture
of the low-income population, especially low-income families with children,
as we move to the next phase of welfare reform. We continue our focus on
broader analyses of the economic conditions, health and well-being,
socio-demographic characteristics, and the social service needs of low-income
individuals, families, and children. Our interest is to cover a wide spectrum
of policy interests focusing on welfare outcomes, poverty, working families,
supports for low-income populations, the hard-to-serve and other special
populations, and effects on children. We envision a research agenda that:
Implementing a broad-based research agenda that addresses this wide range of welfare outcomes research is one of ASPE's most important roles within the Department.
As in previous years, the welfare research, evaluation, and data projects planned for FY 2002 are designed to complement and enhance other efforts, both within and outside the federal government, to assess and monitor welfare outcomes without undue duplication. They include projects that address several of the Administration's priority themes, including encouraging work and self-sufficiency, promoting healthy marriage and strong families, improving child well-being, expanding state flexibility and accountability, expanding the use of faith-based and community-based organizations, and addressing the needs of special populations. Our planned projects also address the Conference Committee's research priorities for use of welfare outcomes funding. We are hopeful that these wide-ranging activities will not only increase our understanding of the outcomes of low-income families, but also contribute to the Department's ability to respond to questions about those outcomes. Specific projects planned for FY 2002 are described in Chapter III.
More broadly, we also continue to evaluate National Academy of Sciences recommendations to enhance the quality of welfare outcomes research. Conference report language accompanying the Fiscal Year 1998 and 1999 appropriations for welfare outcomes research funding included the recommendation that the Department "submit its research plan to the National Academy of Sciences (NAS) to provide further guidance on research design and recommend further research." Accordingly, we provided a total of over $1 million to the NAS in Fiscal Years 1998, 1999, 2000 and 2001 to convene an expert panel to evaluate current and future welfare reform research.
The aforementioned Panel on Data and Methods for Measuring the Effects of Changes in Social Welfare Programs' released an interim report, Evaluating Welfare Reform: A Framework and Review of Current Work, Interim Report, in September 1999. It provided a framework for conducting evaluations of welfare program changes, reviewed current Departmental efforts to evaluate these changes, and provided the Panel's initial conclusions and recommendations. The short-run recommendations for welfare evaluation strategies were consistent with the Department's approach to research on welfare reform, and many of the recommended steps were already being taken.
The Panel's final report, Evaluating Welfare Reform in an Era of Transition (2) , released in April 2001, highlighted some additional factors that need to be considered as the future direction of welfare research is contemplated. The report identified some important data gaps and offered numerous conclusions and recommendations with respect to defining research questions and outcomes of interest for measuring the effects of welfare reform, as well as the appropriate methods for answering those questions and the data needed to carry out these evaluations. It discussed research designs and methods for the study of welfare reform outcomes, and needed areas and topics of research. The report also addressed alternative federal and state data sources, the limitations of currently available data, and appropriate evaluation design and methods for analysis. In short, while applauding the Department for its broad-based welfare reform research agenda, it highlighted the need for further improvements and expansions in data collection, development of research questions, and methodological work to build up the "science base" of welfare reform research.
The Department has taken, or is taking, steps to address several of the Panel's recommendations. For example, our efforts to build capacity for conducting high-quality program evaluations at the state level and for conducting household surveys of low-income and welfare populations continue. We have committed resources to help improve national household survey questions to better measure program participation and benefit receipt. A project to improve the usefulness of state-level administrative data is planned. Improvements in state data reporting are included in the Administration's welfare reform proposal, as are changes to broaden the definition of assistance. State-specific data sets produced by each of the grantees studying welfare leavers have been made available for secondary data analyses of welfare outcomes measures. In addition, we have published a synthesis report that includes administrative data findings from all 15 of the ASPE-funded leavers studies. Study and consideration of other Panel conclusions and recommendations will continue.
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As we have noted, our overarching research objective in using targeted welfare
outcomes funds has been and is to create an integrated picture of the low-income
population, especially low-income families with children. We have devoted
substantial resources to covering a wide spectrum of policy interests focusing
on welfare outcomes, poverty, working families, supports for low-income
populations, the hard-to-serve and other special populations, and effects
on children. Welfare devolution and increased flexibility in the design and
delivery of program benefits have created substantial new challenges for
data collection and analysis to monitor welfare outcomes. To meet these
challenges, new and better data are needed at the state and local level.
Activities that support and enhance the collection, use, and linking of federal
and state administrative data and state-specific surveys are critical to
understanding the outcomes of welfare reform. Some examples of welfare
outcomes-funded or proposed studies that support the research recommendations
of the Conference Committee follow.
We have funded grants to states and large counties to gather a variety of information about individuals and their families who apply to TANF (including those who are formally or informally diverted) and the degree to which TANF applicants receive, or are aware of their potential eligibility for, Medicaid, food stamps, and other programs and services that are important in helping low-income families make a successful transition to work. (3) We are funding projects in six states to study the characteristics of their TANF caseloads, with particular attention to the personal, family and community factors that may present barriers to employment. Employment programs for low-income parents with barriers to work will be tested under the long-term, multi-site demonstration and evaluation of programs for hard-to-employ low-income parents in order to identify effective strategies for promoting employment and family well-being and to determine the effects of such programs on employment, earnings, income, welfare dependence, family functioning, and the well-being of children. We also are supporting a National Governors Association project to build state and local capacity to provide work supports which help low-income working parents sustain employment and advance in the labor market. A separate project is assessing the coping mechanisms used by low-income families, by examining factors that may help or hinder a family's efforts to be self-sufficient, including formal and informal support services, social support networks, and time and money management.
In addition, we are supporting a supplement to a broader study of the implications of welfare reform for low-income families in three cities that is examining how work participation requirements and time limits are affecting the service utilization, health and development, support networks, parenting and child care arrangements of adults and children with disabilities. We also are providing continuing support for an evaluation of the effectiveness of a substance abuse research demonstration project that includes coordinating screening, referral and treatment with employment and training or vocational services. Another project is examining trends in the demand for emergency assistance services, such as homeless shelters and food banks, from the mid-1990's to 2000. In recognition of the fact that the highest concentration of populations on TANF are living in neighborhoods where incarceration rates are also the highest, we funded a project that is investigating the effects of incarceration on low-income children, families, and communities.
Our researcher-initiated grants program spanning Fiscal Years 1999, 2000 and 2001 funded a variety of proposals looking broadly at low-income individuals (both adults and children) and their families. For example, one project is analyzing three groups of low-income populations - those who leave welfare for work, those who remain on welfare, and non-working welfare leavers - to examine the characteristics and circumstances of people who leave welfare and are not working and how welfare "stayers" are different from the "leavers." We also funded a proposal to examine the determinants of successful employment and wage outcomes among low-income workers. A separate project is looking at the employment rates, earnings, income and other measures of well-being among low-income families who have not applied for welfare or who have applied and been denied or diverted. Another project is examining how the lives of adolescents in single-mother, low-income families who received welfare during the early years of TANF are affected by their mothers' employment, and whether these changes in adolescents' lives are specific to families receiving welfare or common among single-mother, low-income families more generally. We also funded a project documenting the incidence of child disability among low-income and welfare-recipient, single-mother families and the impact that children with disabilities have on their families' ability to exit welfare and poverty. Yet another project is examining the conditions and capabilities of vulnerable mothers and fathers in the first few years following enactment of PRWORA to evaluate the impact of TANF and child support policies.
Our FY 2002 research plan includes several proposed projects that focus broadly
on the low-income population. For example, one study would focus on families
who exit and re-enter welfare, particularly those who return for multiple
times, in an attempt to identify the demographic characteristics and employment
outcomes of "cyclers," whether their patterns of benefit receipt and cycling
patterns have changed since PRWORA, and whether cyclers re-entering welfare
for the third time are treated differently than other families by local offices.
Another planned project would explore the coordination of TANF and one-stop
employment centers and the unique challenges involved in serving welfare
and ex-welfare clients, and the low-skilled in general, through one-stop
centers designed to serve people at all income and skill levels. A separate
planned project would attempt to better understand the different types of
child-only cases, the service needs of these families, and how states are
meeting those needs. These and other projects will help us achieve our goal
of covering all important low-income population groups in our research programs,
including current, former and potential welfare recipients.
ASPE has devoted substantial resources to supporting state-level data collection efforts and administrative data linking, making certain that national survey instruments are responsive to policy changes and needs, supporting and maintaining a wide range of Census Bureau data collection efforts, and supporting secondary analyses of state and national-level data to add to our understanding of the effects of welfare reform. We have also committed funds for several projects geared toward developing state-level data on hardship and/or program utilization.
One of our researcher-initiated grant projects is using state and county administrative data to study the demographics, welfare participation, employment retention, and post-exit earnings of five cohorts of welfare recipients in North Carolina, to examine welfare exits, employment stability, earnings mobility, recidivism, longer-term labor market outcomes, types of jobs recipients obtain and the range of wages for these jobs. Another is exploring the long-term utilization of food stamp and Medicaid benefits for two cohorts of welfare recipients who left cash assistance in Wisconsin. A separate study is examining the accuracy of self-reports of program participation in survey data by comparing self-reported program participation among Californians interviewed in the national Survey of Income and Program Participation (SIPP) with California administrative files of program participation. The New Jersey Department of Human Services is examining the extent to which former welfare recipients who leave welfare for work are likely to be eligible for Unemployment Insurance (UI), using a set of administrative and survey data from an ongoing evaluation. A study in Washington is estimating the effects of state-level policies (using a database of policy indicators in 11 program areas, including some transfer, tax, in-kind, and work support policies, over six years) on families' resources, resource packages, and experience of hardship.
We have provided support for an on-going project designed to match Social Security earnings records with samples of adult welfare recipients and non-recipients from Census surveys to help assess employment and earnings patterns and outcomes on the basis of baseline characteristics.
Our support for the administration of a welfare participation question in the State and Local Area Integrated Telephone Survey (SLAITS) has contributed to the fielding of a survey data element that, when combined with other data available from the survey, will permit the development of state-level estimates of the incidence of special health care needs of children of current and former welfare recipients, plus the health insurance status (including Medicaid and the State Children's Health Insurance Program, SCHIP) of current and former recipients. We also have provided funds to support the longitudinal New Immigrant Survey which will collect data on program utilization, health and economic status, and other characteristics among newly arriving low-income immigrant families in different states. ASPE's contribution will help ensure that comprehensive and relevant data are collected and analyzed and that the study focuses on how children in these families are faring. In addition, we have funded a project to advance our understanding of the value and limitations of measures of material hardship as a component of family well-being.
We have funded several projects which are utilizing existing administrative and survey data. For example, we have contributed support to Project on Devolution and Urban Change, a multi-disciplinary study of the implementation and impacts of welfare reform and welfare-to-work programs on low-income individuals, families and communities in four large urban areas, using, among other data sources, longitudinal administrative data for all families receiving AFDC/TANF or food stamps dating back to 1992. Under a separate task order we are analyzing survey data on the personal characteristics, potential barriers to employment, strengths and resources and preparation for employment of current TANF recipients in Illinois to explore the relationships of various factors contributing to employment outcomes. We also are supporting a small grant program for young scholars to encourage secondary analyses of new HHS-sponsored administrative and survey data sets to explore aspects of welfare reform. Finally, the competitive grants we awarded to states and large counties to examine welfare leavers, individuals and their families who apply to TANF (including those who are formally or informally diverted), and the characteristics of TANF caseloads, used or are using various combinations of state and federal administrative and survey data to report on a variety of welfare reform outcomes.
A project building on past ASPE-funded studies of welfare leavers and welfare
applicants is proposed for FY 2002. This study would focus on the subgroup
of TANF families who exit and re-enter welfare, particularly those who return
for multiple times. Another proposed project would utilize five federally
administered databases to provide state-by-state estimates of important welfare
outcomes. Projects such as these support the overall goal of ensuring that
good data are available to create an integrated picture of the low income
population, especially families with children, in the wake of welfare
reform.
The Federal Parent Locator Service (FPLS), operated by ACF's Office of Child Support Enforcement (OCSE) is primarily a national system to help states locate non-custodial parents, alleged fathers, and custodial parents so they can establish and enforce child support obligations. The Personal Responsibility and Work Opportunity Reconciliation Act (PRWORA) expanded the data available in this system to include information on child support cases and wage and employment data, including the National Directory of New Hires.
PRWORA also authorized HHS to retain samples of this data and use them for research purposes likely to contribute to achieving the purposes of titles IV-A (Temporary Assistance for Needy Families) or IV-D (Child Support Enforcement and Paternity Establishment). The Department has awarded a contract to implement an FPLS research database, in conjunction with TANF and Medicaid data, that will provide information about the effects of welfare reform on TANF, Medicaid and child support participants, and help identify the significance of program interactions in increasing self-sufficiency among low-income families. The analysis from the database also will assist federal and state program oversight, research, statistical reporting, and the policy and evaluation purposes related to the TANF and child support enforcement programs and the low-income populations they serve. Currently these databases are not linked. While some limited cross-sectional matches are currently possible between TANF and the child support enforcement databases, there is no mechanism for creating a longitudinal database that would permit analysis of client and program interactions over time.
ASPE is working with OCSE, ACF's Office of Planning, Research and Evaluation (OPRE), and the Centers for Medicare & Medicaid Services' Office of Strategic Planning to develop this project, which builds on a feasibility study undertaken by ASPE and ACF in FY 1998 to examine research needs and database design issues. Departmental privacy, legal, and technical staff will be consulted, as well as appropriate outside experts. Assuming all the legal and technical issues can be resolved, this phase of the database project is expected to be completed by the end of 2003.
In its current form the expanded FPLS comprises one of the most comprehensive sources of employment information available anywhere, but does not include key program participation and demographic variables. Combined with other administrative data, such as the Medicaid Statistical Information System (MSIS), State Medicaid Research File (SMRF) and the TANF databases, it offers the opportunity to answer questions about the programs and populations of interest that previously we have been unable to answer. Such data matching could allow us to compare the TANF and/or Medicaid populations with similarly situated non-TANF and/or non-Medicaid families, compare families within and outside the child support enforcement system, and examine interactions between the three programs.
Using these databases, cross-sectional analysis will provide very important
point-in-time estimations of the current IV-D, IV-A, and Medicaid policy
environments and a snap-shot of the characteristics of various populations
of interest to HHS. As noted above, some point-in-time analysis can be done
with relatively simple cross-matches between existing data files. For example,
FPLS data have been matched to some of the "welfare leavers" studies to provide
data on employment and earnings. However, the planned longitudinal database
would allow us to better address policy questions such as:
In addition to the linked micro-level administrative data, state macro-level policy, program and economic variable files also will be developed for use in conjunction with the database. These variables would include such things as annual state TANF benefit levels, Medicaid service packages, unemployment and not-in-the-labor-force rates, population poverty levels, program investments, paternity establishment rates and utilization of child support enforcement techniques. Such variables will allow us to examine state-by-state policy effects.
Our FY 2002 proposed research agenda includes a joint ASPE-ACF-CMS project to support the FPLS, TANF and Medicaid data warehouse to meet the on-going information needs of all the participating agencies. Another proposed project will link several federally administered databases (including TANF closed cases, the NDNH and quarterly earnings database) to provide state-by-state estimates of welfare outcomes for former TANF recipients. We also plan a project to examine how child support status (i.e., paternity established, order established, receipt of child support) interacts with TANF exit or re-entry, and coordination between the TANF and child support agencies. We anticipate that some questions could be answered through state administrative data matching, and others through site visits to states that demonstrate promising practices.
The Department is committed to advancing its welfare outcomes research agenda. The research, evaluation and data projects funded by the targeted Policy Research funds are critical to understanding the outcomes of welfare reform, and crucial to the Department's ability to respond to questions about those outcomes. The projects funded in FYs 1998, 1999, 2000 and 2001 cover a broad array of topics. We continue to provide leadership in national-level survey work and are working to facilitate greater comparability in state and local level studies and increase state and local capacity for data collection efforts.
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Chapter II summarizes the results and findings we have received from projects funded in FYs 1998, 1999, 2000 and 2001 that have not been reported in previous reports. Chapter III provides an overview of our proposed FY 2002 research plan for welfare-outcomes funded projects. Chapter IV describes the current status and target completion dates of continuing projects funded by the targeted policy research appropriations in FYs 1998, 1999, 2000 and 2001. A synthesis of findings from the ASPE-funded grants to states and localities to study welfare applicants/diversion is included as Appendix A.
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1. Information on ACF's welfare related activities can be found at <www.acf.dhhs.gov/news/welfare/index.htm>. Information on ACF's welfare research activities can be found at <http://www.acf.dhhs.gov/programs/opre/rd&e.htm>.
2. Copies of the Panel's interim and final reports, as well as its collection of methodological papers, Studies of Welfare Populations, Data Collection and Research Issues, are available through the National Academy of Sciences' website at <www.nas.edu/nap-cgi?Search=evaluating+welfare+reform>.
3. See Appendix A for a synthesis of early findings from grants to states and localities to study welfare reform outcomes, with an emphasis on TANF applicants and diversion.
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