Endnotes
Are TANF leavers likely to have a sufficient history of employment and earnings to be monetarily eligible for UI if they lose their jobs? How long does it take them to establish monetary eligibility? Why are some leavers less likely to be eligible? In this chapter, we discuss basic patterns of potential UI monetary eligibility among former TANF recipients in the five WtW sites who left welfare and worked; our focus is on the monetary eligibility of these individuals during the two-year period after they exited TANF for jobs. We also consider how eligibility rates vary by employment status and TANF receipt during the year preceding the reference month. Because patterns of UI eligibility may vary among the group of former TANF recipients who lose their jobs, we also examine potential monetary UI eligibility among those who actually experienced a job loss during the two-year period since TANF exit. Finally, we conclude this chapter with a discussion of UI monetary eligibility rates for the full set of leavers, including those who left TANF for work.
Around 90 percent of TANF recipients who exited welfare and worked would have attained monetary eligibility at some point during the two-year period after TANF exit.(1) Considerably fewer (between 50 and 80 percent) would potentially have monetary eligibility in any given quarter after TANF exit. These numbers are high relative to the estimated monetary eligibility rates of around 33 percent in studies that used data from the pre-PRWORA period. Additionally, the majority of former TANF recipients who exited for work and did not have monetary eligibility had some earnings during the base period, but their earnings were too low or of insufficient duration to enable them to qualify.
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Across all sites, close to 90 percent of those who left TANF for work were likely to have attained monetary eligibility for UI at some point during the two-year period after TANF exit (Figure III.1). As the figure shows, most of those who are estimated to attain monetary eligibility do so during the first year after TANF exit. First-time monetary eligibility increases rapidly during the first three quarters after TANF exit, subsequently growing at a much more modest pace between quarters 4 and 8 after exit. The number estimated as likely to attain monetary eligibility is higher than the numbers found in previous studies of welfare recipients’ monetary eligibility (Vroman 1998; and Kaye 1997). The higher estimate is likely a function of the patterns of higher earnings and of more-stable employment among welfare recipients in recent times, which have been driven by both welfare reform’s strong emphasis on work and the strong economic conditions that prevailed during the study period.(2)
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| Sources: Administrative records data from selected
Welfare-to-Work Evaluation study sites, assembled by Mathematica Policy Research,
Inc. Note: Sample includes those who had left TANF within one year of the reference period and held a job around the time of TANF exit. The reference period varied between September 1999 through August 2000 across the states. |
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A significant fraction of those who would have attained monetary eligibility for UI also would have lost their eligibility at some point during the two-year period. We examined the extent to which those who would have been monetarily eligible for UI during the first year were likely to remain eligible during the remaining quarters of the two-year period. Across the sites, between 30 and 49 percent of TANF recipients who exited for work and who would have become eligible during the first year after exit would have lost their potential eligibility between the time they became eligible and the end of the eight-quarter period (Figure III.2). This finding suggests that, although many former TANF recipients may “ever” potentially attain monetary eligibility, there is considerable movement in and out of eligibility. Across the sites, only about half the sample members who would have attained eligibility within the first year after TANF exit would have retained it throughout the eight-quarter period. Finally, on average, those who exited TANF for work would have UI monetary eligibility for five to six quarters over the eight-quarter period after TANF exit; the exception was Tarrant County, Texas, where individuals potentially had UI monetary eligibility for just under four quarters (not shown).
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| Sources: Administrative records data from selected
Welfare-to-Work Evaluation study sites, assembled by Mathematica Policy Research,
Inc. Note: Sample includes those who had left TANF within one year of the reference period and held a job around the time of TANF exit. The reference period varied between September 1999 through August 2000 across the states. |
The fraction who would potentially have monetary eligibility in any given quarter after TANF exit increased steadily during the first four quarters after exit; across sites, 70 to 80 percent had monetary eligibility at the fourth quarter after exit (Figure III.3). Thereafter, potential monetary eligibility rates first slowly fell and then remained at around 50 to 70 percent during each quarter of the second year after exit. Although this pattern is similar across the five sites, potential monetary eligibility in any given quarter was relatively high in Cook County, Baltimore County, and Philadelphia, and somewhat lower in Phoenix and Tarrant counties. The patterns of potential monetary eligibility reflect the effects of the observed employment patterns in the sites in conjunction with the state UI rules in these sites.
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| Source: Administrative records data from selected
Welfare-to-Work Evaluation study sites, assembled by Mathematica Policy Research,
Inc. Note: Sample includes those who exited TANF and held a job within three months of TANF exit. |
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To study UI monetary eligibility in greater depth, we examined potential monetary eligibility rates according to employment and TANF receipt in the year preceding the reference month. We also examined potential UI eligibility rates among TANF leavers who experienced a job loss, and among all TANF leavers, including those who left for reasons other than work.
Human capital characteristics usually are important predictors of who is likely to attain UI monetary eligibility. We found that those who had any labor market experience during the year preceding the reference month were more likely to potentially have UI monetary eligibility than were those with no work experience during that year (Figure III.4). We also observed a relationship between TANF receipt and potential monetary UI eligibility, although the differences here are smaller. Overall, people who were on TANF for less than six months during the year preceding the reference month were somewhat more likely to potentially have monetary eligibility for UI in later periods than were those who received TANF more intensively during that year.
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| Source: Administrative records data from selected
Welfare-to-Work Evaluation study sites, assembled by Mathematica Policy Research,
Inc. Note: Sample includes those who exited TANF and held a job within three months of TANF exit. |
Between 12 and 20 percent of those who left TANF for work lost their jobs during each quarter of the first year after TANF exit for a job (not shown). Workers who lost their jobs tended to have considerably lower potential UI monetary eligibility rates than those who did not lose their jobs. These differences were the largest among workers who lost their jobs during the early period after TANF exit. For instance, workers who had lost their jobs for the first time during the second quarter after TANF exit had potential monetary UI eligibility rates of 33 to 45 percent across the sites as compared with 53 to 71 percent for those who had not lost their jobs until that time (Figure III.5). TANF leavers who lost their jobs for the first time during the fourth quarter or later were considerably more likely to potentially attain monetary eligibility (73 to 94 percent) largely because they had built up a history of employment by that time. Thus, although the overall rate of potential UI monetary eligibility for the group as a whole could become relatively high in later quarters, TANF leavers who lose their jobs during the first year of TANF exit—the group most likely to need UI assistance—are considerably less likely to qualify.
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| Source: Administrative records data from selected Welfare-to-Work Evaluation study sites, assembled by Mathematica Policy Research, Inc. | |
Between 10 and 20 percent of people who left TANF within the year following the reference month for reasons other than work potentially had monetary eligibility for UI during the two-year period after TANF exit (Figure III.6). These low rates are not surprising, as many people who leave TANF for non-work reasons never enter the labor market. Interestingly, among this group of TANF leavers, eligibility rates actually fell slightly during the early months after exit. Some members of the group had eligibility at the time of exit because they had some earnings during their reference year before they exited welfare. However, because they did not exit TANF for work, they did not have the employment history around the time of exit to qualify for UI. Eventually, as some of these people entered or reentered the labor market, potential monetary eligibility increased slightly for the group that exited TANF for reasons other than for work.(3) As we saw in Figure II.2 in the preceding chapter, those who exited TANF for reasons other than for work had very low employment rates, with only 20 to 25 percent having any earnings between quarters 4 and 8 after TANF exit.
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| Source: Administrative records data from selected
Welfare-to-Work Evaluation study sites, assembled by Mathematica Policy Research,
Inc. Note: Sample includes those who exited TANF and held a job within three months of TANF exit. |
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As we have seen earlier, a significant number of those who left TANF for work were monetarily ineligible for UI in any given quarter during the second year after exit. Why are some individuals unlikely to attain monetary eligibility for UI? Are they working, but in low-wage jobs and with irregular employment, so that their earnings are insufficient to qualify? Or did they have no employment during the relevant base period for that quarter? If the former reason explains the lack of eligibility, job retention and advancement may have to become an important part of TANF and UI program services. If the latter explanation applies, then it may be necessary to increase the TANF program’s emphasis on job search and basic skills training.
In Figure III.7, the portions of the graphs shaded gray show the fraction of individuals who had earnings during the base period for that quarter but who would not have had monetary eligibility for UI. For example, if we examine quarter 8, we see that around 18 to 28 percent of former TANF recipients were monetarily ineligible but had some base-period earnings for that quarter. (This group represents about two-thirds of those who did not attain potential monetary eligibility.) Most of these individuals (between half to over 90 percent across the sites) had earnings below the maximum qualifying levels, which would make them monetarily ineligible. In addition, most of them had worked only one quarter, and thus had no stable employment. The remaining individuals had enough earnings to meet the minimum earnings requirements but failed the earnings distribution requirements such as the proportion of high quarter earnings or the proportion of the earnings outside the high quarter to the whole base period earnings. The high fraction with low earnings and sparse employment histories reinforces the importance of providing job retention services to former TANF recipients to help them build stable employment histories.
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| Source: Administrative records data from selected
Welfare-to-Work Evaluation study sites, assembled by Mathematica Policy Research,
Inc. (a): Base period refers to base period for the relevat quarter after TANF exit. |
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In addition to monetary eligibility, nonmonetary factors can also make workers ineligible. People can become disqualified for nonmonetary reasons in one of two main ways. In most states, claimants who quit jobs voluntarily usually are ineligible for benefits. In some states, people who quit for a good cause (usually a work-related reason, such as a sudden change in the hours of work or schedule) may be eligible. The second reason for disqualification of workers with monetary eligibility is the workers’ availability to accept suitable employment. In many states, people who are available to work part time only are ineligible for benefits.
Although we do not have data from the five WtW sites on the fraction of clients who may have nonmonetary eligibility, data from the New Jersey study indicate that a considerable fraction of those with monetary eligibility may at some point be disqualified for nonmonetary reasons.(4) The findings from the New Jersey study indicate that nearly half of employed former TANF recipients quit their jobs; this rate is twice that of national quit rates.(5) About half of those in the New Jersey study who quit their jobs did so for personal reasons, such as a health problem, having to care for a child at home, inconvenient job location, or a transportation issue. Advocates of broadening the UI rules to enable low-wage workers to access benefits more easily have recommended wider use of good cause related to personal reasons, including child care and transportation problems.
The New Jersey study also found that about one in four TANF recipients had had part-time jobs as their current or most recent jobs. If we assume that these individuals would be available to work for only the same number of hours in case of job loss, then they could be disqualified for nonmonetary reasons. Of course, these numbers should be viewed only as a very rough proxy for the fraction who might become disqualified due to part-time employment. For instance, claimants may be available to work full time, or they may not always inform UI workers about the hours that they would like to work. Nonetheless, data on the high rates of quits among former TANF recipients and the relatively high number of part-time workers suggest that a considerably large fraction of those who have potential monetary eligibility might be disqualified for nonmonetary reasons.
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(1) Although all TANF recipients exited for employment, some had low enough earnings or did not work for long enough to ever attain potential monetary UI eligibility.
(2) It is also higher than the estimate of 75 percent for New Jersey (Rangarajan et al. 2002). The difference could be explained by the inclusion in the New Jersey study sample of individuals who reported in the survey that they had found jobs, but who did not have any UI reported employment data. The analysis shows that, with the exclusion of these individuals from the New Jersey analysis, nearly 90 percent of the New Jersey sample of TANF recipients who exited for work would have attained monetary eligibility for UI at some point during the two-year period since TANF exit.
(3) Studies that have examined these individuals show that some of them receive Supplemental Security Income, some live with an employed spouse or partner, and some may receive other sources of income. Still others do not have any of these forms of support and have been variously called disconnected workers, or least-stable leavers (Loprest 2002; Wood and Rangarajan 2003; and Zedlewski et al. 2003).
(4) The New Jersey study had survey data on all sample members, which included information on reasons for job separation, as well as information on hours worked.
(5) The New Jersey data on reasons for job separation are based on a period of relatively strong economic conditions; fewer people might voluntarily quit their jobs when economic conditions are weaker.
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