Endnotes
In addition to knowing about the extent of potential UI eligibility, it is also useful to know the amount of benefits that eligible claimants can receive, as well as for how long they can receive benefits. Weekly benefit levels are determined individually by each state and typically are set at 40 to 60 percent of the individual’s average weekly wages, up to a maximum. Individuals who attain eligibility for UI can receive benefits once per week for a certain duration based on weeks worked in the base period, usually for a maximum of 26 weeks. In this chapter, we briefly describe the amounts of UI benefits that former TANF recipients who leave welfare for work potentially can receive, the potential duration of the benefits, and the maximum benefit levels.
We found that, across all the sites, potential average UI weekly benefit amounts for former TANF recipients eligible for these benefits were higher than TANF payments. Potential average UI weekly benefit amounts were about $155 to $200 per week. These figures are considerably higher than the TANF benefit amounts in each state, although how much higher depends on the state’s TANF benefit generosity. In addition, because many former TANF recipients have low earnings, only a small number of individuals in the sites would be likely to reach the maximum weekly benefit levels set by their states. Former TANF recipients in Phoenix were the exception, where nearly one in three of those potentially eligible would have their benefits capped below what they would otherwise qualify for.
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Former TANF recipients who had exited welfare for work and who potentially had monetary eligibility for UI would likely be able to receive an average UI weekly benefit amount of between $155 and $200 per week (Table IV.1), which would translate to around $675 and $850 per month. The amount of benefits that an individual can potentially receive is a function of his or her earnings in the base period, as well as of the wage replacement rate and maximum weekly benefits set by the state.(1) The average weekly benefit amounts were the highest in Baltimore County, where former recipients had the highest level of earnings, and the state had relatively high wage replacement rates. In contrast, they were the lowest in Cook County; in that site, even though earnings were comparable to those in the other sites, the lower wage replacement rate led to relatively low potential benefit levels. Thus, it appears that state UI program parameters may drive more of the variation in potential benefits across the sites than do the earnings of clients. .(2)
| Phoenix, AZ |
Cook Co., IL |
Baltimore Co., MD |
Philadelphia, PA |
Tarrant Co., TX |
|
|---|---|---|---|---|---|
| Percentage with WBA of: | |||||
Less than $100 |
13 | 26 | 16 | 15 | 18 |
$100 to $150 |
22 | 27 | 13 | 22 | 25 |
$151 to $200 |
25 | 23 | 19 | 23 | 24 |
$201 to $250 |
40 | 13 | 16 | 19 | 18 |
$251 to $300 |
— | 6 | 28 | 11 | 8 |
More than $300 |
— | 6 | 8 | 10 | 9 |
(Average amount) |
($165) | ($155) | ($199) | ($187) | ($175) |
| WBA Replacement Rate of Weekly Wages(a) | .56 | .49 | .55 | .52-.59 | .52 |
| Maximum WBA in 2001 | $205 | $296 | $280 | $430 | $294 |
| Sample Size | 1,740 | 8,472 | 681 | 6,989 | 784 |
| Source: Calculations from
administrative records from selected Welfare-to-Work evaluation states, and
state UI program rules, assembled by Mathematica Policy Research, Inc. Note: Sample includes those who exited TANF for work within 12 months of reference date and were ever monetarily eligible for UI within the 8 quarters following TANF exit. WBA = weekly benefit amount. (a): Refers to high-quarter wages, except for Illinois, which is based on the two highest-quarter wages. |
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Potential average weekly benefits increase somewhat over time across all the sites, reflecting an increase in people’s earnings over time (Table IV.2). These UI benefit levels are relatively generous when compared with the maximum TANF grant of $187 to $430 per month for a family of three with no other income (shown in Table IV.2). The average monthly amount of TANF benefits these TANF recipients would actually receive is likely to be somewhat lower, because their other income will count toward the calculation of their TANF benefits.
| Phoenix, AZ |
Cook Co., IL |
Baltimore Co., MD |
Philadelphia, PA |
Tarrant Co., TX |
|
|---|---|---|---|---|---|
| Quarter After TANF Exit | |||||
0 |
$135 | $111 | $169 | $121 | $132 |
1 |
130 | 115 | 172 | 124 | 132 |
2 |
139 | 123 | 170 | 143 | 144 |
3 |
145 | 130 | 169 | 157 | 152 |
4 |
151 | 136 | 170 | 164 | 160 |
5 |
156 | 142 | 177 | 172 | 167 |
6 |
161 | 148 | 187 | 179 | 173 |
7 |
162 | 152 | 195 | 183 | 175 |
8 |
165 | 155 | 199 | 187 | 175 |
| WBA Replacement Rate of Weekly Wages(a) | .56 | .49 | .55 | .52-.59 | .52 |
| Maximum WBA in 2001 | $205 | $296 | $280 | $430 | $294 |
| Sample Size(b) | 1,229-2,365 | 6,549-11,543 | 454-801 | 3,694-8,403 | 545-1,029 |
| Source: Calculations from
administrative records from selected Welfare-to-Work evaluation study sites,
and state UI program rules, assembled by Mathematica Policy Research, Inc.
Note: Sample includes those who exited TANF for work within 12 months of reference date and were ever monetarily eligible for UI within the 8 quarters following TANF exit. WBA = weekly benefit amount. (a): Refers to high-quarter wages, except for Illinois, which is based on the two highest-quarter wages. (b): Sample size ranges represent the minimum and the maximum sample sizes for which the averages of WBA were computed across the quarters. |
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As discussed, UI weekly benefit amounts are calculated as some fraction of an individual’s average base-period weekly earnings. However, each state also sets a limit at which a claimant’s weekly benefits are capped. If very few former recipients who are claimants have benefits that exceed their cap, then in essence, an increase in the maximum benefit levels would not affect the benefits these individuals would receive. In contrast, if many claimants “top out” at the maximum benefit levels, then any increase in the maximum benefit level would likely affect more individuals. Welfare recipients usually are low-wage workers, and it is possible that many do not earn enough to reach the maximum and, hence, may be capped at that level. If this is the case, an increase in the maximum weekly benefit levels may not benefit these individuals much.(3) The extent to which this is likely to be the case depends on the level at which a state sets its maximum weekly benefit amount, the wage replacement rate, and the earnings levels of individuals.
We found some variation in the rate at which individuals reach the maximum weekly benefit amount cap. In Philadelphia, where the maximum weekly benefits are set at fairly high levels, very few former TANF recipients would have reached the maximum benefit levels (Table IV.3). Similarly, in Cook County and Tarrant County, relatively modest maximum weekly benefit amounts combined with modest earnings levels and low wage replacement rates also would have led very few former TANF recipients in those sites to hit the maximum. In contrast, low maximum weekly benefit amounts would have led close to one-third of workers to reach the maximum benefit level in Phoenix, and the high earnings combined with the modest replacement rate of 55 percent would have led one in four former TANF recipients in Baltimore County to reach that level.(4)
| Phoenix, AZ |
Cook Co., IL |
Baltimore Co., MD |
Philadelphia, PA |
Tarrant Co., TX |
|
|---|---|---|---|---|---|
| Quarter After TANF Exit | |||||
0 |
18 | 2 | 26 | 0 | 3 |
1 |
16 | 2 | 24 | 0 | 2 |
2 |
17 | 2 | 20 | 1 | 2 |
3 |
19 | 2 | 16 | 1 | 3 |
4 |
23 | 2 | 16 | 1 | 4 |
5 |
26 | 3 | 18 | 1 | 6 |
6 |
31 | 3 | 21 | 1 | 6 |
7 |
34 | 4 | 23 | 2 | 6 |
8 |
36 | 4 | 24 | 2 | 6 |
| Excess Amount in Quarter 8, Over the Maximum for Those Who Reach the Maximum | $71 | $106 | $141 | $20 | $88 |
| Maximum WBA in 2001 | $205 | $296 | $280 | $430 | $294 |
| Sample Size(a) | 1,229-2,365 | 6,549-11,543 | 454-801 | 3,694-8,403 | 545-1,029 |
| Source: Calculations from
administrative records from selected Welfare-to-Work evaluation study sites,
and state UI program rules, assembled by Mathematica Policy Research, Inc.
Note: Sample includes those who exited TANF for work and were monetarily eligible for UI during the quarter. WBA = weekly benefit amount. (a): Sample size ranges represent the minimum and the maximum sample sizes for which the percentages were computed across the quarters. |
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In addition to computing the amount of benefits that claimants can receive, states must also determine the duration of benefits. Because the UI program provides partial and temporary wage replacement for people who have lost jobs, the potential duration of benefits generally is limited, usually to no more than 26 weeks. A few states follow a uniform-duration rule for all workers; all eligible claimants receive benefits for a uniform amount of time, most typically 26 weeks. Most states have a variable-duration rule, where duration is determined in one of two ways. Some states first establish a maximum benefit level as a fraction of the base-period earnings, which, in conjunction with weekly benefits, can be used to compute duration. Other states use an average weekly wage method and set potential benefits as a fraction of the weeks worked during the base period. Three of the five study states (Illinois, Maryland, and Pennsylvania) essentially have a uniform-duration rule.(5)
The average potential duration of benefits for former TANF recipients in the three of the five study sites with a uniform-duration rule was essentially 26 weeks (Figure IV.1). Average duration was somewhat lower in the remaining two sites (Phoenix and Tarrant County). Potential duration in those two sites remained basically unchanged during the first few quarters after TANF exit and then, as former recipients gained work experience and increased their earnings during the base period, increased somewhat to about 22 weeks in Phoenix and to 18 weeks in Tarrant County. Tarrant County’s former TANF recipients had particularly low durations, as the formula used to calculate the proportion of base-period weeks is set at 27 percent in Texas, compared with 33 percent in most other states in this study.
|
| Source: Calculations from administrative records from selected
Welfare-to-Work evaluation study sites, and state UI program rules, assembled
by Mathematica Policy Research, Inc. (a): Philadelphia has two uniform Potential durations(15 weeks or 26 weeks). A small fraction in our sample had 10 weeks of Potential duration. |
| Phoenix, AZ |
Cook Co., IL |
Baltimore Co., MD |
Philadelphia, PA |
Tarrant Co., TX |
|
|---|---|---|---|---|---|
| Percentage with MBA of: | |||||
Less than $2,000 |
17 | 14 | 9 | 9 | 31 |
$2,001 to $3,000 |
19 | 20 | 11 | 13 | 19 |
$3,001 to $4,000 |
17 | 21 | 10 | 18 | 17 |
$4,001 to $5,000 |
15 | 18 | 15 | 19 | 13 |
$5,001 to $6,000 |
32 | 12 | 12 | 15 | 9 |
$6,001 to $7,000 |
— | 7 | 12 | 12 | 4 |
More than $7,000 |
— | 9 | 31 | 16 | 7 |
(Average amount) |
($3,710) | ($4,018) | ($5,176) | ($4,856) | ($3,133) |
| Sample Size | 1,740 | 8,472 | 681 | 6,989 | 784 |
| Source: Calculations from
administrative records from selected Welfare-to-Work evaluation states, and
state UI program rules, assembled by Mathematica Policy Research, Inc. MBA = maximum benefit amount |
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There was considerable variation across the study sites with respect to the potential maximum cumulative amount of benefits for which claimants would be eligible. For instance, on average, at the eighth quarter after TANF exit, potential maximum cumulative benefit amounts ranged from slightly more than $3,000 in Tarrant County to more than $5,000 in Baltimore County (Table IV.4). Additionally, the potential maximum cumulative benefits amounts for which claimants would be eligible increased over time, as former TANF recipients gained work experience and accumulated higher earnings (Table IV.5).
| Phoenix, AZ |
Cook Co., IL |
Baltimore Co., MD |
Philadelphia, PA |
Tarrant Co., TX |
|
|---|---|---|---|---|---|
| Quarter After TANF Exit | |||||
0 |
$2,781 | $2,885 | $4,384 | $3,113 | $2,064 |
1 |
2,538 | 3,003 | 4,464 | 3,217 | 1,983 |
2 |
2,609 | 3,195 | 4,424 | 3,705 | 2,156 |
3 |
2,775 | 3,389 | 4,387 | 4,075 | 2,468 |
4 |
3,176 | 3,544 | 4,421 | 4,265 | 2,831 |
5 |
3,475 | 3,690 | 4,606 | 4,460 | 3,091 |
6 |
3,614 | 3,841 | 4,852 | 4,641 | 3,232 |
7 |
3,671 | 3,948 | 5,062 | 4,752 | 3,303 |
8 |
3,710 | 4,018 | 5,176 | 4,856 | 3,374 |
| Sample Size(a) | 1,229-2,365 | 6,549-11,543 | 454-801 | 3,694-8,403 | 545-1,029 |
| Source: Calculations from
administrative records from selected Welfare-to-Work evaluation states, and
state UI program rules, assembled by Mathematica Policy Research, Inc. Note: Sample includes those who left TANF for work and were monetarily eligible for UI during the quarter. (a): Sample size ranges represent the minimum and the maximum sample sizes for which the averages of MBA were computed during the period. |
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(1) As described in Chapter I, the wage replacement rate refers to the percentage of the claimant's weekly wages earned during the base period that would be replaced by UI benefits.
(2) While total base-year earnings seem to vary moderately across sites, as shown in Table IV.4, the variations become less significant when examined as weekly earnings, the unit in which UI benefit payments are determined.
(3) In the next chapter, we examine the sensitivity of average weekly benefit amounts that claimants can potentially receive to increase in the maximum weekly benefit amounts.
(4) While we do not have comparable data for the WtW evaluation states, we know that roughly one-quarter of New Jersey's entire UI caseload had weekly benefits at the maximum during the late 1990s and early 2000s. In that state, very few former welfare recipients had reached the maximum benefit levels. The difference between the two groups is driven by the generally low wages earned by the population of former TANF recipients. Based on these data, we suspect that the fraction of state UI caseloads obtaining weekly benefits at the maximum level is considerably larger in Arizona and Maryland than in the other WtW study states, as a relatively large fraction of the TANF recipients in our sample were at the maximum weekly benefit levels in those two study sites, compared with the other study sites.
(5) Pennsylvania has two flat durations (a 16-week duration and a 26-week duration) based on whether a claimant worked for less than or more than 18 weeks during the base period, counting weeks with earnings of at least $50 per week.
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