The Welfare Indicators Act of 1994 requires the Department of Health and Human Services to prepare annual reports to Congress on indicators and predictors of welfare dependence. This Annual Report on Welfare Indicators, October 1998 is the second of these annual reports.
Welfare dependence, like poverty, is a continuum, with variations in degree and in duration. Families may be more or less dependent if larger or smaller shares of their total resources are derived from welfare programs. The amount of time over which a family depends on welfare might also be considered in assessing their degree of dependency. Although recognizing the difficulties inherent in defining and measuring dependence, the bipartisan Advisory Board on Welfare Indicators proposed the following definition:
A family is dependent on welfare if more than 50 percent of its total income in a one-year period comes from AFDC/TANF, Food Stamps and/or SSI, and this welfare income is not associated with work activities. Welfare dependence is the proportion of all families who are dependent on welfare.
The proposed definition, unfortunately, cannot be measured precisely at this time with currently available data. Most importantly, current data do not distinguish between cash benefits where work is required and cash benefits that are paid without work. Thus it was not possible to construct one single indicator of dependence. Instead this report includes a number of indicators addressing welfare recipiency, dependence, and labor force attachment. Selected findings discussed in more detail include the following:
- In 1994, the most recent year for which SIPP data are available, 5.6 percent of the total population were dependent in the sense of receiving more than half of total income from AFDC, Food Stamps, and SSI (see Indicator 1). This is approximately the same rate as the previous two years. This dependency rate would be lower if adjusted to exclude welfare assistance associated with working.
- Long-term dependency is relatively rare. Only 4 percent of those who were recipients in 1982, or less than 1 percent of the total population, received more than 50 percent of their income from AFDC and Food Stamps in 9 or 10 years over the next decade. Half of the 1982 recipients never received more than 50 percent of their income from AFDC and Food Stamps over the 1982-1991 time period (see Indicator 1, Figure IND 1b).
- In 1994, 46 percent of AFDC recipients, 38 percent of SSI recipients and 57 percent of Food Stamp recipients were in families with at least one person in the labor force (see Indicator 4).
- Individuals who receive AFDC or Food Stamps as children are more likely to receive benefits as adults (see Indicator 12).
Since the causes of welfare receipt and dependence are not clearly known, the report also includes a larger set of risk factors associated with welfare receipt. Indicators of deprivation are included as a supplement to the dependence indicators, ensuring that dependence measures are not assessed in isolation. The risk factors are loosely organized into three categories: economic security measures, measures related to employment and barriers to employment, and measures of teen behavior, including nonmarital childbearing. Additional data on welfare programs, poverty, and non-marital births are included in three appendices.