- Research Questions
- Data Sources
- Study Limitations
- Characteristics of the Study States
- Key Findings
- Potential Next Steps
The 1996 Personal Responsibility and Work Opportunity Reconciliation Act (PRWORA) made unprecedented changes to the welfare system in the United States, eliminating the 60-year-old Aid to Families with Dependent Children (AFDC) program and replacing it with a block grant to states to create the Temporary Assistance for Needy Families (TANF) program. A system that once focused on the accurate delivery of cash benefits now focuses on encouraging families to make the transition from welfare to work. Part of this shift translates into a dramatic increase in the range of circumstances in which families' welfare benefits can be reduced or canceled. In particular, sanctions financial penalties for noncompliance with program requirements have become central features of most states' efforts to promote self-sufficiency through their TANF programs. A primary goal of work-oriented sanctions is to encourage TANF recipients who might not be inclined to participate in work activities to do so. A secondary goal is to encourage greater reporting of earnings, especially among families who work in jobs where earnings are not reported through official channels. The logic behind sanctions is that adverse consequences can be used to influence the decisions clients make. Sanctions have long been used to enforce program requirements. However, with the emergence of "full-family" sanctions that eliminate all of a family's cash grant, the imposition of work requirements on a greater share of the TANF caseload and greater emphasis on encouraging TANF recipients to become self-sufficient, they have taken on much greater significance.
While consensus holds that sanctions have been an important policy change implemented through state welfare reform efforts, they are among the least studied. Additional information on the role sanctions have played in welfare reform can help inform policy discussions regarding whether all states should be required to impose more stringent sanctions and help program administrators identify strategies for using sanctions to promote greater compliance with program requirements. This report presents findings from a study of the use of sanctions in two local welfare offices in each of three states Illinois, New Jersey, and South Carolina.
The implementation of more stringent sanctions has been accompanied by keen interest in how sanctions are used and their associated outcomes. In a review of earlier studies examining the use and effectiveness of TANF sanctions (Pavetti, Derr, and Hesketh, 2003), we found the following:
- Sanctions are imposed relatively often, with studies following a cohort of recipients reporting sanction rates between 45 to 52 percent over a 12- to 18-month period.
- Despite some variation, most studies find that sanctioned families are more likely than nonsanctioned families to exhibit one or more characteristics that make them harder to employ.
- Studies consistently find that families that have left the welfare rolls due to a sanction are less likely than their nonsanctioned counterparts to be employed and more likely to return to the welfare system.
- The few studies that have investigated variations in state sanction policies to determine whether stricter sanction policies influence TANF recipients' participation decisions find that stricter sanctions lead to greater caseload declines and increased exits from TANF to employment.
The research questions examined in this study are similar to those addressed in previous studies. However, two features make the present study unique: (1) we use comparable methodologies and data from multiple states, which provides much greater contextual information for understanding how and how often sanctions are used, and (2) we combine analysis of case study, administrative, and survey data to provide a comprehensive analysis of the use of TANF sanctions. These features permit us to add to both the depth and breadth of our knowledge of how TANF sanctions are being used to encourage participation in work activities and movement toward self-sufficiency.
Our examination focuses on four important research questions:
- How have sanctions been implemented in local welfare offices? In most states, it is the state that formulates sanction policies. Despite considerable documentation on the structure of state sanction policies, little information exists on how these policies are applied in practice. Of particular interest is how much discretion workers exercise in implementing TANF sanctions and how workers and local program administrators balance individual client needs with work requirements.
- How often are sanctions imposed? Previous studies of TANF sanctions rely on a broad range of strategies to examine how often sanctions are used. However, differences in methodology have made it difficult to interpret estimates across studies. Thus, our study applies the same methodology in three states to increase our understanding of how often sanctions are used and to identify what factors might contribute to any observed differences.
- How do the characteristics of sanctioned and nonsanctioned recipients compare? Previous studies find that sanctioned recipients are more likely than nonsanctioned recipients to exhibit characteristics that are associated with longer welfare stays and lower rates of employment. However, only a few of these studies compare sanctioned versus nonsanctioned families in terms of the existence of personal and family challenges (such as mental health, substance abuse, and domestic violence issues) and logistical challenges (such as child care and transportation). This information can help clarify whether particular groups of families are at higher risk of receiving sanctions. By relying on survey data collected to examine the characteristics of the current TANF caseload in two of the three study states, the present study can compare the presence of a broad range of assets and liabilities among sanctioned and nonsanctioned recipients.
- How do sanctioned recipients fare over time? Given that many sanctioned families face the potential of eventually losing all their cash assistance, policymakers have expressed considerable interest in knowing how sanctioned recipients fare over time. What proportion eventually complies with program requirements? What proportion finds employment at the time of sanction or shortly thereafter? By exploiting the longitudinal nature of the administrative data available in all the study states and using detailed information available on employment status over time in one state, we are able to explore these questions in some depth.
We selected the three study states based on the availability of data, collected for other research studies, which could be used to examine the use of TANF sanctions. In each state, we supplemented the existing data with additional data collected specifically for the present study.
Administrative Data. In each of the study states, we use administrative data on single- parent families (excluding child-only cases) to examine how often TANF sanctions are imposed and how the rate of return to the welfare system compares between sanctioned and nonsanctioned families. Our analysis examines the use of TANF work sanctions among a cohort of recipients whom we follow over time. In all three states, the administrative data include information on basic demographic characteristics as well as welfare receipt and sanctioning status over time. The time at which the administrative data sample was selected for the study varies across the states, but in all cases it occurred several years after major reforms were implemented and after substantial caseload declines had already occurred.
Survey Data . Survey data are available for a randomly selected subsample of recipients in all three states, and comparable data are available in South Carolina and Illinois. South Carolina and Illinois both fielded a telephone survey of a subsample of recipients to examine the assets and liabilities of the "current" TANF caseload. While each survey included some state-specific questions, most questions were identical, ensuring comparability across the states. Comparable data are not available in New Jersey. However, we do have detailed survey data on the timelines of employment that allow us to examine employment and TANF receipt over time in New Jersey.
Case Studies. For purposes of the present study, we conducted case studies of the implementation of TANF work sanctions in two local offices in each of the three states. The states selected the local sites. A two-person team, made up of a researcher from Mathematica Policy Research, Inc. (MPR) and a research analyst from our subcontractor, AFYA, Inc., conducted the visits, which lasted about three days per state. During the visits, we interviewed TANF administrators, case managers, eligibility workers, and employment service providers. We also reviewed a small number of cases with workers and obtained written reports and copies of sanction notices and other relevant materials.
This study was designed to increase our understanding of how and how often work-oriented sanctions are used. As is true of many studies of its kind, this study suffers from several important limitations. First, the study uses data that was collected for other purposes. While some comparable administrative data is available for all the states, some data of interest is available for only one or two states. More important, because the study states were selected based on the availability of data they do not represent the full range of state experiences in using TANF work-oriented sanctions. Because information on the use of sanctions is scant, we have no way of knowing how well their experiences represent the experiences of other states. Second, because we do not have data that compares the experiences of recipients who have and have not been subject to a sanction or have been subjected to different sanction policies, we cannot answer important questions about the effectiveness of sanctions in general or the relative effectiveness of different types of sanctions. Finally, because our site visits were conducted to only two local sites and we conducted interviews with a limited number of program staff, we cannot be certain that we captured all important aspects of how sanctions have been implemented at the local level.
The three study states all implemented some variant of a full-family sanction (see Table ES.1). Illinois and New Jersey both implemented a gradual full-family sanction while South Carolina implemented an immediate full-family sanction. When Illinois sanctions a family for the first time, it reduces the grant by 50 percent for up to three months and then eliminates the grant entirely. New Jersey eliminates the adult portion of the grant for three months and then closes the case. Illinois and New Jersey both require a sanction to be in place for a minimum of one month before lifting it. South Carolina lifts the sanction immediately after the recipient comes into compliance with program requirements; however, recipients are required to participate for 30 days before they are considered to be in compliance, making the minimum sanction period comparable to that in New Jersey and Illinois. In New Jersey, recipients must participate in program activities for 10 consecutive days to have their sanction lifted. In Illinois, the compliance period and requirements are left to the discretion of the case manager.
|Dimension||All States||Illinois||New Jersey||South Carolina|
|# of States|
|Type of sanction||Partial
Pay for performance
|Gradual full-family||Gradual full-family||Immediate full-family|
|Minimum duration||No minimum, until compliance
|1 month||1 month||No minimum|
|Cure requirements||Willingness to comply
Period of compliance
|Willingness to comply||Compliance for 10 consecutive days||Compliance for 30 consecutive days|
|Approach to repeated noncompliance||More stringent sanction
Longer minimum duration
Stricter cure requirements
Reapplication for benefits
Life-time ban on assistance
|3-month minimum duration;
immediate full-family for third sanction
|3-month minimum duration;
immediate full-family for third sanction
|Same as for first instance|
|Source: Welfare Rules Database, Urban Institute 2000; State Policy Documentation Project.|
In each of the study sites, in-house welfare agency staff have primary responsibility for providing case management services, including conducting assessments, developing employment plans, monitoring and tracking participation, and imposing and lifting sanctions. Employment and training service providers (some contracted and some in-house) also play an important role in implementing TANF sanctions. Their responsibilities include (1) providing information to recipients on work requirements and consequences for noncompliance; (2) providing work-related activities in which TANF recipients can participate; (3) monitoring daily participation in work activities; and (4) participating in case conferences and conciliation reviews conferences for TANF recipients who are experiencing participation problems or are at risk of sanction.
Several of the welfare offices created specialized positions or units to streamline the process for implementing TANF sanctions. In one local office in Illinois, an employment and training liaison handles monitoring and tracking of all 900 TANF recipients participating in employment and training services. Both local offices in New Jersey created separate units to implement eligibility changes for sanctioned TANF recipients. The units handle all transactions involved in executing a sanction and monitoring its progression over time. Finally, one local office in New Jersey hired a specialized social worker to help clients reverse their sanction. She conducts a weekly sanction compliance meeting and assists clients with meeting the work requirements so that their sanction can be lifted.
How Have TANF Sanctions Been Implemented in Local Welfare Offices?
To analyze how TANF sanctions have been implemented, we examine how six key tasks are carried out: (1) informing clients about work requirements and sanctions, (2) defining program expectations and requirements, (3) monitoring participation in work activities, (4) deciding whether to impose a sanction, (5) imposing a sanction, and (6) reengaging sanctioned recipients in program activities. In our examination of these tasks, we consider two fundamental questions:
- What is the relative importance of policies, administrative procedures, and worker discretion in determining how TANF sanctions are implemented?
- What influence do individual client circumstances have on the implementation of TANF sanctions?
Our key findings are presented below.
Informing Clients About Work Requirements and Sanctions
- Clients in the study sites receive information about work requirements and sanctions often and in many forms. However, case managers believe that both personal and organizational issues undermine some clients' ability to grasp fully the consequences associated with nonparticipation.
- Many case managers believe that sanctions can influence some clients' program participation decisions. Therefore, they regularly use the prospect of a sanction to encourage recipients to participate in work activities.
Defining Program Expectations and Requirements
- Although the study sites have instituted formal procedures for identifying recipients who should be exempt from work requirements and for assessing the needs of nonexempt recipients, potential barriers to employment often are not uncovered until participation problems arise.
- Staff believe that more flexibility in how work requirements are implemented would provide them with greater opportunities to engage all mandatory participants in work activities.
Monitoring Participation in Work Activities
- Although several workers and, in most cases, several agencies in the study sites played roles in providing services and monitoring participation, case managers consistently reported receiving the information they needed to identify participation problems and make sanctioning decisions.
Deciding Whether to Impose a Sanction
- Case managers often exercise considerable discretion in deciding whether and when to initiate a sanction; office culture, workload, individual work styles, and client circumstances all influence their decisions.
- Except when workload issues prevent them from doing so, case managers in most offices try to reengage clients in program activities before initiating a sanction.
Imposing a Sanction
- The ease with which a sanction could be imposed in the study sites is influenced by the design of the state's sanction policy, the state and local philosophy regarding sanctions, and the degree to which the sanction process was automated.
- In all the study sites, processes are in place to promote proper use of sanctions.
Reengaging Sanctioned Recipients in Program Activities
- In developing procedures for reengaging recipients, states and local welfare offices face the difficult challenge of developing cure requirements that are achievable for most recipients without creating a revolving door that makes it easy for families to cycle in and out of participation.
How Often Are TANF Sanctions Imposed?
In our analysis, we examine how often sanctions are imposed on a cohort of TANF recipients over a specified period of time. This analysis allows us to answer the following question: What fraction of current TANF recipients is now sanctioned (and still on the TANF caseload) or will eventually be sanctioned? Because some recipients might have been sanctioned before our period of observation, our estimates provide a lower bound of the likelihood that a recipient has ever been or will be sanctioned. We find the following:
- Over a 10-month period, 5 percent of recipients are fully sanctioned in South Carolina compared to 10 and 12 percent in Illinois and New Jersey, respectively. South Carolina's low rate of sanctioning is most likely attributable to an explicit administrative decision to encourage the use of sanctions only as a last resort.
- When partial and full sanctions and a longer time period (18 months) are taken into account, the fraction of recipients who are sanctioned in Illinois and New Jersey increases to 31 and 39 percent, respectively. In both states, sanctions are imposed fairly quickly: 60 percent are imposed within the first six months.
How Do the Background and Demographic Characteristics of Sanctioned and Nonsanctioned Recipients Compare?
Using administrative data in all three states, we are able to examine how the demographic characteristics of sanctioned and nonsanctioned recipients compare. We find that many of the characteristics associated with higher rates of sanctioning are the same characteristics that earlier studies have shown to be associated with longer stays on welfare and lower rates of employment. These findings are consistent with those of other studies that compare the characteristics of sanctioned and nonsanctioned recipients.
- All else equal, those who are younger, less educated, have never been married, or are African American are significantly more likely to be both partially and fully sanctioned in Illinois and New Jersey than families without these characteristics. Those with moderate stays on welfare (i.e., 6 to 11 months) are significantly more likely to be sanctioned than those with short stays (i.e., less than 6 months).
- In South Carolina, all else equal, those who are younger and less educated are more likely to be fully sanctioned than families without these characteristics.
How Do Personal Liabilities Influence the Likelihood of a Sanction?
We matched survey data on detailed personal characteristics (or what we term personal liabilities and assets) with administrative data on sanctions in Illinois and South Carolina to examine factors beyond basic background and demographic characteristics that may help identify those recipients at greater risk of sanction. We find that a number of personal liabilities are associated with higher rates of sanctioning.
- In Illinois, recipients with no high school diploma, with limited work experience, with a physical or mental health problem, with two or more arrests or with a self-identified child care problem are much more likely to be sanctioned (either partially or fully) than recipients who do not face these personal liabilities. The likelihood of being sanctioned if only one of these liability is present and a recipient has "average" characteristics is between 18 and 21 percent, compared to a 12 percent likelihood if no liabilities are present.
- In South Carolina, we observe higher sanction rates for families with a physical health problem, those with signs of a learning disability, those caring for a household member with a health problem or special need, and those who are pregnant or caring for a child under the age of one.
How Do Sanctioned Recipients Fare?
To analyze how sanctioned recipients fare over time, we first examine the duration of sanctions and then the employment and TANF experiences of fully sanctioned recipients. For the first component of this analysis, we use data from all three states to examine the length and disposition of partial sanctions and the rate of return for fully sanctioned cases. For the second component, we exploit the availability of the rich survey data collected for the Work First New Jersey evaluation to examine the employment and welfare experiences of TANF recipients receiving full-family sanctions for the year after the sanction is imposed.
- As was intended, partial sanctions are typically short, with 80 percent of partial sanctions in New Jersey and 90 percent in Illinois ending within three months.
- The majority of partial sanctions do not proceed to a full sanction. Only 22 percent of partial sanctions in Illinois and 38 percent in New Jersey proceed to a full sanction. Other partial sanctions end because of compliance (55 percent in Illinois and 36 percent in New Jersey) or because the recipient leaves TANF for another reason (23 percent in Illinois and 26 percent in New Jersey).
- Most fully sanctioned families in Illinois and New Jersey (54 and 60 percent, respectively) and a substantial fraction in South Carolina (32 percent) return to TANF within nine months (see Table ES-2).
- In all three states, fully sanctioned recipients are more likely to return to TANF than nonsanctioned leavers, with the difference being most pronounced in Illinois and New Jersey (see Table ES-2).
- During the first year after they are fully sanctioned, families in New Jersey spend an average of four months off TANF and not employed, three months employed and off TANF and one month on TANF and employed and four months on TANF and not employed.
- When considered as a part of the total caseload, the fraction of recipients in New Jersey who show no connection to the labor market or TANF in the first year after they are sanctioned is quite small (see Figure ES-1).
- Data from Illinois and New Jersey suggest that the imposition of a gradual full-family sanction promotes compliance with work requirements. Sixty percent of recipients in New Jersey and 67 percent in Illinois who receive an initial partial sanction eventually come into compliance with work requirements.
|Sanctioned Leavers||Other Leavers||All Leavers|
|Returned to TANF Within|
|Returned to TANF Within|
|Returned to TANF Within|
|Source: Analysis of state administrative data by Mathematica Policy Research, Inc.
Note: Illinois sample was truncated in order to observe a full 12 months after TANF exit. New Jersey sample includes cases who exited TANF within 12 months of baseline. "Baseline" pertains to the time the sample member first received cash assistance during or after July 2000. South Carolina sample was truncated in order to observe a full 9 months after TANF exit.
The present study did not set out to examine the extent to which sanctions promote compliance with work requirements. However, the results suggest that program participation is probably higher than it would be without the use of sanctions. Case managers often use the prospect of a sanction to promote compliance, and many sanctioned families eventually do come into compliance. A question of interest not addressed by the present study is whether a more stringent sanction promotes greater participation in work activities. None of the study states imposed only a partial sanction; therefore, we do not know how the use of sanctions and recipients' responses to them might differ in an environment where the potential for adverse consequences is not as great. In South Carolina, the stringency of the sanction almost certainly contributed to concerns about the number of families that were sanctioned. However, we don't know whether the stringency of the sanctions might also have contributed to greater compliance. We do know that the state set the bar higher than other states for imposing a sanction, but other factors may also be in play. With sanction policies similar in New Jersey and Illinois, our findings there do not allow us to draw any conclusions about how the design and structure of sanctions influence the rate of participation in work activities.A study that looks at the relationship between state sanction policies and work participation and employment rates may offer some insight into whether a particular approach to sanctions, controlling for state characteristics and other welfare reform policies, contributes to higher work participation rates. Such a study could build on earlier studies that look at the relationship between various state TANF policies and caseload declines. A key methodological challenge of such a study would be developing a strategy to account for employment among recipients who leave the TANF rolls and for participation in employment activities for those who remain.
Finally, a study that looks at the relationship between sanctions and time limits could provide greater insight into how these policies work together or separately to encourage families to become self-sufficient. In states where sanctions are imposed routinely for non-compliance, fewer families than expected may reach time limits. This could occur if sanctions encourage recipients who might have been long-term recipients to engage in activities that help them to move towards self-sufficiency more rapidly or if they remove recipients from the TANF rolls who do not comply with program requirements and who may have stayed for an extended period in the absence of sanctions. In contrast, in states like South Carolina where sanctions are only applied as a last resort, more families may reach time limits and lose their TANF benefits as a result of them.