A Cross-State Examination of Families Leaving Welfare: Findings from the ASPE-Funded Leavers Studies. Employment Rates

08/01/2000

About 45 to 65 percent of former TANF recipients were working after leaving TANF, according to administrative data from ten reports (see Table 2A). Most studies reported employment rates between 50 and 60 percent one quarter after exit, although employment rates were below 50 percent in one site (Los Angeles, based on preliminary data), and above 60 percent in two sites (Wisconsin and Georgia). There was a slight dip in employment rates in the second quarter after exit in most sites. In half the sites, this trend was reversed, and employment rates returned to initial levels by the fourth quarter after exit. Over the twelve-month period, some former recipients lost their jobs, while others found new employment, resulting in cumulative employment rates of 62 to 75 percent, measured as those who ever had earnings in the quarterly earnings databases within the first four quarters after exit. Only about 35 to 40 percent of leavers were employed in all four quarters, according to the four studies reporting this statistic.

A review of four states providing employment rates for two or more cohorts of leavers shows no clear trends over time (see Table 2B). When compared to the early cohort of leavers, the later cohort of leavers had higher employment rates in Washington, lower employment rates in Arizona, and similar employment rates in Illinois and Wisconsin.

Employment rates based on administrative data were defined in a similar manner across the ASPE-funded studies, as the percentage of leavers with positive earnings in the quarterly earnings records maintained by the state's unemployment insurance (UI) program. Although most jobs are covered by the state UI systems, some jobs are omitted, such as self-employment, employment in the military or federal government, certain agricultural employment, informal employment, and jobs over state boundaries. These employment rates, therefore, are likely to be under-estimates of employment rates as compared to employment information gathered through surveys of former recipients.

In fact, former recipients reported employment rates of between 1 and 10 percentage points higher than the rates based on administrative data, according to survey data from four reports (see Table 2C).(4) Across the four studies, self-reported employment rates varied from 58 to 65 percent. This represents employment at the time of interview, a single point in time. Respondents also were asked to report whether they were employed at any point since exit, and the vast majority - 85 to 90 percent - told interviewers that they had worked at least once between exit and time of interview (a time period ranging from 6 months to over 2 years, depending on the state's study design).

Self-reported cumulative employment rates were higher than employment rates observed over four quarters of administrative data. In Illinois, for example, 85 percent of the survey sample reported at least some employment in the 6 to 8 months since exit, even though only 70 percent of the universe of leavers had any earnings reported over four quarters worth of administrative data. While most of this difference may be due to employment that is not captured in the earnings records of the unemployment insurance system, it also is possible that some respondents overstated their rate of employment since exit, not wanting to admit that they had not held any job over that period. It also is possible that the Illinois survey respondents, who represented only 51 percent of those in the original survey sample, did have slightly higher employment rates than the universe of leavers. A comparison of respondents and non-respondents indicated that respondents differed in some respects, including having slightly higher education levels, more income reported to the agency at the time of exiting welfare, and a higher likelihood that their case was closed because of earned income.

Although only one of the four survey reports, Illinois, reported on continuous employment, the survey findings - 37 percent continuously employed throughout the six-to-eight months since exit - seem consistent with the administrative data findings from three other states of 35 to 40 percent employed in all four quarters after exit. In Missouri, survey respondents reported working a mean of 20 months and a median of 25 months over the 26-34 months since exit, again indicating that many former recipients experienced spells of unemployment as well as periods of employment.

Three of the four surveys asked about employment of other household members, important information that is not usually available from administrative data. Illinois and Missouri reported that between 72 and 80 percent of leaver households had at least one employed adult. In these two states, 60 to 65 percent of adult leavers were employed, 10 to 15 percent were unemployed but living in households where others were employed, and 20 to 30 percent lived in households with no earned income.(5)

Evidence from the leavers studies suggests that about three-fifths of individuals leaving welfare were employed at any point in time (with slightly higher rates according to the survey data, and slightly lower rates when examining administrative data only). Employment rates rose to over 80 percent when measured over extended periods of time or across the entire household. However, former recipients experienced a fair amount of job turnover and spells of unemployment, which calls into question their ability to support themselves and their families on earned income alone. This concern is reinforced by information about the level of their earnings.

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