Dynamics of Children's Movement Among the AFDC, Medicaid, and Foster Care Programs Prior to Welfare Reform: 1995–1996. Introduction


Policymakers are typically concerned with the effects of changes in one social program on the use of other programs.  Unintended consequences of policy change are the fear of many social programmers, but there is seldom sufficient information to make educated guesses on how the needs of program participants will change when the program changes.  This is the case for welfare reform and its effects on social service and safety net programs.  In this report, we attempt to construct a baseline against which to measure changes in the income maintenance (from Aid to Families with Dependent Children (AFDC) to Temporary Assistance for Needy Families (TANF)), Medicaid, and foster care program populations and understand the pre-welfare reform movement of children among these programs.

We focus on two types of transitions.  The first is designed to better understand the experiences children who may be harmed.  For this, we study the transition from a child being part of an AFDC grant to living in foster care.  The second is intended to provide more information on how the social safety net is used.  For this, we look at how children transition from AFDC and onto Medicaid or leave both AFDC and Medicaid.  We address the following questions across the three states:

  • At what rate do children who have entered AFDC enter foster care and to what extent does this rate affect the total foster care entry rates? And, subsequently, what is the transition rate back to AFDC for children who enter foster care?
    • Are children more likely to enter foster care during or after AFDC receipt? How quickly do foster children enter AFDC after their exit from foster care?
    • What factors most significantly affect these transitions?
    • If the number of entrants to TANF changes or if the rate of entry to foster care from TANF changes, how many more children will enter foster care?
  • How many children continue to receive Medicaid after exiting from TANF? How many children do not participate in either Medicaid or foster care after AFDC exit?
    • Of those children who do exit, what percentage transition to only receiving Medicaid?
    • What factors affect this transition?
    • How might welfare reform affect this transition?

The focus of this study is largely as a baseline against which to study the effects of welfare reform.  However, we would also like to emphasize the independent interest of many of our results below as they cast important light on an understudied issue, namely, how families use a variety of welfare programs throughout their lifetimes.  There is by now considerable evidence on how individuals transition on and off AFDC, yet little work has been done on addressing whether these individuals continue to use other welfare programs while off AFDC.  By addressing the welfare careers of children we can address a series of questions which have largely been ignored in the literature so far.  For instance, how important is Medicaid to those who leave AFDC? Do children who leave foster care typically return to AFDC receipt? These questions and others addressed below are of critical interest, not simply in terms of the effects of welfare reform, but more generally providing a more holistic view of the role of welfare programs for the poor.

We examine the experiences of children in AFDC, Medicaid, and foster care in three states: California, Illinois, and North Carolina.  These states both represent different geographic regions and a range of policy regimes in welfare and child welfare programs.  We have developed comparable data in these states using the administrative data for the three programs.