Final Synthesis Report of Findings from ASPE "Leavers" Grants. Economic Context

11/27/2001

One would expect that when jobs are plentiful and wages are high, welfare leavers will generally fare better than during lean economic times. Table II.3 shows the 1997 unemployment rates and median incomes in the states in which the leaver studies we review were conducted. Note that these are state averages and some of the leaver studies only cover sub-state geographic areas. For example, the economic conditions in the state of Ohio may not necessarily reflect the conditions in one of its urban centers, Cuyahoga County.

Table II.3:
Economic Charicteristics of Status, 1997
State Unemployment Rate (%) Median Income ($)
Arizona 5.1 35,503
District of Columbia 8.9 32,382
Florida 4.3 32,455
Georgia 4.9 35,911
Illinois 5.2 40,094
Iowa 3.5 37,407
Massachusetts 5.4 40,624
Missouri 4.8 36,676
New York 6.3 34,783
South Carolina 5.1 30,616
Washington 6.4 37,458
Wisconsin 3.7 43,132
Cuyahoga Co.1 4.8 36,798
Los Angeles Co.1 7.8 38,976
San Mateo Co.1 7.8 38,976
United States 5.6 36,244
1 Unemployment rate is given for the entire state.
Source: "Interpreting TANF Leaver Studies: Comparing ASPE Grantee States to the Nation as a Whole." Mathematica Policy Research, March 27, 2000.

Overall, Wisconsin had both the lowest unemployment rate (3.7 percent) and the highest median income ($43,132) in 1997. In contrast, the District of Columbia had both a relatively high unemployment rate (8.9 percent) and low median income ($32,382). Thus, if the welfare rolls are tied to macroeconomic conditions, one might expect that DCs leavers may struggle more than Wisconsins leavers or be less likely to leave in the first place. For some states, the potential beneficial impacts of low unemployment are offset by low incomes while others have both high incomes and high unemployment. For example, Florida had a low unemployment rate at 4.3 percent, but its median income is also among the lowest at $32,455. And Washington experienced relatively high unemployment (6.4 percent) but its median income was above average ($37,458). Of course, the cost of living also differs from state to state. Thus, it is clear that economic conditions vary considerably across the sites conducting the leaver studies reviewed in this synthesis.