Final Synthesis Report of Findings from ASPE "Leavers" Grants. How Much Are Leavers Paid?

11/27/2001

Beyond employment, it is also important to examine the quality of the jobs held by TANF leavers. The most basic measure of job quality is how much the job pays. The fifteen studies report mean/median quarterly earnings of employed TANF leavers based on UI wage records or NDNH data studies. These records include earnings information on all reported jobs a leaver has held during the quarter. Note that earnings estimates reported from these administrative sources represent total earnings over a three month period. The data do not provide information on the number of weeks or hours leavers actually worked to achieve their earnings.

Table III.5 and Figure III.4 show that the mean/median earnings of employed leavers during the first post-TANF exit quarter range from about $1,900 to about $3,400.16

Figure III.4:
Mean Earnings of Single-Parent Welfare Leavers

Figure III.4: Mean Earnings of Single-Parent Welfare Leavers

Notes: The graph shows the minimum, maximum, and median earnings as reported across the studies. The shaded box represents the range in which the middle 50% of reported earnings fall. Not all studies provide data for all post-exit quarters. See table III.5 for more information.

Table III.5:
Mean Quarterly Earnings of Employed Single-Parent Leavers: Administrative Data Findings

State/Study

Exit Cohort Post- Exit Quarter ($) Growth Q1-Q4
Q1 Q2 Q3 Q4

Arizona

1Q98 2,211 2,354 2,695 2511 1 300

District of Columbia2,3

4Q97 3,416 n.a 3,395 3,934 518

Florida

2Q97 2,163 2,352 2,343 2,496 333

Georgia

1Q98 2,185 2,294 2,562 2,327 142

Illinois

3Q97 - 4Q98 2,663 2,746 2,846 2,959 296

Iowa

2Q99 2,481 2,661 2,550 2,712 231

Massachusetts2

Dec 1998 - Mar 1999 2,834 3,005 3,201 n.a n.a

Missouri2

4Q96 2,192 2,360 2,384 2,698 506

New York

1Q97 3,393 3,402 3,877 3,602 209

South Carolina2

Oct 1998 - Mar 1999 1,941 2,081 2,163 2,332 391

Washington

4Q97 2,678 2,906 2,975 3,275 597

Wisconsin2

4Q97 2,272 2,362 2,278 2,561 289

Cuyahoga Co.

3Q98 2,744 2,489 2,663 2,754 10

Los Angeles Co.

3Q96 3,414 3,387 3,521 3,576 162

Bay Area

4Q98 3,144 3,439 3,612 n.a n.a

1Data from report differ from revised data in public use data file. Revised fourth quarter earnings are $2,525. Arizona added 17 new cases to the data file one year after the report was published.
2Report earnings data for all cases, not just for single-parent cases.
3Data reported for District of Columbia are median earnings, not mean earnings.
Source: See Appendix B for a complete listing of the leavers studies referenced.

In the first post-TANF quarter, half the studies find mean/median earnings ranging from about $2,200 to $2,800 for leavers with any earnings. During the fourth post-TANF exit quarter, earnings range from about $2,300 to about $3,900. This represents a substantial increase in average earnings over time. For example, in the District of Columbia, Missouri, and Washington, the average earnings of employed leavers increased by over $500 between the first and fourth post-exit quarters.

Table III.6 and Figure III.5 show earnings for leavers earning over $500 a quarter and compares them with leavers with any earnings.

Figure III.5:
Mean Earnings of Single-Parent Welfare Leavers in the Fourth Quarter After Exit Using Alternative Definitions of Work

Figure III.5: Mean Earnings of Single-Parent Welfare Leavers in the Fourth Quarter After Exit Using Alternative Definitions of Work

Notes: See table III.6 for more information

Table III.6:
Mean Quarterly Earnings of Employed Single-Parent Welfare Leavers Using a $500 per Quarter Earnings Threshold: Administrative Data Findings

State/Study

Exit Cohort Quarter Relative to Exit ($) Growth Q1-Q4
Q-1 Q1 Q2 Q3 Q4

Arizona

1Q98  

Any Earnings

  1,349 2,211 2,354 2,695 2,525 300

$500 in Earnings

  1,772 2,609 2,754 3,050 2,899 290

District of Columbia1

4Q97  

Any Earnings

  3,347 3,416 n.a 3,395 3,934 518

$500 in Earnings

  3,622 3,757 n.a. 3,563 4,217 460

Iowa

2Q99  

Any Earnings

  1,402 2,481 2,661 2,550 2,712 231

$500 in Earnings

  1,859 2,844 3,046 2,995 3,184 340

1Report earnings data for all cases, not just for single-parent cases. Earnings data are median earnings, not mean earnings.
Note: All data calculated from public use data files.
Source: See Appendix B for a complete listing of the leavers studies referenced.

In Iowa and Arizona, the average earnings for leavers who earn at least $500 a quarter is about $400 higher than the average earnings for all leavers. In both states the average fourth post-exit quarter earnings for those earning at least $500 is about $3,000.

Table III.7 and Figure III.6 compare all leavers with earnings with continuous leavers with earnings.

Figure III.6:
Mean Earnings of Single-Parent Welfare Leavers in the Fourth Quarter After Exit--Continuous Leavers v. All Leavers

Figure III.6: Mean Earnings of Single-Parent Welfare Leavers in the Fourth Quarter After Exit--Continuous Leavers v. All Leavers

Notes: See table III.6 for more information.

Table III.7:
Mean Quarterly Earnings of Employed Single-Parent Welfare Leavers-- Continuous Leavers vs. All Leavers: Administrative Data Findings

State/Study

Exit Cohort Quarter Relative to Exit ($) Growth Q1-Q4
Q1 Q2 Q3 Q4

Arizona1

1Q98  

All Leavers

  2,211 2,354 2,695 2,525 314

Continuous Leavers

  2,470 2,645 3,039 2,771 301

District of Columbia1,2

4Q97  

All Leavers

  3,416 n.a 3,395 3,934 518

Continuous Leavers

  3,685 n.a. 3,569 4,275 590

Iowa1

2Q99  

All Leavers

  2,481 2,661 2,550 2,712 231

Continuous Leavers

  2,634 2,947 2,925 3,056 422

Washington

Oct. 1998  

All Leavers

  2,678 2,906 2,975 3,275 597

Continuous Leavers

  2,945 3,273 3,422 3,750 805

1Data calculated from public use data files.
2Report earnings data for all cases, not just for single-parent cases. Earnings data are median earnings, not mean earnings.
Source: See Appendix B for a complete listing of the leavers studies referenced.

In all four studies which examine continuous leavers, leavers who remained off welfare for an entire year tend to have higher earnings than the average leaver and the gap grows slightly over time. For example, in Iowa, continuous leavers earn $153 more than leavers in general, on average, in the first post-exit quarter ($2,634 versus $2,481). By the fourth post-exit quarter, the gap between continuous and all leavers reaches $344 ($3,056 versus $2,712). Only in Arizona does the gap between all and continuous leavers remain stable over time (about $300). These figures suggest that, in general, those leavers who remain off of welfare earn more after exit and experience more rapid earnings growth than the average leaver. It is not clear if higher earnings enable continuous leavers to stay off welfare or whether it is continuous leavers' skill and perseverance that allow them to be more successful in the labor market.

Ten of the studies also use surveys of leavers to examine employment, wage rates, and job characteristics of leavers. While surveys rely on self-reported information, they garner more detailed information than is available through administrative data systems.

Surveys of welfare leavers obtain information on the hours worked and wages of leavers (see Table III.8). All eight of the studies that examine hours worked in their surveys show that employed leavers work close to full-time on average, with mean weekly hours ranging from 33 to 39 and median hours (when reported) reaching 40. Mean hourly wages range from $7.50 to $8.74, and median hourly wages range from $6.50 to $8.13. If a leaver works 40 hours a week and earns $7.50 an hour, she would earn $3,900 in a quarter provided that she worked all thirteen weeks in the quarter. However, as illustrated above, quarterly earnings are usually less than $3,900, indicating that a substantial share of leavers experience periods of joblessness and may even return to welfare.

Table III.8:
Hours and Wages of Single-Parent Welfare Leavers: Survey Findings

State/Study

Exit Cohort Timing of Survey Post Exit Hours Worked Wage Rate
Mean Median Mean Median

Arizona

1Q98 12 - 18 months 35 n.a 7.52 1 n.a

District of Columbia2

4Q98 ~ 12 months 36 40 $8.74 $8.13

Illinois

3Q97 - 4Q98 6 - 8 months n.a 37 $7.89 $7.41

Iowa

2Q99 8 - 12 months 35 n.a $7.54 n.a

Massachusetts2

Dec 1998 - Mar 1999 ~ 10 months 33 n.a $8.46 n.a

Missouri

4Q98 26 - 34 months 39 40 n.a n.a

South Carolina2

Oct 1998 - Mar 1999 12 months 36 n.a n.a $6.50 3

Washington

Oct. 1998 6 - 8 months 36 40 $7.70 7.00

Cuyahoga Co.

3Q98 14 - 21 months 35 n.a $7.50 n.a

Bay Area

4Q98 6 - 12 months n.a n.a n.a $9.00

1Data published in the report differ slightly because the weights used in the report were not accurate.
2Report data for all cases, not just for single-parent cases.
3For those who have not returned to welfare.
Source: See Appendix B for a complete listing of the leavers studies referenced.

Table III.9 compares the hours and wage rates of continuous leavers with those of all leavers for the five studies that allow us to make this comparison. Continuous leavers are slightly more likely to be employed at the time of the survey than leavers in general with the difference ranging from 2 to 9 percentage points. With regard to whether leavers were ever employed since leaving TANF, there is little difference between continuous and other leavers; this is consistent with findings from administrative data. In addition, among currently employed leavers, there is little difference in hours worked between continuous and leavers in general, but this could reflect the fact the most working leavers work close to full-time. One might expect that continuous leavers would have higher hourly wage rates either because they have stronger attachments to the labor force, allowing for wage advancement, or because higher wages enable them to continue working. Whatever the reason, mean hourly wages are, in fact, 7 to 23 cents higher for continuous leavers; median hourly wages are up to 25 cents higher. For a full-time worker, a 25 cent an hour difference in pay translates into about $43 a month.

Table III.9:
Hours and Wages of Employed Single-Parent Welfare Leavers and Overall Employment Rates: Survey Findings

State/ Study

Hours Worked Wage Rate ($) Percent Employed (%)
Mean Median Mean 25th Median 75th Time of Survey Since Exit

Arizona1

All Leavers

35 40 7.52 6.00 7.00 8.50 58 75

Continuous leavers

35 40 7.68 6.00 7.25 8.79 63 74

District of Columbia1,2

All Leavers

36 40 8.74 7.00 8.13 10.00 60 80

Continuous leavers

37 40 8.94 7.00 8.38 10.24 69 81

Iowa1

All Leavers

34 38 7.19 6.00 7.00 8.00 61 71

Continuous leavers

35 40 7.42 6.00 7.00 8.00 69 68

Massachusetts1

All Leavers

34 35 8.46 6.50 8.29 10.00 72 90

Continuous leavers

34 35 8.53 6.57 8.46 10.00 75 93

South Carolina2

All Leavers

36 n.a. n.a. n.a. n.a. n.a. 59 n.a.

Continuous leavers

36 n.a. n.a. n.a. n.a. n.a. 61 n.a.

1 Calculated from public use data files.
2 Report data for all cases, not just for single-parent cases.
Source: See Appendix B for a complete listing of the leavers studies referenced.

In addition to monetary pay, employed leavers may receive non-cash employee benefits through their jobs. Eight of the surveys ask explicitly about job-related benefits, and unlike employment and cash earnings, there is considerable variation across the studies. Table III.10 shows that the share offered such coverage ranges from 41 percent in the Bay area to 58 percent in Cuyahoga County, and the share of leavers with employer sponsored health insurance coverage ranges from 12 percent in Arizona to 36 percent in Washington state. The share of leavers with paid sick days ranges from a low of 28 percent in Washington state to a high of 50 percent in the District of Columbia and Cuyahoga County with Massachusetts close behind at 47 percent; in the other two locales reporting this information, about two out of five leavers have paid sick leave. In three studies, the share with paid vacations reaches 60 percent or more (DC, IA, and CCo.). Finally, 46 percent of working leavers have retirement benefits in DC compared with 21 percent in Washington state.

Table III.10:
Employer Sponsored Benefits of Employed Single-Parent Welfare Leavers: Survey Findings

State/Study

Exit Cohort Timing of Survey Post Exit Health Insurance Percent of Leavers (%)
Offer Coverage Paid Sick Leave Paid Vacation Pension

Arizona

1Q98 12 - 18 months n.a. 12 n.a. n.a. n.a.

District of Columbia1

4Q98 ~ 12 months n.a. 32 50 62 46

Iowa

2Q99 8 - 12 months 61 33 40 60 n.a

Massachusetts1

Dec 1998 - Mar 1999 ~ 10 months 52 n.a. 47 55 n.a

Missouri1

4Q98 26 - 34 months 53 n.a. 40 52 n.a

Washington

Oct. 1998 6 - 8 months n.a. 36 28 31 21

Cuyahoga Co.

3Q98 14 - 21 months 58 27 50 63 n.a

Bay Area

4Q98 6-12 months 41 n.a. n.a. n.a. n.a.

1Report data for all cases, not just for single-parent cases.
Source: See Appendix B for a complete listing of the leavers studies referenced.