Indicators of Welfare Dependence: 2005 Research Brief. Highlights of Report

06/01/2005

In 2002, 3.2 percent of the population would be considered “dependent” on welfare under the above definition. This is about one-quarter of the percentage (13.2 percent) that lived in a family receiving at least some TANF, food stamps, or SSI benefits during the year. Although data are not yet available to show a clear trend in the dependency rate through 2003, available data suggest the rate may increase slightly between 2002 and 2003.(1)

However, even when considering the small increases since 2000, dependency and recipiency rates remained significantly lower than the 1996 rates, as shown in Figure 1. While 13.74 million individuals were dependent in 1996, only 9.03 million were dependent in 2002 — representing a decline of 4.7 million people.

Figure 1.
Recipiency and Dependency Rates:  1996-2002

Figure 1. Recipiency and Dependency Rates: 1996-2002.

Source:  Unpublished tabulations from the Current Population Survey, Annual Social and Economic Supplement, 1997-2003,
analyzed using the TRIM3 microsimulation model.

Trends in dependency are similar to the more well-known changes in TANF and food stamps caseloads. For example, the percentage of individuals receiving AFDC/TANF cash assistance fell from 4.6 percent to 1.9 percent between 1996 and 2003, as shown in Figure 2. Food stamp recipiency rates fell from 9.5 percent in 1996 to 6.1 percent in 2000 and 2001. Since then, the food stamp recipiency rate has increased to 7.3 percent in 2003. This increase in food stamp recipiency may explain the modest increase in overall dependency since 2000.

Figure 2.
Percentage of Total Population Receiving Food Stamps, TANF, or SSI, 1980-2003

Figure 2. Percentage of Total Population Receiving Food Stamps, TANF, or SSI, 1980-2003.

Source:  Department of Health and Human Services, Administration for Children and Families, Office of Family Assistance, and
U.S. Bureau of the Census (available online at http://www.census.gov) model.

To assess the social impacts of any change in dependence, changes in the level of poverty should be considered. Poverty in 2003 (12.5 percent) was lower than in 1996 (13.7 percent). This difference indicates that 668 thousand fewer people were in poverty and 1.6 million fewer children were in families with incomes below the poverty line than in 1996. There was an increase in the overall and child poverty rates between 2000 and 2003, but the poverty rate among adults over age 64 remained essentially unchanged.

Length of Dependency

Another important aspect of welfare dependency is the length of time families stay dependent on welfare. Of the families who received more than 50 percent of their total income from AFDC/TANF, food stamps, and/or SSI in 2002, 71 percent were still dependent in 2003. As shown in Figure 3, recipients of means-tested assistance were more likely to move out of dependency in the early 2000s than in the early 1990s. About three-tenths (29 percent) of recipients who received more than 50 percent of their total income from means-tested assistance programs in 2002 transitioned out of this dependency status in 2003.

Figure 3.
Dependency Status of All Persons Who Received More than 50 Percent of Income from Means-Tested Assistance in Previous Year

Figure 3. Dependency Status of All Persons Who Received More than 50 Percent of Income from Means-Tested Assistance in Previous Year.

Source:  Unpublished tabulations from the Survey of Income and Program Participation, 1993 and 2001 panels.

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