Indicators of Welfare Dependence: 2007 Research Brief. Highlights of Report

09/01/2007

Welfare Dependency. In 2004, 3.7 percent of the population would be considered “dependent” on welfare under the above definition. This is about one-quarter of the percentage (15.0 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 dependency rates through 2005, available data suggest the rate may remain the same between 2004 and 2005.(2) 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 10.75 million were dependent in 2004 — representing a decline of 3 million people.

Figure 1.
Recipiency and Dependency Rates: 1993-2004

Recipiency and Dependency Rates: 1993-2004.

Source: Unpublished tabulations from the Current Population Survey, Annual Social and Economic Supplement,
1994-2005, analyzed using the TRIM3 microsimulation model.

Welfare Caseloads. Trends in dependency rates are similar to the more well-known changes in TANF and food stamps caseloads. In the years immediately following 1996, SSI receipt fell slightly, while receipt for TANF and food stamps decreased significantly. The percentage of individuals receiving AFDC/TANF cash assistance fell from 4.5 percent to 1.7 percent between 1996 and 2005, 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 8.6 percent in 2005. 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: 1980-2005

Percentage of Total Population Receiving Food Stamps, TANF or SSI: 1980-2005.

Source: Department of Health and Human Services, Administration for Children and Families,
Office of Family Assistance, and U.S. Census Bureau.

Length of Welfare Receipt. Similar to rates of dependency and recipiency, the length of time individuals are in welfare programs also has declined. Spells of continuous welfare receipt were shorter in the early 2000s than in the early 1990s. For example, only 17 percent of spells for individuals entering TANF between 2001 and 2003 lasted 20 months or longer, compared with 31 percent of AFDC spells beginning between 1992 and 1994, as shown in Figure 3.

Figure 3.
Percentage of AFDC/TANF Spells for Individuals Entering Programs

Percentage of AFDC/TANF Spells for Individuals Entering Programs.

Source: Unpublished tabulations from the Survey of Income and Program Participation,
1993, 1996, and 2001 panels.

Poverty. To assess the social impacts of any change in dependence, changes in the level of poverty should be considered. There was an increase in the overall poverty rate between 2000 and 2004, but the poverty rate remained stable between 2004 and 2005. The poverty rate in 2005 also remains much lower than in 1993, when poverty reached its highest peak since the early 1980s. Overall, 2.2 million fewer people are in poverty and 2.4 million fewer children are in families with incomes below poverty in 2005 than in 1993.

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