Indicators of Welfare Dependence: Annual Report to Congress, 1997. National Survey Data Issues

10/01/1997

It is of critical importance to understand the policy and program context that may surround changes in welfare dependence over time. As noted throughout this report, between-state, within-state and across-time variations are already happening as a result of the PRWORA provisions and are anticipated to become more diverse. Changes are expected in eligibility requirements (both income-and non-income-related), benefit levels and benefit types, work requirements and sanction policies, time limits, family caps and other areas. Within national surveys, reliable indicators of dependence must capture the realities of individual experiences with welfare receipt. While survey data complement administrative data in several ways, surveys present two main drawbacks: (1) most survey data are not currently representative at the state level, and (2) survey data have a significant time lag between the collection of data and the availability of data for analysis. Nonetheless, national survey data are critical for capturing indicators of adult labor force participation, earnings, program participation, fertility and child well-being, as well as complementing caseload data for tracking changes in dependence.

The PRWORA makes it critical that national surveys accurately measure welfare receipt. Under TANF, as discussed above, welfare receipt can take on many forms of assistance, including child care, wage supplements, and vouchers for services. National surveys are neither currently designed to capture this broader range of cash and non-cash assistance nor to estimate the value of noncash services. In addition, the TANF assistance programs replacing AFDC are taking on a proliferation of names across the states and are increasingly being administered by non-government organizations both of which make the measurement of welfare receipt more difficult. Finally, measuring welfare receipt is further complicated by the potential existence of state-funded assistance programs, as discussed above, that are separate from federally-funded state TANF programs.

For purposes of this report, the Survey of Income and Program Participation (SIPP) has been used the most extensively and is considered the most useful survey. Some of its characteristics which make it most useful are its longitudinal design, system of monthly accounting, and detail concerning employment, income and participation in federal income-support and related programs. These features make the SIPP particularly effective for capturing the complexities of program dynamics and many of the indicators and predictors, or risk factors, associated with welfare receipt. Planning is underway for the seven-year extension of the 1992-1993 SIPP panels, or the Survey of Program Dynamics, provided for by the PRWORA.

The Panel Study of Income Dynamics (PSID) is also used in this report, as are the National Longitudinal Survey of Youth (NLSY) and the Current Population Survey (CPS). The CPS measures income and poverty over a single annual accounting period, and provides important information regarding childhood poverty. Both the PSID and NLSY are longer-run surveys that provide vital data for indicators of intra-and inter-generational dependence and deprivation. The PSID and NLSY collect annual income data, including transfer income, that yields inter-generational indicators. While the PSID and the NLSY are critical for obtaining measures of long-term welfare receipt and inter-generational receipt, both surveys have currently moved to biannual data collection which may reduce their usefulness.

As with administrative caseload data, the SIPP and other national surveys could enhance their value for developing indicators of dependence and deprivation in several ways. As discussed above, national survey data must be able to accurately measure both cash and non-cash assistance as well as assistance under both state-funded programs and federally-funded state TANF programs. National surveys are not currently designed to accurately capture this information. Also, the proposed definition of dependence discussed in this report requires data that would distinguish welfare benefits received in conjunction with work from benefits received without work. As current survey data do not include this information, this report was not able to fully illustrate the recommended definition. Surveys must collect such information if future reports are to utilize the proposed definition of dependence.

The value of national survey data would also be improved by gathering more complete and comprehensive retrospective information regarding previous welfare spells. Realistically, surveys cannot completely account for welfare dynamics --no matter how long the observation window or the accounting period, there will always be welfare spells that occurred before the survey began and continue after the survey ended. This makes it all the more important that surveys take precautions to reduce the risk of providing an incomplete picture of lifetime welfare receipt. Retrospective questions regarding prior welfare receipt will help address this concern.

In addition, the PRWORA makes it even more important that national surveys contain questions to determine the factors involved in the ending of a spell during the observation period. As noted above, it is expected that the PRWORA will result in more diversity in the causes of caseload terminations. Cases may be closed due to increased work effort or as a result of sanctions or time limits. Information regarding the precise event that began or ended a welfare spell can provide critical guidance to policy makers in their efforts to reduce dependence and deprivation. Discussions should continue around ways to ensure that information regarding events that begin or end welfare episodes is not lost if the event occurs outside of the observation period.

Despite the need to collect state-level data in order to fully capture information on the dependence status of recipients of means-tested assistance and the current limitations of national surveys to provide reliable state-level estimates, national survey data are of critical importance in efforts to measure and track changes in dependence. Even when the administrative data collection questions discussed earlier in this chapter are resolved, some state data systems have limited capacity for modification and may be unable to provide the necessary data. Unfortunately, current resources for the SIPP and other national surveys may not be sufficient to fill in the existing gaps in administrative data or to compensate for any lacking state data.