Indicators of Welfare Dependence: Annual Report to Congress, 1998. Measuring Welfare Dependence

10/01/1998

Welfare dependence, like poverty, is a continuum, with variations in degree and in duration. Families may be more or less dependent if larger or smaller shares of their total resources are derived from welfare programs. The amount of time over which a family depends on welfare might also be considered in assessing their degree of dependency. Nevertheless, a summary measure of dependence to be used as an indicator for policy purposes must have some fixed parameters that allow one to determine which families should be counted as dependent, just as the poverty line defines who is poor under the official standard. The definition of dependence developed by the Advisory Board for this purpose is as follows:

A family is dependent on welfare if more than 50 percent of its total income in a one-year period comes from AFDC/TANF, Food Stamps and/or SSI, and this welfare income is not associated with work activities. Welfare dependence is the proportion of all families who are dependent on welfare.

This measure is not without its limitations. The Advisory Board recognized that no single measure could fully capture all aspects of dependence and that the proposed measure should be examined in concert with other key indicators of dependence and deprivation. In addition, while the proposed definition would count unsubsidized and subsidized employment and work required to obtain benefits as work activities, currently available data do not permit distinguishing between welfare income associated with work activities and non-work-related welfare benefits. As a result, the data shown in this report overstate the incidence of dependence (as defined above) because welfare income associated with work required to obtain benefits is classified as welfare and not as income from work. This proposed definition capture also represents an essentially arbitrary choice of a percentage (50 percent) of income from welfare beyond which families will be considered dependent. However, it is relatively easy to measure and to track over time, and is likely to be associated with any very large changes in total dependence, however defined. For example, as the recent changes in welfare law move more recipients into employment or workrelated activities, dependence under this definition is expected to decline.

In 1994, the most recent year for which complete population data are available on monthly income and benefit recipiency, 18.0 percent of the population received means-tested assistance, and close to one-third of this group, or 5.6 percent of the total population, would be considered dependent under the above definition, as shown in Table SUM1. Recipiency and dependency rates are higher in both 1993 and 1994 than they were in 1987 and 1990. Recipiency rates, for example, rose from rates of about 14 to 15 percent in 1987 and 1990, to rates of 17 to 18 percent in 1993 and 1994. This rise in consistent with administrative data showing higher than average AFDC and Food Stamp caseloads in 1993 and 1994. What is not apparent from administrative records, but is shown in these national survey data, is that dependency rates also were higher in 1993 and 1994, in the range of 5 to 6 percent, as opposed to the rates of between 4 and 5 percent, seen in 1987 and 1990.

Table SUM 1. Percentage of the Total Population with More than 50 Percent of Income from Means-Tested Assistance Programs

  1987 1990 1993 1994
  Any Receipt of Assistance More than 50% of Income Any Receipt of Assistance More than 50% of Income Any Receipt of Assistance More than 50% of Income Any Receipt of Assistance More than 50% of Income

Note: Means-tested assistance includes AFDC, SSI and Food Stamps. While only affecting a small number of cases, General Assistance income is included within AFDC income. The 1993 data have been revised based on the 1993 SIPP panel; the 1993 data in earlier reports were drawn from an earlier SIPP panel.

Source: Unpublished data from the SIPP, 1987, 1990, and 1993 panels.

All Persons 14.9 4.7 14.1 4.2 17.0 5.9 18 5.6
Racial Categories                
    Non-Hispanic White 9.3 2.2 8.9 2.1 10.9 2.8 11.1 2.6
    Non-Hispanic Black 40.9 15.7 36.6 14.6 41.8 16.7 43.2 16.8
    Hispanic 28.3 10.9 29.5 8.3 33.9 14.2 37.1 12.9
Age Categories                
    Children Age 0 - 5 24.5 10.0 24.0 10.3 29.0 13.3 32.4 12.5
    Children Age 6 - 10 23.2 10.1 20.2 8.5 24.0 12.3 28.6 12.0
    Children Age 11 - 15 19.8 8.0 18.8 6.4 22.6 10.5 24.9 9.3
    Women Age 16 - 64 14.4 4.6 14.1 4.6 17.3 5.8 17.5 5.5
    Men Age 16 - 64 10.1 2.0 9.5 1.5 12.0 2.7 12.3 2.5
    Adults Age 65 & over 13.6 2.6 12.1 1.9 12.2 2.0 12.3 2.2

In Table SUM 2, the dependence indicator is calculated in more detail for specific combinations of programs. The first column shows dependency when counting income from all three programs as welfare (as was done in Table SUM 1), while the second and third columns show dependency when counting AFDC and Food Stamp benefits only, or counting SSI only. In general, about three-fourths of families who are dependent based on income from all three programs also are dependent under a definition that considers AFDC and Food Stamps alone. As might be expected, the one exception involves adults aged 65 and over. Whereas two percent of elderly recipients are dependent under the definition that includes AFDC, Food Stamps and SSI, less than one-half percent are dependent when SSI is excluded. Table SUM 2 also shows that non-whites and the very young are more likely to be dependent than other racial and age categories, and they are primarily dependent on AFDC and Food Stamps. Even in these populations, however, the vast majority of families do not meet the criteria for dependence.

Table SUM 2. Percentage of the Total Population with More than 50 Percent of Income from Various Means-Tested Assistance Programs, 1994

  AFDC, SSI and Food Stamps AFDC and Food Stamps SSI only
All Persons 5.6 4.1 0.9
Racial Categories      
    Non-Hispanic White 2.6 1.8 0.5
    Non-Hispanic Black 16.8 11.9 2.9
    Hispanic 12.9 10.3 0.9
Age Categories      
    Children Age 0 - 5 12.5 10.6 0.5
    Children Age 6 - 10 12.0 9.3 0.9
    Children Age 11 - 15 9.3 6.6 0.7
    Women Age 16 - 64 5.5 3.8 1.1
    Men Age 16 - 64 2.5 1.2 0.8
    Adults Age 65 and over 2.2 0.3 1.4

A third measure of dependence, shown in Table SUM 3, indicates the proportion of the welfare population that meets the dependence definition over an extended period of time, as well as the proportion receiving any welfare benefits over time. During each of the two time periods presented, about half of all recipients did not receive more than 50 percent of their income from AFDC and Food Stamp benefits in any of the ten years examined. About one-quarter (23 percent in the 1982-1991 time period) were dependent for one to two years, with lower proportions dependent for longer periods of time. Only 4 percent of those who were received welfare in 1982, for example, were dependent for 9 to 10 years. This is a smaller percentage than the proportion of recipients that received welfare of any amount for 9 to 10 years (11 percent). There is a small tendency for the proportion of spells of welfare dependence that are longer to grow over this period, but the change is not large enough to be statistically significant. Child recipients have longer spells of welfare receipt and welfare dependence than do recipients in general, as shown in the bottom half of the table.

Table SUM 3. AFDC Receipt and Percentage of Recipients with More than 50 Percent of Income from AFDC and Food Stamps by Number of Years

  All Recipients 1972 – 1981 All Recipients 1982 – 1991
Years Any AFDCReceipt AFDC & Food Stamps >50% of Income Any AFDC Receipt AFDC & Food Stamps >50% of Income
0 Years -- 55 -- 50
1 - 2 Years 49 22 47 23
3 - 5 Years 28 14 28 15
6 - 8 Years 13 5 15 9
9 - 10 Years 11 4 11 4
  100% 100% 100% 100%
  Children 0 - 5 in 1972: 1972 - 1981 Children 0 - 5 in 1982: 1982 - 1991
Years Any AFDC Receipt AFDC & Food Stamps >50% of Income Any AFDC Receipt AFDC & Food Stamps >50% of Income

Note: Recipients include all individuals receiving at least $1 in AFDC or Food Stamp benefits in the first year of the ten-year time period (1972 or 1982). “AFDC Receipt” is defined as whether the person received AFDC at any time during the year. “AFDC & Food Stamps, >50% of Income” is defined as whether the person’s AFDC and Food Stamps benefit was more than 50% of their yearly income. “0 Years” means that while the person received means-tested assistance, their benefits were 50% of their income for zero years during the time period. For example, a person listed as receiving AFDC for 6 - 8 years (“Any AFDC Receipt”) may never have received benefits greater than 50% of their income (0 years, AFDC and Food Stamps >50% of Income).

Source: Unpublished data from the PSID, 1972 - 1991.

0 Years -- 39 -- 34
1 - 2 Years 37 25 34 28
3 - 5 Years 29 21 29 16
6 - 8 Years 15 6 17 13
9 - 10 Years 19 9 20 8
  100% 100% 100% 100%

Figure SUM 4. Trends in Poverty with and without Means-Tested Benefits: All Persons, 1979-1996

Percent of Total Population in Poverty

 

Figure SUM 4. Trends in Poverty with and without Means-Tested Benefits: All Persons, 1979-1996

Source: Table SUM 4.


 

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"Indicators of Dependence" (pdf, 152.45Kb)

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"Predictors and Risk Factors Associated with Welfare Receipt (First Half)" (pdf, 158.1Kb)

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