Indicators of Welfare Dependence: Annual Report to Congress, 2000. Data Sources

03/01/2000

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 national survey. Its strengths 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.

The SIPP does not, however, follow families for more than three years. Therefore, the Panel Study of Income Dynamics (PSID) also is used in this report. The PSID collects annual income data, including transfer income, over a long time-period, providing vital data for indicators of long-term welfare receipt, dependence, and deprivation.

Some indicators in this report are based upon the annual March Current Population Survey (CPS), which is available on a more timely basis than the SIPP. The March CPS measures income and poverty over a single annual accounting period, and provides important information regarding child poverty. Finally, the report also draws upon administrative data for the AFDC/TANF, Food Stamp, and SSI programs.

One of the difficulties in preparing this year's annual report has been the challenge of obtaining recent data from the SIPP and the PSID, the two data sources used for most of the report. The most recent SIPP data available at the time of preparation of this year's annual report were 1995 data, collected from the third year of the 1993 SIPP three-year panel. Data from 1995, however, do not reflect many of the dramatic changes in welfare programs that have occurred since enactment of the welfare reform legislation in August 1996. Two more years of SIPP data are expected to be available next year, allowing an update of many indicators through early implementation of the TANF program.

PSID data for the mid- to late-1990s also were not available at the time of updating this report. Instead, the indicators that are based on PSID data cover the same ten-year period (1982-1991) as in last year's volume. Updated PSID analyses will be published in next year's report.

The most recent data are from the CPS and administrative sources. The CPS data are available for calendar year 1998 (and in some cases, March 1999), while administrative data are generally available through fiscal year 1998 (or, for some aggregate caseload statistics, fiscal year 1999). To the extent possible, TANF administrative data are reported in a consistent manner with data from the earlier AFDC program, as noted in the footnotes to the tables in Appendix A. The fact remains that assistance under locally designed TANF programs encompasses a diverse set of cash and non-cash services designed to support families in making a transition to work, and so direct comparisons between AFDC receipt and TANF receipt must be made with caution. This issue also will affect reported data on TANF receipt in national data sets such as the SIPP, once these are available.

Most of the data sources allow analysis of the indicators and predictors of welfare dependence across several age and race/ethnic categories. Where the data are available, statistics are shown for three racial/ethnic groups — non-Hispanic whites, non-Hispanic blacks, and Hispanics. In some instances, however, there are not sufficient data on individuals of Hispanic origin, and so the measures are shown for only two racial/ethnic categories.

A final technical note concerns the unit of analysis and the measurement of benefit receipt. The individual, rather than the family or household, is the unit of analysis for most of the statistics in this report. An individual is considered a recipient of AFDC/TANF or food stamps if he or she lives in a family receiving such benefits. In contrast, the SSI program provides benefits to individuals and couples, and so an individual is only considered an SSI recipient if he or she directly receives such an SSI benefit. All means-tested benefits — AFDC/TANF, food stamps, and SSI — are summed together with earnings and other sources of income for all individuals in a family unit to determine total family income, which is used to determine the poverty status, dependency status, and income levels for all individuals in the family.

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