Indicators of Welfare Dependence: Annual Report to Congress, 2001 . Chapter I: Introduction and Overview


The Welfare Indicators Act of 1994 (Pub. L. 103-432) directed the Secretary of Health and Human Services (HHS) to publish an annual report on welfare dependency.  This 2001 report, the fourth annual report, gives updated data on the measures of welfare recipiency, dependency, and predictors of welfare dependence developed for previous reports.  It is the first report to provide welfare dependency indicators for the 1996-1998 period, reflecting changes that have taken place since enactment of the Personal Responsibility and Work Opportunity Reconciliation Act (PRWORA) in August 1996.

The purpose of this report is to address questions concerning the extent to which American families depend on income from welfare programs.  Under the Welfare Indicators Act, HHS was directed to address the rate of welfare dependency, the degree and duration of welfare recipiency and dependence, and predictors of welfare dependence.  The Act further specified that analyses of means-tested assistance should include benefits under the Aid to Families with Dependent Children (AFDC) program, now the Temporary Assistance to Needy Families (TANF) program; the Food Stamp Program; and the Supplemental Security Income (SSI) program.

The first annual report was produced under the oversight of a bipartisan Advisory Board on Welfare Indicators, which assisted the Secretary in defining welfare dependence, developing indicators of welfare dependence, and choosing appropriate data.  Under the terms of the original authorizing legislation, the Advisory Board was terminated in October 1997, prior to the submission of the first annual report.  Subsequent annual reports have provided updates for the measures developed for the first report.  The report was shortened last year, in keeping with Congressional interest in a smaller set of indicators and predictors of dependency.

This 2001 report provides updated measures through 1998 for several dependency measures, a significant update from the 1995 measures reported last year.  This update was possible because of a change in data source for a half-dozen indicators, from the Survey of Income and Program Participation (SIPP) to the Current Population Survey (CPS).  Whereas the SIPP data are only available through 1995, the CPS data are available for more recent years, allowing examination of indicators and predictors of dependency since the 1996 enactment of welfare reform.  Concurrent with the change in data source, the report has been reorganized slightly, with the annually updated figures now presented at the beginning of each section, followed by the measures that are updated less frequently.

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