Indicators of Welfare Dependence: Annual Report to Congress, 2003. I. Introduction and Overview

03/01/2003

The Welfare Indicators Act of 1994 (Pub. L. 103-432) directed the Secretary of Health andHuman Services (HHS) to publish an annual report on welfare dependency. This 2003 report, the sixth annual indicators report, gives updated data on the measures of welfare recipiency, dependency, and predictors of welfare dependence developed for previous reports. It reflects 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 for 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. In recent years, the report has been shortened, in keeping with Congressional interest in a smaller set of indicators and predictors of dependency.

This 2003 report provides updated measures through 2000 for dependency measures based on the Current Population Survey (CPS), with one preliminary estimate for 2001. Although more recent administrative data provide some information on recipiency through 2002, the survey data needed to examine overall welfare recipiency are not available past 2000 for the CPS-based measures, and are even less current for measures based on the Survey of Income and Program Participation (SIPP) and the Panel Study of Income Dynamics. This report presents analysis of SIPP data through 1999 for the current report, an improvement over the 1995 data published in the previous three annual reports. These newly available SIPP data allow for the examination of a wider range of indicators and predictors of dependency since the enactment of welfare reform in 1996. As in the 2002 report, updated measures are presented at the front of each chapter, followed by the figures that are derived from data sources that are updated less frequently.

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