Indicators of Welfare Dependence: Annual Report to Congress, 2004. Chapter I. Introduction and Overview

04/27/2005

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 2004 report, the seventh 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.

This 2004 report provides updated measures through 2001 for dependency measures based on the Current Population Survey (CPS), with one preliminary estimate for 2002. Although more recent administrative data provide some information on recipiency through 2003, the survey data needed to examine overall welfare recipiency are not available past 2001 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 (PSID). This report presents analysis of PSID data through 2000 (IND 9 in Chapter II), an improvement over data through 1996 published in the previous two annual reports. These newly available PSID data allow for the examination of long-term recipiency since the enactment of welfare reform in 1996. As in the 2003 report, measures updated annually 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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