This introductory chapter provides an overview of the specific summary measure of welfare dependence proposed by a bipartisan Advisory Board1 and adopted for use in this annual report series. It also discusses summary measures of poverty, following the Advisory Board’s recommendation that dependence measures not be assessed in isolation from other measures of economic well-being. The introduction concludes with a discussion of data sources used for the report.
Chapter II of the report, Indicators of Dependence, presents ten indicators of welfare dependence and recipiency. These indicators include dependence measures based on total income from all three programs – AFDC/TANF, SSI, and food stamps – as well as measures of recipiency for each of the three programs considered separately. Labor force participation among families receiving welfare and benefit receipt across multiple programs are also shown. The second half of the chapter includes longitudinal data on transitions on and off welfare programs and spells of dependence and recipiency. This section also includes a measure of long-term program receipt of up to 10 years, and a newly updated measure of events associated with the beginning and ending of program spells.
Chapter III, Predictors and Risk Factors Associated with Welfare Receipt, focuses on predictors of welfare dependence – risk factors believed to be associated with welfare receipt. These predictors are shown in three different groups:
- Economic security – including various measures of poverty, receipt of child support, food insecurity, and health insurance coverage – is important in predicting dependence because families with fewer economic resources are more likely to rely on welfare programs for their support.
- Measures of the work status and potential barriers to employment of adult family members also are critical, because families must generally receive an adequate income from employment in order to avoid dependence without severe deprivation.
- Finally, data on nonmarital births are important since a high proportion of long-term welfare recipients first became parents outside of marriage, frequently as teenagers.
Additional data and technical notes are presented in four appendices. Appendix A provides basic program data on each of the main welfare programs and their recipients; Appendix B shows how dependence is affected by the inclusion of benefits from the SSI program; Appendix C includes additional data on nonmarital childbearing; and Appendix D provides background information on several data and technical issues. The main welfare programs included in Appendix A are:
- The Aid to Families with Dependent Children (AFDC) program, the cash assistance program serving the largest number of persons, provided monthly cash benefits to families with children, until its replacement by the Temporary Assistance for Needy Families (TANF) program, which is run directly by the states. Data on the AFDC and TANF programs are provided in Appendix A, with AFDC data provided from 1977 through June 1997, and TANF data from July 1997 through 2003.
- The Food Stamp Program provides monthly food stamp benefits to individuals living in families or alone, provided their income and assets are below limits set in Federal law. It reaches more poor people over the course of a year than any other means-tested public assistance program. Appendix A provides historical data from 1970 to 2003.
The Supplemental Security Income (SSI) program provides monthly cash payments to elderly, blind, or disabled individuals or couples whose income and assets are below levels set in Federal law. Though the majority of recipients are adults, disabled children also are eligible. Historical data from 1974 through 2003 are provided in Appendix A.
1 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.