The following tables and figures present data on caseloads, expenditures, and recipient characteristics of the AFDC and TANF programs. Trends in national caseloads and expenditures are shown in Figures TANF 1 and TANF 2, and the first set of tables (Tables TANF 1 through 6). These are followed by information on characteristics of AFDC/TANF families (Table TANF 7)5 and a series of tables presenting state-by-state data on trends in the AFDC/TANF program (Tables TANF 8 through 15). These data complement the data on trends in AFDC/TANF recipiency and participation rates shown in Tables IND 3a and IND 4a in Chapter II.
AFDC/TANF Caseload Trends (Tables TANF 1 through TANF 3 and Figure TANF 1). Welfare caseloads have stabilized over the past few years after declining dramatically during the 1990s. In FY 2006, the average monthly number of TANF recipients was 4.7 million persons, down 7 percent from FY 2005. Moreover, this was 62 percent lower than the average monthly AFDC caseload in FY 1996 and the smallest number of people on welfare since 1967. From the peak of 14.2 million in FY 1994, the number of AFDC/TANF recipients dropped by 67 percent to 4.7 million in FY 2007.6 Over four-fifths of the reduction in the caseload since FY 1994 has occurred following the passage of PRWORA in FY 1996. These are the largest welfare caseload declines in the history of U.S. welfare programs.
Several studies have attempted to explain the unprecedented decline in caseloads and, specifically, to disentangle the effects of PRWORA and welfare reform from the simultaneous growth in the U.S. economy. Separating these effects is difficult, however, because PRWORA was enacted at a time when the economy was expanding dramatically, offering a uniquely conducive environment within which to move many recipients off the welfare rolls and into the labor market. Other policy changes, most notably expansions in the Earned Income Tax Credit, add further complexity.
In general, studies have found that both economic conditions and welfare reform policies have played important roles in the recent caseload decline. A review of a dozen studies concluded that roughly 15 to 30 percent of the caseload decline prior to 1996 was attributed by most studies to welfare policies under waivers to the AFDC rules with approximately 30 to 45 percent of the decline explained by economic conditions (Schoeni and Blank, 2000). A study by the Council of Economic Advisers (1999) of the post-PRWORA period finds that just over one-third of the caseload decline can be explained by welfare reform policy, while 8 to 10 percent is due to the economy. A more recent study estimates that over half the decline in caseloads after enactment of PRWORA was attributable to welfare reform (O’Neill and Hill, 2001).
AFDC/TANF Expenditures (Tables TANF 4 through TANF 6 and Figure TANF 2). Tables TANF 4 and 5 show trends in expenditures on AFDC and TANF. Table TANF 4 tracks both programs, breaking out the costs of benefits and administrative expenses. It also shows the division between federal and state spending. Table TANF 5 shows the variety of activities funded under the TANF program.
Figure TANF 2 and Table TANF 6 show that inflation has had a significant effect in eroding the value of the average monthly AFDC/TANF benefit. In real dollars, by 2006 the average monthly benefit per recipient had declined to 65 percent of what it was at its peak in the late 1970s.
AFDC/TANF Recipient Characteristics (Table TANF 7). With the dramatic declines in the welfare rolls since the implementation of TANF, there has been a great deal of speculation regarding how the composition of the caseload has changed. Two striking trends are the increases in the proportion of families with no adult in the assistance unit and in employment among adult recipients.
One of the most dramatic trends is the increase in the proportion of adult recipients who are working. In FY 2006, 22 percent of TANF adult recipients were employed, down from 26 percent in 2000, but up from 11 percent in FY 1996 and 7 percent in FY 1992, as shown in Table TANF 7. Adding in those in work experience and community service positions, the percentage working was 30 percent in FY 20067 (data not shown). Similar trends are shown in data on income from earnings. These trends likely reflect the effects of expanded earnings disregards, welfare-to-work programs, and the economy. One can also see a relationship between employment of welfare recipients and broader trends in labor force participation. (For example, see Table WORK 8 in Chapter III for trends in employment rates for women with children under age 18.)
Another dramatic change in the caseload is the increasing fraction of cases without an adult recipient. Such cases occur when the adults are ineligible (because they are a caretaker relative, SSI parent, immigrant parent, or sanctioned parent). Families with no adults in the assistance unit have climbed from 15 percent of the caseload in FY 1992 to 47 percent in FY 2006.8 This dramatic growth has been due to an increase in the number of cases without recipient adults during the early 1990s, followed by a decline in the number of cases that included adults in the assistance unit. The number of cases without an adult in the assistance unit has fallen by about 127,000 since 1996 — between 1996 and 1998 they decreased by 254,000 but subsequently increased by 127,000.
In other areas, TANF administrative data show fewer changes in composition than might have been expected. There has been widespread anecdotal evidence that the most job ready recipients — those with the fewest barriers to employment — have already exited the welfare caseload and have stopped coming onto the welfare rolls, leaving a more disadvantaged population remaining. However, as the expectations for welfare recipients have increased, and fewer recipients are totally exempted from work requirements, others have speculated that the most disadvantaged recipients may also have been sanctioned off the rolls or terminated for failure to comply with administrative requirements. In fact, analyses of program data have not found much evidence of an increase or decrease in readily observed barriers to employment in the current caseload.
The question of whether the caseload has become more disadvantaged cannot be answered simply through TANF administrative data provided by the states, which do not contain detailed information on such barriers to employment as lack of basic skills, alcohol and drug abuse, domestic violence, and disabilities. A few recent studies have found very high levels of these barriers among the TANF population. These studies also have found that the more barriers a recipient faces, the less likely she is to find a job and maintain consistent employment over a period of time.
AFDC/TANF State-by-State Trends (Tables TANF 8 through TANF 15). There is a great deal of state-to-state variation in the trends discussed above. For example, as shown in Table TANF 10, while every state has experienced a caseload decline since the 1990s, the percentage change between the state’s caseload peak and March 2007 ranges from 96 percent (Wyoming) to 44 percent (Nebraska). Sixteen states have experienced caseload declines of 75 percent or more. Table TANF 10 also shows that states reached their peak caseloads as early as May 1990 (Louisiana) and as late as June 1997 (Hawaii).
Table TANF 15 shows TANF and Separate State Program (SSP) families and recipients, by state. Thirty-two states (including DC) had such programs.
Figure TANF 1.
AFDC/TANF Families Receiving Income Assistance
Note: “Basic Families” are single-parent families and “UP Families” are two-parent cases receiving benefits under AFDC Unemployed Parent programs that operated in certain states before FY 1991 and in all states after October 1, 1990. The AFDC Basic and UP programs were replaced by TANF as of July 1, 1997 under the Personal Responsibility and Work Opportunity Reconciliation Act of 1996. Shaded areas indicate NBER designated periods of recession from peak to trough. The decrease in number of families receiving assistance during the 1981-82 recession stems from changes in eligibility requirements and other policy changes mandated by OBRA 1981. Beginning in 2000, “Total Families” includes TANF and SSP families. Last data point plotted is March 2007.
Source: U.S. Department of Health and Human Services, Administration for Children and Families, Office of Planning, Research, and Evaluation.
Figure TANF 2.
Average Monthly AFDC/TANF Benefit per Recipient in Constant 2006 Dollars
Note: See Table TANF 6 for underlying data. Comparison of trends in the average monthly AFDC/TANF benefit per recipient in constant 2006 dollars with the weighted average maximum benefit in constant 2006 dollars since 1988 indicates that the primary cause of the decline in the average monthly benefit has been the erosion of the real value of the maximum benefit due to inflation. This is due to the fact that the current value of the maximum benefits has increased less than the cost of living in most states since the late1980s.
Source: U.S. Department of Health and Human Services, Administration for Children and Families, Office of Family Assistance, Quarterly Public Assistance Statistics, 1992 & 1993 and earlier years along with unpublished data.
Table TANF 1.
Trends in AFDC/TANF Caseloads: 1962-2006
Table TANF 2.
Number of AFDC/TANF Recipients, and Recipients as a Percentage of Various Population Groups: 1970-2006
Table TANF 3.
TANF and Separate State Program (SSP) Families and Recipients: 2000-2006
Table TANF 4.
Total AFDC/TANF Expenditures on Cash Benefits and Administration: 1970 – 2006
[In millions of dollars]
Table TANF 5.
Federal and State TANF Program and Other Related Spending: 1997 – 2006
[In millions of dollars]
Table TANF 6.
Trends in AFDC/TANF Average Monthly Payments: 1962 – 2006
Table TANF 7.
Characteristics of AFDC/TANF Families: Selected Years 1969 – 2006
Table TANF 8.
AFDC/TANF Benefits by State: Selected Fiscal Years 1978 – 2006
[In millions of dollars]
Table TANF 9.
Comparison of Federal Funding for AFDC and Related Programs and 2006 Family Assistance Grants Awarded under PRWORA
[In millions of dollars]
Table TANF 10.
AFDC/TANF Caseload by State: October 1989 to March 2007 Peak
Table TANF 11.
Average Monthly AFDC/TANF Recipients by State: Selected Fiscal Years
Table TANF 12.
AFDC/TANF Recipiency Rates for Total Population by State: Selected Fiscal Years
Table TANF 13.
Average Number of AFDC/TANF Child Recipients by State: Selected Fiscal Years
Table TANF 14.
AFDC/TANF Recipiency Rates for Children by State: Selected Fiscal Years 1965 – 2006
Table TANF 15.
TANF and Separate State Program (SSP) Families and Recipients: 2006