Initial Synthesis Report of the Findings from ASPE's "Leavers" Grants. IV. Income and Poverty


Income and poverty status are important indicators of the well-being of welfare leavers. Yet few leaver studies fully examine the income of leavers. There are several important reasons for this. First, most leaver studies focus on the first year after leaving-very few leavers are likely to achieve economic security in such a short period of time. Indeed, most leavers will have low incomes. Second, income is very hard to measure accurately. Perhaps the most reliable source of income data are tax records; such records are highly confidential and are rarely available for research purposes. Most information on income comes from survey data, but to obtain fairly accurate income information, the survey generally must devote a great deal of time to ask about each possible income source and then obtain the amount. Few of the leaver study surveys could afford to devote this level of time to obtaining income data. Finally, income is only one measure of well-being, and many surveys ask about explicit hardships leavers face. We discuss this hardship information in a later section.

Four of the leaver studies reviewed here obtain data on income through surveys (Arizona, Illinois, Missouri, and Washington state). Table IV.1 shows that mean monthly incomes range from $964 in Illinois to $1,427 in Missouri. (12) It is important to note that Illinois and Washington report monthly income six to eight months after exit while Missouri examines income two to three years after exit. Further, Illinois' survey simply asks respondents to estimate their monthly incomes while Missouri's survey asks a detailed set of questions about income sources and amounts. Finally, Missouri includes two-parent families in its findings. Thus, these factors may help explain why Missouri leavers appear to have higher monthly incomes.


Table IV.1:
Income of Welfare Leavers:
Survey Findings
State/Study Exit Cohort Timing of Survey Monthly Income1 ($)
Mean Median
Arizona2 1Q98 12-18 months 1,269 3 n.a.
Illinois2 Dec. 1998 6-8 months 964 800
Missouri 4Q98 26-34 months 1,427 1,166
Washington2 Oct. 1998 6-8 months 1,208 1,000
1 Income data are reported for cases in Arizona, households in Illinois and Missouri, and families in Washington.
2 Income data reported for single- parent cases.
3 Arizona reports income including food stamps; we present an adjusted version of income, reducing reported income by 7% because 7% of the average family income of welfare leavers in Arizona comes from food stamps.
Source: See Appendix B for a complete listing of the leavers studies referenced.

Since about three out of five leavers are working, it is not surprising to find that 60 to 65 percent of leavers in the three surveys that ask about the sources of their income report having income from earnings (table IV.2). In addition, leavers may have access to the earned income of other household members. In Washington state, 21 percent of leavers have access to another's earnings, and in Missouri and Illinois, 86 and 80 percent of leavers, respectively, are in families in which someone is earning money (see table IV.2). Another source of income for leavers is child support; between 11 and 31 percent of leavers receive child support. Finally, leavers may receive support from public programs like SSI, and some may have returned to TANF. We examine the use of public programs later.


Table IV.2:
Leavers' Income from Private Sources:
Survey Findings
State/Study Exit Cohort Timing of Survey Post Exit Percent of Leavers With Income From:
Own Earnings Other Earnings Any Earnings Child Support
District of Columbia1 4Q98 ~12 months 60 n.a. 64 11
Illinois Dec. 1998 6-8 months 63 n.a. 86 31
Missouri 4Q98 26-34 months 65 n.a. 80 22
Washington1 Oct. 1998 6-8 months 60 21 n.a. 23
1 Income data reported for single- parent cases.
Source: See Appendix B for a complete listing of the leavers studies referenced.

Regardless of the sources of their income, the time period over which their income was measured, or the rigor with which they were asked about their incomes, all leaver studies that examine income show that leavers' incomes hover near the poverty line. Missouri and Washington explicitly examine the poverty status of leavers and both find that 58 percent of leavers have cash incomes that leave them in poverty (table IV.3). Note that Washington's study indicates that 42 percent of leavers are not poor 6 to 8 months after leaving welfare-the same share reported by Missouri over two years after its leavers exited welfare.


Table IV.3:
Poverty Among Welfare Leavers:
Survey Findings
State/Study Exit Cohort Timing of Survey
Post Exit
% Poor % Below 185% of
Federal Poverty Level
Missouri 4Q98 26-34 months 58 89
Washington1 Oct. 1998 6-8 months 58 n.a.
1 Poverty data reported for single-parent cases.
Source: See Appendix B for a complete listing of the leavers studies referenced.

Missouri's study also shows that almost nine out of every ten leavers have incomes below 185 percent of the federal poverty line. Low income leavers may be eligible for various in-kind public supports such as food stamps, WIC, child care assistance, and Medicaid or other public health insurance programs all of which can enhance their well-being and are not included in these poverty measures. In addition, low-income working leavers can receive cash support from the Earned Income Tax Credit, currently the largest program supporting low-income families in the US.