Interim Status Report on Research on the Outcomes of Welfare Reform. Outcomes in both low and high economic growth areas

06/01/1999

State proposals for grants under both the leavers and child indicators solicitations were evaluated along many dimensions to ensure the collection of information on welfare outcomes from a variety of disparate sources.  For example, grants were awarded to large urban areas and rural states (Los Angeles County and West Virginia); to states with large and virtually non­existent immigrant populations (Florida and Vermont); and to states whose welfare benefit levels varied greatly in relation to poverty guidelines (18 percent of poverty in South Carolina and 66 percent of poverty in Alaska).  ASPE also attempted to include a wide range of economic conditions among the grantees.

Despite the generally widespread and sustained period of economic growth throughout the country, ASPE considered several different measures of economic conditions as proxies for low and high growth economic areas.  Among those measures for which state data are available were the unemployment rate, the rate of employment growth, and changes in the “not employed” (unemployed plus “not in the labor force”) rate.  Ultimately the Change in Employment/ Population Ratio was determined to be a good measure for purposes of studying welfare outcomes.  This ratio compares job growth to population growth in a state — a positive change in the ratio means that the number of new jobs is growing faster than the population (including but not limited to new job seekers); a negative change in the ratio means that the population is growing faster than the number of new jobs.  ASPE also examined changes in the employment/population ratio over three time periods — 1996­1997 (the most recent period for which data were available when grant applications were being evaluated in 1998), 1995­1997, and 1994­1997.  Given the wide variation in small states’ performance from year to year, ASPE concluded that using the three­year average would be a more stable and reliable measure of actual state performance.

Figure 3 displays the percent changes in the Employment/Population Ratio from 1994­1997 for all states.  Of a total of 23 leavers and/or child indicators grantees, ten states (Maine, Washington, Missouri, West Virginia, Massachusetts, New York, Rhode Island, Wisconsin, Georgia and California) are among the top third in performance on the Employment/Population Ratio, with a positive ratio of 3.0 or greater.  Seven states (Delaware, Utah, Arizona, Hawaii, Minnesota, Alaska and Iowa) and the District of Columbia, had negative ratios, and are among the bottom third of performers.

Figure 3.
Percent Change in Employment/Population Ratio, 1994 - 1997

Figure 3. Percent Change in Emplyment/Population Ratio, 1994-1997, by State

Note:  An “L” next to the state name denotes receipt by the state or some counties of a grant to study welfare outcomes (“leavers”); a “C” denotes a state receiving a grant to develop child indicators.

Source:  U.S. Department of Labor, Bureau of Labor Statistics, Local Unemployment Statistics, Geographic Profile of Employment and Unemployment, annual, (data available online at http://stats.bls.gov/).