Iowa's Limited Benefit Plan. J. Summary of Findings


The flow analysis uses administrative data from the Iowa DHS to examine reasons for assignment to the LBP, characteristics of LBP cases, paths out of the LBP, and the receipt of FIP and Food Stamp benefits by LBP cases. Several major findings emerge from this analysis:

  • Nearly all LBP assignments are made because the client fails to take the steps necessary to develop and sign an FIA. Most often the client fails to make or keep the required PROMISE JOBS appointment.
  • Slightly more than half of LBP assignments are canceled. The vast majority of cancellations occur because the client reconsiders and signs an FIA.
  • Most cases with never-canceled LBP assignments exit early--that is, they stop receiving FIP cash assistance before they reach the six-month FIP ineligibility period of the LBP.
  • On average, cases with canceled LBP assignments tend to be more disadvantaged than cases with never-canceled LBP assignments; however, the differences between the groups are not large.
  • Relatively few cases exposed to the full LBP term return to FIP within three months of regaining eligibility for cash assistance. On average, cases that do return to FIP tend to be more disadvantaged than those that do not return, although the differences between the groups are not large.
  • Although eligibility for Food Stamps is retained when cash benefits are reduced and terminated under the LBP, participation in Food Stamps decreases at these points, with relatively larger decreases among never-canceled LBP cases.
  • When FIP cash benefits are reduced and subsequently terminated for cases continuing in the LBP, Food Stamp benefits increase modestly for those receiving Food Stamps. This suggests that Food Stamps provide a small safety net for some LBP cases.

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1. The file also includes information on families that are not in the FIP program but are participating in, or have applied for, Food Stamps or Medicaid. This analysis is restricted to families in the FIP program.

2. A small amount of additional case-level data was obtained from the June 1996 Case Master File, which became available late in the study.

3. In 98 percent of LBP assignments during the sample period, the assignment covered all members of the individual's case.

4. There were 112 LBP assignments in the sample window that were not first assignments to the LBP. Exclusion of these cases brought our sample size down from 4,374 to 4,262.

5. There were 30 cases with multiple records per case with the same starting date in the sample window. Exclusion of these cases brought our sample size from 4,262 to 4,232.

6. Eight observations were excluded due to missing data on key variables of interest. This brought our sample size from 4,232 to 4,224.

7. As mentioned in Chapters 1 and 2, some cases volunteer for assignment to the LBP. The administrative reason for assignment coded for such cases depends on the stage in the FIA process at which they volunteer for the LBP.

8. Even accounting for some voluntary assignments, these findings may suggest that the PROMISE JOBS appointment is the major hurdle in signing the FIA and, in turn, that efforts to facilitate these appointments would be very effective in increasing compliance with the FIA requirement. These results are consistent with the LBP Survey data, which suggests that there is some confusion or lack of understanding about the requirement that the welfare client arrange and attend PROMISE JOBS appointment. They are also consistent with finding that some welfare clients (20 percent of LBP Survey respondents) voluntarily enter the LBP; it is likely that these individuals make an intentional decision not to arrange or keep the PROMISE JOBS appointment.

9. This is defined as residing in a county designated as a Metropolitan Statistical Area (MSA). An MSA must include one city with 50,000 or more inhabitants or a Census Bureau-defined urbanized area of at least 50,000 inhabitants and a total metropolitan population of at least 100,000.

10. There is typically a lag between the date that the LBP assignment is made and the date it takes effect (the starting date).

11. A case whose LBP assignment is not canceled may return to FIP only following the completion of the full term of the LBP (12 months).

12. A small number of observations (52) have no cancellation code in the LBP Master File, but show evidence of cancellation in that they receive FIP benefits in at least two of the months of the FIP ineligibility period of the LBP.

13. In particular, these cases have stopped receiving FIP benefits by the first month of their scheduled LBP assignment and do not receive FIP during the first six months of that assignment.

14. One possible explanation for an early exit from FIP is that the household has raised its income through employment following assignment to the LBP. However, we have no data on earnings for these households and can only speculate as to the role of employment in the early exits.

15. More specifically, these cases have either (1) continuous receipt of FIP benefits during months 1-6 of the LBP and no FIP benefits during months 7-12, or (2) sporadic receipt of FIP benefits during months 1-6 of the LBP and no FIP benefits during months 7-12, as long as there are two months of continuous receipt of FIP benefits preceding the period of no benefits.

16. In Appendix Table A.1, we present the expanded set of characteristics that are in Table III.3 for the two subgroups analyzed here.

17. In Appendix Table A.2, we present the expanded set of characteristics that are in Table III.3 for the two subgroups analyzed here.

18. These differences are consistent with our earlier suggestion that early exits may be correlated with an increase in employment and earnings (see footnote 12). Specifically, the characteristics of those that exit early, relative to those that do not, are suggestive of higher labor force participation and attachment; however, since we have no data on earnings for these households we can only speculate on this issue.

19. Table III.9 presents results for FIP benefit receipt in individual months of the LBP without reference to other months. This differs from the analysis of paths through the LBP for never-canceled cases (Table III.6), which focuses on patterns in benefit receipt across months.

20. In addition, some of these cases are: (1) canceled LBP cases, and (2) other never-canceled LBP cases that have benefit receipt that is generally consistent with 12 months on the LBP but includes some sporadic receipt in months 1-6, including none in month 1.

21. This implies that 28 percent are not receiving FIP as of month 1. This is slightly higher than the percent of never-canceled LBP cases (26 percent) that are classified as exhibiting an early exit before the LBP starts (Table III.6). This can be explained by the fact that a small number of the never-canceled LBP cases that are classified as having FIP benefit receipt consistent with the 12-month LBP do not actually receive FIP benefits in month 1 of the LBP (this is explained further in the notes to Table III.6).