The most direct way to assess how the caseload decline has affected families is to track the economic status of welfare leavers. This task has been the focus of a substantial amount of research over the past several years (Office of the Assistant Secretary for Planning and Evaluation, 2001; Cancian, Haveman, Meyer, and Wolfe, 2000; Brauner and Loprest, 1999). In 1998, for example, the U.S. Department of Health and Human Services (HHS) funded a series of “leaver” studies in 11 states and three counties. The studies follow recipients who left welfare for at least two consecutive months during a given period, tracking their post-exit outcomes, such as employment, earnings, welfare recidivism, and family income (Office of the Assistant Secretary for Planning and Evaluation, 2001). Employment, earnings, and benefit receipt are typically tracked using state administrative records data, while data on family income and well-being are obtained from follow-up surveys, administered anywhere from six months to three years after the welfare exit. Another source of information on leavers is the National Survey of America’s Families (NSAF) conducted by the Urban Institute (Brauner and Loprest, 1999). The NSAF was administered in 1997 and again in 1999 to a nationally representative sample of the civilian population under age 65.
Both the HHS-sponsored studies and those using the NSAF data have provided evidence on who leaves welfare and how they fare. Leavers are typically defined in this research as people who left welfare at some point in the two years prior to the survey and were not receiving welfare at the time of the survey. The findings from all the studies are fairly consistent in that leavers look less disadvantaged and more employable than stayers. Leavers are more educated; they have fewer children; they are less likely to have young children; and they are more likely to have prior work experience (Verma and Colton, 2001; Acs, Loprest, and Roberts, 2001; Loprest and Zedlewski, 1999).
In terms of how families fare after leaving welfare, the research focuses on three types of outcomes: work, welfare, and income (Isaacs and Lyon, 2000; Brauner and Loprest, 1999; Loprest, 1999).
Employment and Earnings. The majority of leavers are working, with employment rates in the first quarter after exit ranging from 50 percent to 75 percent. Continuous leavers, or those who were still off welfare by the time of the follow-up survey, had somewhat higher employment rates than the full group of leavers. Although most were employed, their average earnings were fairly low—about $1,000 per month.
Benefit Receipt. About a third of the leavers had returned to welfare at some point within the first year after exit. Among all leavers, the use of non-welfare benefits is generally lower than would be expected, given that most of them probably remain eligible for benefits. Medicaid enrollment falls after exit; in the quarter after exit, enrollment rates in most studies ranged from 35 percent to 60 percent. Only about 40 percent to 60 percent of leavers stayed on Food Stamps after exit.
Income/Material Hardship. Most families are still struggling economically after they leave welfare, and a fair number report facing various hardships, such as problems providing enough food or paying rent. Average household income, as measured on the surveys, ranged from $1,050 to $1,400. In the two studies that calculated a poverty rate, 58 percent of leavers had incomes below the poverty level. On the other hand, a few state studies asked leavers to compare their well-being before and after welfare, and the majority of respondents reported that they were better off after having left welfare. Some of the studies also compare the leavers with current recipients in order to put their economic status into context. The results are mixed: In some states, leavers were worse off than current recipients; in other states, they were better off (Isaacs and Lyon, 2000). Using the NSAF data, Loprest and Zedlewski (1999) found few differences between leavers and stayers in terms of economic hardship. Finally, Loprest (1999) compared leavers with low-income single mothers who had not received welfare in the two years prior to the survey; the leavers faced consistently higher rates of hardship than these other low-income women.
Outcomes also differ depending on the reason the family leaves welfare. People who leave because they receive a sanction, for example, generally have lower employment rates than other leavers (Brauner and Loprest, 1999). People who leave because of reaching a time limit have also been compared with other leavers (see Bloom et al., 2002, for a review). The two groups tend to have similar post-exit employment rates, and time-limit leavers are more likely to receive non-welfare benefits, such as Medicaid and Food Stamps. The evidence from several state studies does not tell a consistent story about whether time-limit leavers fare worse economically than other leavers.
It is important to note that these studies do not show causation. People who leave welfare may be better or worse off than those who stay, or better or worse off than other low-income women, but this does not prove that leaving welfare led to that outcome. Gauging the effects of leaving welfare requires knowing the counterfactual, or how these families would have fared had they stayed on welfare.
Another line of research examines whether people who left more recently are worse off economically than those who left several years ago. If the “get tough” message and practice of welfare reform pushed more and more families off welfare who are less equipped to work, then leavers in recent years may be worse off and more disadvantaged than the leavers of the mid- or early 1990s. Although most leavers at a given point in time are struggling economically, there is little evidence to suggest that more recent leavers are worse off. The study in Cuyahoga County, for example, found that people who left welfare in 1998 were more likely to work and more likely to work consistently than those who left in 1996 (Verma and Colton, 2001). There were also few differences in their demographic characteristics. Loprest (2001) compared leavers from the two waves of the NSAF and found that the two groups look fairly similar in terms of demographic characteristics and employment rates. The picture in terms of economic well-being was less clear. Although fewer of the recent leavers were below poverty, more of them reported economic struggles with respect to buying food and paying rent.