This report uses data from several evaluations of welfare-to-work programs to divide the caseload into three groups: leavers, stayers, and cyclers. The study finds that people who leave welfare and stay off long term differ in a range of expected ways from people who stay on welfare persistently. These leavers are more educated, for example, and they face fewer other potential barriers to work. They had somewhat higher incomes than stayers, but most were still poor or near-poor. They were also more likely to have problems with access to health care. The results highlight the importance of access to post-welfare services, particularly (1) skill-building and
retention services to help former recipients move into better-paying jobs over time and (2) help in obtaining other benefits for which they are eligible, such as Food Stamps and health insurance. These types of services may be especially helpful for people who leave welfare because of reaching a time limit.
Somewhat surprisingly, the group defined as cyclers looks similar to the leaver group in terms of demographic characteristics and barriers to employment. One-third of the people in the cycler group had only one short welfare spell during the period. Nonetheless, the remaining cyclers, who had multiple welfare spells, also look more like leavers than stayers. It is encouraging that these cyclers do not face more barriers to work than other groups, but the results also highlight the need to provide families with services after they leave welfare, so that fewer of them need to return.
About one-third of the people who left welfare were not working when they left, and few of these people went to work in the subsequent year. One caveat to this finding is that work status is defined using administrative records from the Unemployment Insurance system, which misses employment for some workers. Although it is not clear why these people left welfare without work, most of them did not leave for marriage, and many eventually returned to the rolls. Their lack of work appears to be more closely related to the higher number of employment barriers they face. This is another group that needs assistance after leaving welfare—assistance finding and keeping jobs.
Finally, consistent with other recent research, there is little evidence that welfare-to-work programs have affected the composition of the caseload. Stayers in these programs were not more disadvantaged than stayers who were not in the programs. In fact, stayers in the programs with generous financial incentives were better off than other stayers; the incentives allowed more of them to work and still receive benefits, with the result that they had higher incomes. Thus,
enhanced financial incentives, which many states now use, can positively affect the caseload by increasing incomes and increasing work experience. However, most state programs also include time limits, which will eventually turn many stayers into leavers. The findings here show that granting extensions to families who reach a time limit but who have low earnings is one way to ensure that people are, in fact, better off when they leave welfare.