Leavers, Stayers, and Cyclers An Analysis of the Welfare Caseload. Findings

11/01/2002

  • Long-term welfare leavers face fewer barriers to employment than long-term stayers and generally fare better economically. People who cycle on and off the welfare rolls look more similar to leavers than to stayers.

Leavers differed from stayers in a variety of expected ways (see Table S1). Leavers were older, more educated, and had fewer children than stayers. They also faced fewer barriers to employment; they were less likely to report child care problems, for example, and were more likely to have had work experience prior to entering the evaluation. Cyclers, on the other hand, looked fairly similar to long-term leavers, in part because many of them had only one or two short spells on welfare.  

Although each of the groups had low incomes during the follow-up period, leavers and cyclers had somewhat higher incomes than stayers and were much less likely to have income below the poverty line. However, leavers and cyclers were more likely to report facing material hardships, particularly problems in accessing health care.  
  • More than one-third of welfare leavers did not work in the months immediately following their welfare exit. These nonworking leavers faced more barriers to work than other leavers but had similar incomes.  
Thirty-six percent of long-term welfare leavers did not work in the months immediately following their exit, according to earnings data from state Unemployment Insurance systems. In general, people who did not work at welfare exit were more disadvantaged than those who did work (see Table S2). They were less educated, more likely to report other barriers to work, and much less likely to have had recent work experience. On average, however, they had similar incomes as working leavers by the time of the follow-up survey. Although they had lower earnings, they were more likely to rely on other sources of income and more likely to eventually return to welfare, Food Stamps, or both. There is little evidence that many nonworking leavers left welfare for marriage or cohabitation. 
 
Table S1:  Characteristics of Stayers, Leavers, and Cyclers
 
Characteristics Stayers Cyclers Leavers
No high school diploma/GED 54.7 46.6 46.9
Had children under age 6 64.0 54.9 54.4
Reported barriers to work:
Child care problems
69.2 52.7 58.9
Health or emotional problems 30.9 20.5 23.3
Did not work in year prior to
entering evaluation
61.2 40.5 52.8
Income below poverty in
year before follow-up survey
61.3 43.8 42.7

 

Table S2:  Characteristics of Nonworking and Working Leavers

Characteristics
Not working 
at welfare exit
Working  
at welfare exit
No high school diploma/GED 55.0 40.9
Had children under age 6 51.8 56.0
Reported barriers to work:
Child care problems
62.6 56.3
Health or emotional problems 30.2 17.6
Did not work in year prior to
entering evaluation
67.7 41.5
Income below poverty in
year before follow-up survey
45.1 40.2

 

  • People who stayed on welfare while subject to a welfare-to-work program had similar characteristics and employment barriers as people who stayed on welfare under the traditional AFDC system. 

The effects of welfare reform on the characteristics of the caseload can be inferred by comparing stayers in the program groups with their counterparts in the control groups. People in the program groups were subject to one of the programs being tested—each of which contains elements of states’ new Temporary Assistance for Needy Families (TANF) pro-grams—while those in the control group were subject to the traditional AFDC system. In general, the two groups looked fairly similar in terms of demographic characteristics and potential barriers to employment (see Table S3). 

Table S3:  Characteristics of Stayers in the Program Versus Control Groups
 
Characteristics Program Group Control Group
No high school diploma/GED 54.7 49.3
Had children under age 6 64.0 65.3
Reported barriers to work:
Child care problems
69.2 68.4
Health or emotional problems 30.9 26.7
Did not work in year prior to
entering evaluation
9.8 7.4
Income below poverty in
year before follow-up survey
61.3 66.0

 

  • People who stayed on welfare while subject to a welfare-to-work program had more work experience during the follow-up period than people who stayed under the traditional AFDC system. These differences were found only for the two welfare-to-work programs with the most generous financial incentives. 

Although several programs included financial incentives to work, in the form of enhanced earnings disregards, stayers in the two programs with the most generous incentives differed in two key ways from their control group counterparts. First, stayers in the program groups were more likely to have worked while on welfare, because the earnings disregards allowed more of them to work and still qualify for benefits. Second, because stayers in the program groups were more likely to have worked and because they received more generous welfare benefits when they did work, they had higher incomes than stayers in the control groups. 

***** 

The findings show that many families continue to need assistance after they leave welfare. Many families who leave and stay off long term remain poor after they leave, and many lack access to important benefits, such as Food Stamps and health insurance, for which they are probably still eligible. People who leave welfare without work have always been a group of special concern, and the findings indicate that they did not leave welfare without work because they got married. Rather, they were unable to overcome a range of potential barriers to work, such as low education and little prior work experience. These leavers need services to help them find and keep jobs. It is encouraging that people who cycle on and off welfare do not face more severe employment barriers than other groups in the caseload. Nonetheless, many of them obviously need assistance to avoid returning to welfare, which may not be an option in the era of time limits. Finally, although welfare-to-work programs were found to have few effects on the characteristics of the caseload, they do affect stayers’ economic status. Enhanced incentives, in particular, increase both the employment rates and the incomes of stayers. Although the fact that most states now use enhanced incentives is encouraging, most states also impose time limits. Time-limit policies could be designed so that the “leavers” who are forced off the welfare rolls by these programs would have adequate incomes. Time limits could also be combined with post-exit services that would be available to all leavers.  

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