Performance Improvement 2009. Do Former Temporary Assistance for Needy Families Recipients Return, Stay Employed, or Receive Unemployment Insurance Benefits?

01/01/2009

This study examined subsequent joblessness, application for Unemployment Insurance (UI) benefits, eligibility for UI benefits, and rates of UI benefit receipt among Temporary Assistance for Needy Families (TANF) recipients who left the program for employment. Researchers compared the levels of TANF and UI income support, and calculated the rate of return to TANF between UI beneficiaries, non-applicants, and ineligible applicants. Findings were compared to results from earlier studies measuring UI eligibility and receipt among those who left social assistance programs.

The study estimated that among TANF leavers who became newly unemployed and applied for UI benefits, nearly 91 percent would be eligible for monetary reasons, 36 percent would be eligible for non-monetary reasons, and 55 percent would ultimately draw UI benefits. In previous research, the highest estimated rate of UI benefit receipt among TANF leavers was 33 percent. Results suggested that UI may serve as a safety net for TANF leavers. Researchers found evidence that receipt of UI benefits is associated with a lower rate of return to TANF. Among TANF leavers who applied for UI, receipt of benefits reduced the rate of return to TANF by 22 percent compared to the rate observed for applicants who did not qualify and receive UI benefits. On a monthly basis, UI benefits were two to five times more generous than TANF payments. But small changes in the relative generosity of UI-to-TANF did not affect the rate of return to TANF. Taken together, these results suggest that UI benefit receipt might be serving as a proxy for strong labor force attachment. It might not be the income replacement function of UI that reduces return to TANF, but instead those who receive UI benefits might simply have better prospects for maintaining self-sufficiency through employment. Further investigation into the relative importance of UI income support and labor force attachment could inform policy.

Report Title: UI as a Safety Net for Former TANF Recipients http://aspe.hhs.gov/hsp/08/UI-TANF/index.htm
Agency Sponsor: ASPE-OHSP, Office of Human Services Policy
Federal Contact: Reuben Snipper, 202-401-6615
Performer: W.E. Upjohn Institute for Employment Research
PIC ID: 8929

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