A Profile of Families Cycling on and off Welfare. How do patterns of cycling differ before and after PRWORA?

04/01/2004

To understand how cycling behavior changes over time, consider Figure 4. Each point on the figure represents an outcome for a group of new recipients. For example, the left-most point on each line represents the outcomes for the first cohort of new recipients, who began receiving welfare in January 1993. The corresponding points at the far right of the diagram represent outcomes for the last cohort of new recipients, who began receiving welfare in December 1996.(40) The vertical line represents August 1996, the official signing of PRWORA. Points to the right of the vertical line represent outcomes for people who first began receiving welfare after PRWORA was enacted, while points to the left of the vertical line represent outcomes for people who began receiving welfare before PRWORA was enacted.

The outcome of greatest interest represented in Figure 4 is the percentage of new recipients in Cleveland who became cyclers (versus becoming either short-term or long-term recipients) within four years of first receiving benefits. This result is shown by the solid line closest to the x-axis. The left-most point on this line indicates that about 10 percent of adults who began receiving welfare in Cleveland in January 1993 became welfare cyclers by December 1996, four years later. The figure consequently provides information on whether the proportion of welfare cyclers changed over time and whether that change seemed related at all to the PRWORA reforms.

Figure 4 shows a fairly stable trend: later groups were slightly more likely to become welfare cyclers than earlier groups. For example, the right-most point indicates that more than 17 percent of people who began receiving welfare in December 1996 had become cyclers within four years (that is, by November 2000), compared with the 10 percent of the January 1993 group mentioned above.

A similar trend for Philadelphia is shown in Figure 6, although this trend is less pronounced than that of Figure 4. The left-most point of Figure 6 indicates that 4 percent of people who began receiving welfare in January 1993 went on to become cyclers by December 1996, four years later. By the end of the period, the number of people who became cyclers increased slightly. The right-most point of Figure 6 indicates that close to 9 percent of people who started receiving welfare for the first time in December 1996 went on to become cyclers by November 2000. This is an increase of almost 5 percentage points over the entire period.

Figure 6.
Percentage of Cyclers, Short-Term Recipients, and Long-Term Recipients for Philadelphia,
by First Month of Welfare Receipt:
January 1993 through December 1997

Percentage of Cyclers, Short-Term Recipients, and Long-Term Recipients for Philadelphia, by First Month of Welfare Receipt: January 1993 through December 1997

Sources: MDRC calculations from Cleveland administrative records.
Notes: The sample includes only new recipients during their month of sample intakes. See Table 2 for sample intake period for each site.

While the above descriptive analyses cannot determine whether PRWORA caused some or all of these trends, they do allow the comparison of the incidence of cycling pre- and post-PRWORA. Table 13 continues this analysis by averaging the incidence of cycling across all pre- and post-PRWORA months and then calculating the difference between these averages. The table also shows the pre-and post-PRWORA averages for becoming a short-term recipient and a long-term recipient. As previously, separate estimates are presented for Cleveland and Philadelphia.

For each comparison, the post-PRWORA sample includes all new recipients who first received welfare from August 1996 through the final month of sample intake, December 1996 in Cleveland and December 1997 in Philadelphia. Results for these groups are compared to two pre-PRWORA cohorts. The first (and larger) pre-PRWORA group includes all new recipients who first received welfare from January 1993 through July 1996. (See Table 13, top panel) Since the 1996 welfare reforms were widely publicized, it is reasonable to suspect that recipient behavior  especially that of recipients who started welfare receipt closest to 1996  may have changed prior to the actual implementation of the reforms.

To account for this reasonable change in behavior, the lower panel of Table 13 limits the pre-PRWORA sample to adults who first received welfare during January through December 1993. In other words, the behavior of recipients who began welfare receipt in 1993 is considered to be completely governed by the rules of the then current welfare regulations and not influenced by the 1996 reforms.

For the cycler outcomes in the top panel of Table 13, the PRWORA difference in becoming another type of recipient is small, but statistically significant in both sites. In Cleveland, during the pre-reform period, 11.4 percent of recipients who began welfare receipt went on to become cyclers within the next four years. In contrast, 14.8 percent of recipients who began welfare receipt during the post-reform period went on to become cyclers. This resulted (with rounding) in a 3.5 percentage point increase in the incidence of cycling between the pre- and post-PRWORA period.

The PRWORA difference in becoming a long-term recipient versus either a cycler or a short-term recipient is also statistically significant, implying more extensive changes occurred in welfare receipt behavior over the two periods. For example, the rate at which sample members became long- term recipients in Cleveland decreased by 12.7 percentage points over the pre- and post-PRWORA period. In contrast, the incidence of becoming a short-term recipient increased by 9.2 percentage points.

Table 13.
Percentage of Sample Members in Cleveland and Philadelphia
Who Became Cyclers, Short-Term Recipients, and Long-Term Recipients
During Years 1 to 4 by Timing of Sample Intake Month
Sample Intake Months
Site (%) Pre-PRWORA Post-PRWORA Difference
A. Pre-PRWORA: January 1993 to July 1996
Cleveland
  Cyclers 11.4 14.8 3.5 **
  Short-term recipients 54.6 63.9 9.2 **
  Long-term recipients 34.0 21.3 -12.7 **
Philadelphia
  Cyclers 3.8 6.3 2.5 **
  Short-term recipients 47.3 56.6 9.3 **
  Long-term recipients 48.9 37.0 -11.8 **
B. Pre-PRWORA: January 1993 to December 1993
Cleveland
  Cyclers 10.5 14.8 4.3 **
  Short-term recipients 50.1 63.9 13.8 **
  Long-term recipients 39.4 21.3 -18.2 **
Philadelphia
  Cyclers 3.8 6.3 2.6 **
  Short-term recipients 41.6 56.6 15.1 **
  Long-term recipients 54.7 37.0 -17.7 **
Sources: MDRC calculations using state and county administrative records.
Notes: The sample includes only new recipients during their month of sample intake. See Table 2 for sample intake period for each site. There were 26,365 and 49,067 sample members included in the regressions for Cleveland and Philadelphia, respectively.
Sample intake for the post-PRWORA group occured on or after August 1996.
"**" indicates statistical significance at the 0.05 level or smaller.

Table 13 also presents the results for Philadelphia. The top panel of this table shows that 6.3 percent of post-PRWORA groups of new recipients became cyclers, compared with 3.8 percent of pre-PRWORA groups. That is, the incidence of becoming a cycler versus another type of recipient increased over the period. This difference of 2.5 percentage points is small, but statistically significant. This is similar to the Cleveland results. The table also shows similar differences in the incidence of short-term and long-term recipiency compared to Cleveland's results. That is, short-term recipiency in Philadelphia increased by 9.3 percentage points, while long-term recipiency declined by 11.8 percentage points. It is interesting to note that while the pre- and post-PRWORA differences in Cleveland and Philadelphia are very similar, the overall levels of cyclers, both pre- and post-PRWORA, are significantly lower in Philadelphia than in Cleveland. Furthermore, the levels of long-term recipients are significantly higher in Philadelphia than in Cleveland.

The lower panel of Table 13 shows the results of a similar analysis using the more conservative pre-PRWORA period of 1993. The panel shows the same patterns as reported in the top panel, although the decrease in the rates of long-term recipiency and increase in the rates of short-term recipiency are noticeably larger in both sites.

How large are these effects? Comparing the PRWORA differences in cycling from the Urban Change sites to the effect of the programs from the random assignment evaluation sites helps to answer this question.(41) Compared with most welfare-to-work programs studied using random assignment in Table 12 (limited to new recipients), the differences reported in Table 13 are large. For example, Table 12 revealed that Connecticut's Jobs First program reduced welfare cycling by 1.5 percentage points, increased short-term recipiency by 2.4 percentage points, and decreased long-term recipiency by 0.9 percentage points in the four years after people entered the study. None of these effects were statistically significant at the five percent level. The lack of impacts compare with Cleveland's significant differences of a 3.5 percentage point increase in cycling, a 9.2 percentage point increase in short-term recipiency, and a decrease in long-term recipiency by 12.7 percentage points. While the differences in Table 13 are not causal, they do suggest that PRWORA may have influenced the large changes in recipient behavior.

Endnotes

(38) Recall that new recipients are defined as sample members who were just starting a welfare spell around their time of sample intake.

(39) A strong economy increases the demand for workers in the short term and a sustained, strong economy increases the demand for lower-skilled workers, resulting in higher employment at all skill levels. Declining caseloads suggest people are leaving the welfare rolls faster than new applicants start.

(40) Because the data for Cleveland extend back only to July 1992, there is no way to know whether someone received benefits prior to July 1992. The groups of "new" recipients, as they are defined here, may contain many people who had received benefits prior to July 1992 but who had not received benefits between July 1992 and the month when they began receiving benefits anew. Later groups of "new" recipients are likely to contain fewer relatively recent welfare recipients and more truly new recipients.

(41) Recall that this analysis, presented in Table 12, seeks to answer whether the program implemented at each evaluation site affected the likelihood of cycling.

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