A Profile of Families Cycling on and off Welfare. Program environments

04/01/2004

It is important to get an idea of the economic environment present over time in each site, as this may affect the outcomes of cyclers. Table 3 shows selected environmental statistics for each site over an eight-year period. In general, employment growth over the years of 1994 to 2001 ranged from around 2 to 3 percent in four sites and by more than 9 percent in Vermont. Growth in employment was greatest in Vermont and slowest in Cleveland.

The table also shows that unemployment rates generally declined over the period of 1994 to 2000. This decline was largest in Connecticut, where the unemployment rate decreased by 3.6 percentage points over the period. In 1994, Connecticut, Cleveland, and Philadelphia experienced the highest levels of unemployment, an average rate of 6.6 percent across these sites. However, by 2001, unemployment in Connecticut declined to levels comparable to Florida and Vermont.

Consistent with national trends, welfare caseloads declined dramatically (between 44 and 77 percent) in all sites, with the greatest decrease occurring in Florida, followed by Cleveland. (17) This large change in Florida may be explained by the extraordinary changes in both the state and federal welfare policy during the implementation years. For example, in addition to the Florida legislature voting to expand FTP from one county to several other Florida counties, it then passed the state's welfare reform act in May 1996, and the federal welfare reform act was passed just 3 months later. All of these changes were widely publicized. Another possible explanation for Florida's relatively large caseload decline may be its very high caseload level in the early 1990s. Perhaps because the state's caseload was so high, the rate of decline since that time has been much greater in Florida than most other states (the national caseload declined by 49 percent during the same period). From the Urban Change report, we know that the dramatic decline in caseloads in Cleveland occurred prior to the implementation of welfare reform and may be partially due to the strong economy or other factors.

Table 3.
Program Environments
Characteristic Evaluation Sites Vermont WRP Urban Change Sites
Connecticut Jobs First Florida FTP Cleveland Philadelphia
Total employed (a)
  1994 306,110 115,294 42,674 632,589 604,573
  1995 301,037 114,850 43,556 639,911 594,381
  1996 302,451 114,327 44,273 641,649 596,100
  1997 305,349 114,448 45,091 648,191 597,975
  1998 309,957 115,464 46,007 643,281 593,325
  1999 309,826 115,612 46,873 645,339 592,102
  2000 320,244 114,813 46,425 646,281 623,460
  2001 317,015 119,104 47,449 643,402 625,031
Employment growth, 1994 - 2001(%) 3.4 3.3 9.5 1.7 3.4
Unemployment rate (%)(b)
  1994 6.0 4.7 4.8 6.0 8.0
  1995 5.8 4.3 4.3 5.0 7.7
  1996 6.1 4.1 4.7 5.1 7.1
  1997 5.4 4.2 4.1 4.9 7.0
  1998 3.5 3.9 3.5 4.5 6.2
  1999 3.3 3.6 3.1 4.6 6.1
  2000 2.4 4.0 3.0 4.6 6.1
  2001 3.6 5.0 3.7 4.6 6.4
Welfare caseload (c)
  1994 59,200 254,032 9,917 251,037 208,260
  1995 61,000 241,193 9,789 232,574 208,899
  1996 58,124 215,512 9,210 209,830 192,952
  1997 56,095 182,075 8,451 192,747 170,831
  1998 51,132 121,006 7,591 147,093 140,446
  1999 35,481 89,674 6,717 121,142 110,567
  2000 28,095 67,355 6,043 97,969 89,899
  2001 25,650 58,849 5,524 85,005 82,644
Change in welfare caseload, 1994 - 2001 (%) -56.7 -76.8 -44.3 -66.1 -60.3
Maximum welfare grant for a family of 3 during first month of sample intake($) 636 303 638 341 403
First month of sample intake 1/96 5/94 7/94 7/94 1/94
Sources: MDRC calculations from data collected from U.S. Department of Labor, Bureau of Labor Statistics website; U.S. Department of Health and Human Services, Administration for Children and Families website; and U.S. House of Representatives, Committee on Ways and Means, Green Books,1994-2000.
Notes:
(a): Employment totals are monthly averages, not seasonally adjusted.
(b): Unemployment rates are monthly averages, not seasonally adjusted.
(c): Welfare caseloads totals are state monthly averages.

The bottom of Table 3 reports the maximum welfare grant for a family of three in 1994. Connecticut is the most generous state, while Florida is the least generous with a maximum benefit of just $303 for a family of three.(18)

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