Status Report on Research on the Outcomes of Welfare Reform, 2001. Highlights of Findings from ASPE-Funded Leavers Studies

08/17/2001

All of the 1998 grantees and one of the 1999 grantees(1) studying welfare leavers have released reports(2) based on linked administrative data sets that tracked families who left welfare. In addition, 12 of the 15 leavers grantees have released final reports that incorporate more detailed findings based on information gathered through follow-up surveys of samples of former recipients. Highlights from these reports are presented below, with a focus on outcomes in employment and earnings, recidivism and program participation, and household income and material hardship. Despite some methodological differences in study design (and a few outliers), these reports show a surprising amount of consistency among findings across sites and different TANF programs, particularly in the areas of employment and recidivism.

  • Employment. About 60 percent of former recipients were working at any one time, with about 80 percent working at some point over the first year after exit from welfare. (Employment rates are slightly higher when based on survey data, and slightly lower according to administrative records, which do not capture all employment).

    In general, employed leavers tended to work 40 hours a week, when working, and typically earned between $6.50 and $9.00 an hour. Employment was intermittent, however, and median quarterly earnings of employed leavers ranged from $1,900 to $3,400 across the 15 studies in the first quarter after exit. Earnings rose in every location over the course of the year following exit.

  • Recidivism. In most states, between 15 and 20 percent of leavers received cash welfare benefits in the fourth quarter after exit. The proportion that ever returned to cash assistance at some point during the first 12 months after exit was higher, ranging from 17 to 38 percent.

State and local reports showed a wider range of outcomes across the studies with respect to post-exit use of Medicaid and Food Stamps.

  • Medicaid and Health Insurance. Rates of Medicaid enrollment varied across states, with enrollment among single-parent leavers in the first quarter after exit ranging from 42 to 80 percent of adults. In many areas, adult enrollment dropped 10 percentage points or more by the fourth quarter after exit. Child enrollment in Medicaid was consistently higher than adult enrollment according to both administrative and survey data.

    Only about one-fifth to one-third of leavers had employer-sponsored or other medical insurance, indicating that large numbers of leavers had no health insurance. The percentage of adult leavers without insurance ranged from 7 to 45 percent across nine states; uninsurance rates for children ranged from 8 to 33 percent.

  • Food Stamps and Other Program Participation. Between one-third and one-half of leavers received Food Stamps in the first quarter after exit in most states, although rates ranged as low as 23 percent and as high as 76 percent in a few studies. Food stamp receipt declined in some states over time, but remained constant in others.

    Among studies that collected information on leavers' receipt of other program benefits, commonly received forms of government assistance included free school lunches, the federal Earned Income Tax Credit, and housing assistance.

Although household income is difficult to measure, eight studies provided information on household income. In addition, four studies estimated poverty rates, and all 12 studies with surveys gathered information on material hardship and family well-being.

  • Household Income and Poverty Status. Average household cash income ranged from $964 to $1440 per month across eight studies. About half of this income was from the leavers' own earnings; the remainder was from various combinations of earnings of others in the household, cash assistance from Aid to Families with Dependent Children (AFDC) and/or TANF, child support payments, Supplemental Security Income (SSI), and other income.

    Estimated poverty rates of families who left welfare ranged from 41 to 58 percent, depending in part on whether food stamps were included in measures of family income. Evidence from one study suggests that leavers had lower poverty rates and higher incomes than a sample of families remaining on welfare.

  • Material Hardship and Family Well-Being. In general, many leavers experienced some hardship with respect to food, housing or medical problems after leaving welfare. For example, 13 to 52 percent of families reported some level of food shortages; 18 to 38 percent reported being behind on their rent, and 8 to 31 percent reported an inability to afford or get medical attention.

    Studies were split as to whether food and housing shortages were greater before or after exit from welfare. None of the studies reported a significant change in the use of homeless shelters before and after exit, or in experiences with separations of children from the family. When asked about overall economic well-being, between half and two-thirds of leavers in five studies reported being better off after leaving TANF than before leaving TANF.

In sum, findings across the 15 studies showed that about three-fifths of leavers were working, generally 40 hours per week. Former recipients experienced intermittent spells of unemployment and financial hardship, however, and about one-fourth to one-third returned to welfare at least once in the first year after exit in most states studied. Although quarterly earnings rose over time, total household incomes remained fairly low, averaging about $1,400 or less per month. Access to health insurance and food stamps appeared problematic for some recipients, and there also were reports of food shortages and inability to get needed medical attention. Evidence was mixed as to whether material hardships were greater before or after exit; families generally reported that they were better off overall after exit from welfare.

A more detailed synthesis of findings from ASPE-funded leavers studies is attached as Appendix B.