Status Report on Research on the Outcomes of Welfare Reform, 2001. Household Income and Family Well-Being

08/17/2001

Household Income and Poverty Status

Total household income is difficult to measure, particularly in leaver households. Paychecks can vary from month to month, and variations in unearned income and in household composition may generate added instability. Nevertheless, ASPE encouraged researchers to collect survey data on this critical measure of family well-being.

As shown in Table 8, average household cash income of former recipients ranged from $964 to $1440 per month across eight studies. When reported separately, median household incomes were about $200 lower. While not included in these cash income totals, food stamp benefits provided the average household with an additional $96 to $129 per month, according to three studies. (The value of the federal Earned Income Tax Credit also was not included in the cash income totals).

Six of the eight studies shown in Table 8 asked a series of detailed questions probing for income from various specific sources, while two (Illinois and the District of Columbia) simply asked for total household income. Consistent with past research, the surveys that asked multiple income-related questions uncovered higher levels of income than the other two surveys. This pattern of variation suggests that the lower incomes found in Illinois and the District of Columbia may reflect differences in income reporting rather than true differences in income.(8)

 

Table 8.
Total Household Income and Percentage of Household Income Contributed by Various Sources
(Survey Data)
Grantee & Cohort CY(Qtr) Total Cash Income:
Mean (Median)
Own Earnings Others Earnings AFDC/TANF Child Support SSI Other Income
Arizona 98(1)** $1,338 (----) 45 40 3 3 5 3
Illinois 97(2)-98(4)* $964 ($800) -- -- -- -- -- --
Iowa 99(2) $1,440 (----) 46 35 4 6 2 7
Missouri 96(4)* $1,427 ($1,166) 50 20 8 6 6 8
Washington 98(4) $1,208 ($1,000) 55 28 8 7 1 1
Cuyahoga 98(3) $1,069 (----) 63 19 6 2 5 5
D. C. 98(4)* $1,091 ($800) -- -- -- -- -- --
San Mateo 98(4) --- ($1,400) -- -- -- -- -- --
Notes: Total cash income does not include value of food stamps (average of $96 in Iowa, $100 in Cuyahoga and approximately $129 in Arizona). Income information is based on multiple survey questions about income from various sources, except in Illinois and D.C., where the survey asks one question about total household income.
* Figures are for single-parent leavers, except that figures from Illinois, Missouri and D.C. include small percentages of two-parent leavers, who generally have higher incomes.
** In Arizona, sources of income based on a sample of leavers which includes those who return to TANF after one month, as well as the traditional two-month leavers.

Five of the studies provided information about the sources of household income. Earnings were the largest income source: the leaver's own earnings made up 45 to 63 percent of total household income, while earnings of others in the household accounted for an additional 19 to 40 percent. Cash assistance from AFDC or TANF added another 3 to 8 percent. The final 9 to 20 percent of household income came from child support payments, Supplemental Security Income (SSI), and "other" income, including Social Security and survivors' benefits, veterans' benefits, workers' compensation, and financial assistance from others.

Four of the studies with comprehensive income questions also calculated the percentage of former recipients with household income below the federal poverty line. Estimated poverty rates ranged from 41 percent to 58 percent, depending in part on whether food stamps were included in measures of household income.(9) Many leavers with household incomes at or above the poverty threshold were still close to poverty; the Iowa study found that 63 percent of leavers had income below 130 percent of the poverty threshold, in Cuyahoga 79 percent were below 150 percent of poverty and in Missouri 89 percent had cash incomes below 185 percent of the poverty threshold.

Though these poverty rates are quite high, one study (Washington) reported an even higher poverty rate — 83 percent — among a sample of recipients remaining on welfare for six months. Mean and median household incomes of ongoing recipients also were lower (data are not shown, but were $890 and $642, respectively) than those of former recipients. While the Washington study does not track the same group of people over time, it provides some evidence that economic status improves after exit from welfare.

Family Well-Being and Material Hardship

Partly because of the challenges of measuring income, most leavers surveys also asked directly about family well-being and material hardships resulting from not having enough money. Although surveys varied in wording, they generally asked about hardships related to food shortages, housing problems, and medical hardship.

Between one-eighth and one-half of leavers (13 to 52 percent) of leavers reported some level of food hardship, according to the 12 studies with survey data (see Table 9). Rates of food insecurity ranged from 32 to 46 percent among the three states that measured food insecurity through a standardized six-item questionnaire. About half of these families, or 16 to 26 percent of all leaver families, were classified as food insecure with hunger.(10) Other states, while not using the six-item standardized scale, found similar evidence of food insecurity: 20 to 43 percent of respondents said that adults in the household cut the size of meals or skipped meals and 13 to 52 percent exhibited other signs of food insecurity, such as not being able to buy enough food. Very few leavers reported that children in their households skipped meals (3 to 5 percent, according to two studies).

 

Table 9.
Percentage of Leavers Reporting Food Hardships Since Exit
(and While on Welfare)
Grantee & Cohort CY(Qtr) Food insecure† Food insecure with hunger† Adults cut size of or skipped meals Children skipped meals Some other sign of food insecurity **
Iowa 99(2) 32 16 -- -- --
Massachusetts 99(1)* 43 (30) 22 (14) -- -- --
Cuyahoga 98(3) 46 26 -- -- --
Illinois 97(3)-98(4)* -- -- 25 (24) -- 44 (51)
S. C. 98(4)-99(1)*** -- -- 20 (14) -- 52
Washington 98(4)* -- -- 43 (39) 5 (4) --
D.C. 98(4)* -- -- 25 -- 46
Arizona 98(1)*** -- -- -- -- 24 (30)
Georgia 99(1)-00(1) -- -- -- -- 13 (5)
Florida 97(2) -- -- -- -- 44
Missouri 96(4)* -- -- -- 3 26
San Mateo 98(4) -- -- -- -- 32
Notes: Figures in parentheses are percentage recalling hardship while on welfare (Arizona, Illinois, Massachusetts, South Carolina) or percentage recalling hardship among a comparison group of recipients remaining on welfare (Georgia, Washington).
* Figures are for single-parent leavers, except that figures from Illinois, Massachusetts, Missouri and D.C. include small percentages of two-parent leavers.
** Other signs of food insecurity include: not able to buy enough food (Florida, Missouri); food did not last (Illinois, South Carolina, D.C.); or not enough food to eat (Arizona, Georgia, San Mateo). Other indicators of food insecurity, such as worrying about food running out, are not shown here.
*** South Carolina survey data are limited to leavers who do not return to welfare. Arizona leavers include those who returned to TANF after one month, as well as the traditional two-month leavers.
† As explained in Footnote 10, families that answer "yes" to two or more questions on a six-point scale developed by the U.S. Department of Agriculture are considered "food insecure," and those that answer "yes" to five or more questions are considered "food insecure with hunger."

Former recipients also reported problems with housing arrangements, although somewhat less frequently than food shortages. As shown in Table 10, the most common problems were falling behind in rent or mortgage (18 to 38 percent across seven studies), loss of utilities (12 to 36 percent of leavers across seven studies) and being forced to move (13 to 32 percent across four studies). Less often, former recipients were evicted (4 to 7 percent), went to a homeless shelter (1 to 7 percent, except one study reported 17 percent), or reported that their children were forced to live elsewhere (3 to 8 percent, except one study reported 19 percent).(11)

 

Table 10.
Percentage of Leavers Reporting Housing or Medical Hardships After Exit
(and While on Welfare)
Grantee & Cohort CY(Qtr) Utilities cut off Behind in rent/ mortgage Had to move because could not pay Evicted Stayed at homeless shelter Child had to live elsewhere Unable to get needed medical care
Arizona 98(1)*** 12 (18) 37 (41) 17 (21) -- 3 (4) 8 (9) 24 (14)
Georgia 99(1)-00(1) 12 18 -- 4 -- -- 10
Florida 97(2) 36 -- 32 -- 17**** 19**** --
Illinois 97(3)-98(4)* 14 (26) 38 (45) 13 (15) -- 3 (4) 8 (9) 31 (26)
Iowa 99(2) -- 25 -- -- 7 -- --
Massachusetts 99(1)* 26 (20) -- -- -- 2 (1) 3 (1) --
Missouri 96(4)* -- 26 -- -- -- -- --
S. C. 98(4)-99(1)*** -- 33 -- -- 2 (3) 5 (5) 10 (4)
Washington 98(4) 12 (12) -- -- 7 (3) 1 (2) 3 (2) --
D.C. 98(4)* -- 27 (27) -- -- 3 (5) 5 (6) 8 (3)
Cuyahoga 98(3) 19 -- 26 ** ** -- 10
Notes: Figures in parentheses are percentage recalling hardship while on welfare (Arizona, Illinois, Massachusetts, South Carolina, D.C.) or percentage recalling hardship among a comparison group of recipients remaining on welfare (Washington).
* Figures are for single-parent leavers, except that figures from Illinois, Massachusetts, Missouri and D.C. include small percentages of two-parent leavers.
** In Cuyahoga, 7 percent were either evicted or lived in homeless shelter.
*** South Carolina survey data are limited to leavers who do not return to welfare. Arizona leavers include those who returned to TANF after one month, as well as the traditional two-month leavers.
**** The findings from Florida should be viewed with caution, because figures were imputed for the 77 percent of the sample that could not be located by telephone. The raw, unadjusted percentages, reported in an appendix to their final report, were closer to those reported by other states (4 percent homeless and 8 percent with children living elsewhere).

Studies were split as to whether housing and food shortages were greater before or after exit; some found more hardship after exit, some found less hardship after exit, and some showed little difference. None of the leavers studies reported a significant change in use of homeless shelters before and after exit, or in experiences with separations of children from the family.

Six studies also examined medical hardship, and found that between 8 percent and 31 percent of leavers in the six sites reported that they or someone in their household was unable to get needed medical attention since leaving welfare because they could not afford it. Studies consistently reported more difficulty getting needed medical care after exit than while on welfare.

Finally, when directly asked about overall economic well-being or standard of living, 46 to 68 percent of families in five states reported they were better off financially after exit; 16 to 32 percent said they were the same, and 13 to 30 percent said they were worse off (see Table 11).

 

Table 11.
Overall Economic Well-being Before and After Leaving Welfare
(Survey Data)
Grantee & Cohort CY(Qtr) Better Off Same Worse Off
Arizona 98(1)** 68 16 15
Illinois 97(3)-98(4)* 57 30 13
Iowa 99(2) 49 32 19
Massachusetts 99(1)* 46 24 30
Washington 98(4) 60 19 21
* Figures are for single-parent leavers, except that figures from Illinois and Massachusetts include small percentages of two-parent leavers.
** Arizona leavers include those who returned to TANF after one month, as well as the traditional two-month leavers.