Status Report on Research on the Outcomes of Welfare Reform, 2002. Background


In its report for the FY 2002 Appropriation for the Department of Health and Human Services, the Conference Committee stipulated for the fifth year that research within the Office of the Secretary should be dedicated to study the outcomes of welfare reform:

"Within the funds available, $7,125,000 is to continue to study of the outcomes of welfare reform and to assess the impacts of policy changes on the low-income population. The conferees recommend that this effort include the collection and use of state-specific surveys, state and federal administration data, and data administratively linking the National Directory of New Hires, other child support enforcement data, TANF and Medicaid records together. These studies should focus on assessing the well-being of the low income population, developing and reporting reliable and comparable state-by-state measures of family hardship and well-being, the utilization of other support programs and the impact of child support enforcement efforts. These studies should continue to measure outcomes for a broad population of current, former and potential welfare recipients, as well as other special populations affected by state TANF policies. The conferees further expect these studies to analyze how the earnings of custodial and non-custodial parents who are, or have had children who are, current or former welfare recipients have changed over time and whether the pattern is significantly different among states. The conferees request a report on these topics to be submitted to the House and Senate Appropriations Committees by May 1, 2002." (H. Rept. 107-342, pages 115-116)

The following report has been prepared by the Office of the Secretary, Office of the Assistant Secretary for Planning and Evaluation (ASPE), in response to the requirement for a report. Unless otherwise noted, this report discusses only the welfare outcomes research agenda supported by the targeted funding. No attempt has been made to reflect the separately funded welfare research agenda of the Department's Administration for Children and Families (ACF) (1) or ASPE's or the Department's health research agenda, except to the extent that some projects were supported jointly by welfare outcomes funding and funds from other sources.

The Personal Responsibility and Work Opportunity Reconciliation Act (PRWORA) of 1996 was a landmark event in our nation's welfare policy. The results of the reforms, based on a number of popular measures, have been dramatic. The number of families receiving Temporary Assistance for Needy Families (TANF) program cash benefits has declined substantially, marking the first-ever rapid caseload decline during an expanding economy. Employment among current and former welfare recipients has increased significantly, with the number of working recipients reaching all-time highs in fiscal years 1999 and 2000. In addition, the majority of mothers leaving welfare are employed after leaving. Earnings for welfare recipients continuing to receive cash assistance, and earnings for female-headed households in general, also have increased significantly. In addition, the child poverty rate continued to decline between 1996 and 2000, falling to its lowest rate in over 20 years.

Despite these gains, there is much to be done as we move to the next phase of welfare reform. States have had mixed success in fully engaging welfare recipients in work activities. While all states have met the overall work participation rates required by law, in 2000, in an average month, only about one-third of all families with an adult participated in work activities that were countable toward the state's participation rate. Substantial progress has been made nationwide in reducing teen births, but the proportion of births occurring outside of marriage remains relatively stable. Child poverty rates for African American and Hispanic children have also fallen dramatically during the past six years, although their poverty rates are still more than three times the rate for white, non-Hispanic children.

In addition, much remains to be learned as we move to the next phase of welfare reform. As a direct result of the dedication of research funds to study the outcomes of welfare reform, ASPE has contributed significantly to the scope, volume, and diversity of welfare reform research within the Department. "Welfare Outcomes" funding has enabled ASPE to sponsor or conduct a great number of studies designed to document trends in the low-income population (including both adults and children) as well as in the welfare recipient population. Our research agenda has also supported efforts to build state data capacity and data comparability through our support of monitoring studies, such as studies of families leaving welfare. Nonetheless, in its final report, the Panel on Data and Methods for Measuring the Effects of Changes in Social Welfare Programs convened by the National Research Council's Committee on National Statistics has identified some important data gaps and offered some conclusions and recommendations designed to build up the "science base" of welfare reform research. These are discussed in more detail in the Future Directions section later in this chapter.