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

11/14/2002

Each of the studies contains information on the demographic characteristics of applicants in the study area, including their age, race/ethnicity, educational attainment, marital status, and the number of children in the household. These characteristics varied greatly across the study areas, and no conclusions can be made regarding the effects of varying demographic characteristics on outcomes for applicants. However, the information is useful for descriptive purposes.

  • The majority of case heads were in the 18-35 age range. However, some studies had a significant number of older applicants (24 percent over age 35 in Contra Costa County, 19 percent over age 35 in Arizona, and 24 percent over age 40 in South Carolina).
  • The race/ethnicity of the applicant population varied along with the natural demographics of each of the various study areas. The percentage of applicants/divertees who were African-American ranged from 6 percent in Arizona to 76 percent in Milwaukee County, while the percentage of Latino/Hispanic applicants ranged from 11 percent in Milwaukee County to 50 percent in Contra Costa County. The percentage of TANF applicants who were white ranged from 10 percent in Milwaukee County to 51 percent in Arizona.
  • A few of the grantees collected information on the educational attainment of the primary caretaker of the applicant unit. These grantees found that between 37 and 58 percent of the TANF applicants/divertees had less than a high school education, while 34 to 54 percent had either a high school diploma or General Equivalency Degree (GED).
  • In the few areas that collected data on marital status of the applicants, the largest percentage of respondents (44 to 80 percent) were never-married single parents. In addition, a significant percentage of respondents were divorced or separated. Fewer than one-fifth of the applicants were married at the time of the surveys.
  • Most of the studies asked the respondents about the number of dependent children living in the household. In each study area, between one-third and one-half of respondents had only one children living in the household. The percentage of applicants with three or more children in the household ranged from 18 percent in South Carolina to 38 percent in Milwaukee County.

Employment and Earnings

Each of the grantees reported findings on the employment rates of applicants and divertees in the period preceding and following their application for TANF. Most of the studies included both administrative data from the Unemployment Insurance (UI) data system and the results of survey questions about the employment of applicants. In general, the data show either a steady employment rate or slight decline in employment during the period just prior to application, then a small but constant increase in employment in the months following diversion from TANF.

Grantees also used both UI administrative data and survey data to report on the earnings of TANF applicants. In general, there was a significant dip in earnings in the period immediately prior to application/diversion. This drop is very likely associated with applicants' decision to apply for TANF. The period in which the application/diversion took place was followed by a noticeable increase in earnings over the following year.

  • Three of the grantees reporting administrative data on employment in the quarter of application to or diversion from TANF report rates similar to those of the ASPE "leavers" studies - around 60 percent. Three report somewhat lower employment rates of between 31 and 45 percent. Some possible reasons for the differences in employment rates include policy differences within the individual states, difference in the definition of diversion, and varying definitions of the quarter of exit.
  • Grantees reporting survey data found slightly lower employment rates, particularly at the time of application. For example, 12 percent of respondents to a survey at the time of application in Milwaukee County said that they were currently employed, while 28 percent in Arizona reported being employed in a similar survey. One explanation for the lower employment rates from survey data might be that administrative data report employment at any time within a quarter, and the surveys show employment at one point in time. Thus, an individual might lose her job and choose to apply for TANF, but still be recorded by administrative data as employed in that quarter.
  • As mentioned above, employment rates generally increased in the period following diversion from TANF, according to both administrative and survey data. Administrative data showed a steady but small increase (less than 5 percentage points) in employment across most grantees in the year following diversion. The exception was Florida, where the increase in the employment rate between the study quarter and 15 months after diversion was 14 percentage points (from 38 percent to 52 percent). Increases in employment were also shown in survey data findings reported in Arizona, Illinois, and San Mateo County.
  • Administrative data from each of the studies showed a sudden drop in applicants' earnings in the quarter of TANF application, followed by a steady gain in earnings over the year following diversion. Mean earnings in the quarter before application ranged from about $1,800 to $2,500 in the non-California areas - this range fell to about $1,500 to $2,000 in the application quarter. Earnings then steadily increased over the next year; in the fourth quarter after application, the range of earnings was approximately $2,200 to $3,000. Earnings in the five counties in California were higher than those in the other study areas, possibly due to higher standards of living in the Bay Area of California. (1)
  • Of those TANF applicants who were employed in the period following application/diversion, many worked in the service or clerical field . Median hourly earnings varied greatly across studies but generally were above the minimum wage. Those individuals who were not employed generally cited illness or injury, child care, or a preference to stay home with the child as a major reason for their unemployment.

Participation in Medicaid and Food Stamps

Government programs such as Medicaid and food stamps are important supports for low-income families not receiving cash assistance as they move toward self-sufficiency. Each of the ASPE grantees studying TANF applicants and diversion collected administrative and survey data on the receipt of these programs. While the level to which applicants were enrolled in these programs varied across the different sites, the data show that program receipt declined across each of the study areas in the year following TANF application/diversion.

  • State administrative data from five of the applicant studies reveal that between 15 and 35 percent of the population receive food stamps in the first quarter after application for TANF. In three of the study areas, receipt of food stamps fell gradually over the next three quarters. (2)
  • Survey data from the two California studies show a decline in food stamp receipt between surveys administered at six and twelve months after diversion. However, Illinois survey data show an increase in receipt of food stamps between the time of application and the administration of the survey six to nine months later (from 49 to 66 percent).
  • Five applicant studies used administrative data to determine the number of TANF applicants and divertees enrolled in the Medicaid program. Medicaid enrollment among family heads in the fourth quarter following application/diversion ranged from 23 percent to 56 percent. South Carolina was the only site in which more than half of the applicants received Medicaid in any one of the four quarters following their application.
  • Survey data collected by a few of the grantees also showed varying levels of enrollment in the Medicaid program. Twelve months after diversion from TANF, 41 percent of those interviewed in Contra Costa County were receiving Medicaid benefits, compared to 55 percent of respondents in Arizona.
  • Researchers in Milwaukee County, Wisconsin interviewed individuals at the time they applied to the TANF program. They found that 61 percent of the applicants surveyed were receiving food stamps in the month prior to applying for TANF, while 77 percent of the respondents were enrolled in Medicaid in the preceding month.

Returns to TANF

While those applicants who are diverted do not, by definition, receive TANF at the time of application, many eventually reapply for TANF and receive cash assistance. In fact, those studies that also followed TANF entrants show that equal numbers of those who were originally diverted from TANF cash assistance and those who entered the program in the application quarter are receiving TANF cash assistance at 12 months after the study quarter.

  • The six studies that used information from their state or county's TANF administrative data base to report findings in the area of TANF recidivism had a wide range of findings. The percentage of applicants or divertees who were receiving TANF three months after applying and being diverted from the program varied from 22 percent in Contra Costa County to virtually none in South Carolina. A reason for this discrepancy might be South Carolina's definition of their diverted population, described above.
  • Three studies asked applicants/divertees about receipt of TANF in their surveys. At twelve months after diversion from the cash assistance rolls, receipt of TANF ranged from 13 percent to 36 percent.

Experience with the TANF Application Process

Participants in four of the studies - Arizona, Illinois, South Carolina, and Contra Costa County - reported findings about applicants' experiences with the TANF application process in their state or county. As these questions were all asked in a slightly different way, it is difficult to synthesize these findings across the studies.

  • Both Arizona and Contra Costa County were able to discern from administrative data the reasons for denial of TANF application among so-called "diverted" applicants. In both locations, nearly half of the applications were denied because of a failure to complete the interview process. Other reasons included a failure to comply with program rules or a voluntary withdrawal of the application by the applicant herself.
  • Contra Costa County compared its administrative data on the reason for denial with the results of a survey question in which applicants were asked to give the reason they thought their application was denied. Two out of five respondents said their application was denied due to "administrative hassles", while another 19 percent listed employment as the reason for not finishing the application process.
  • Arizona found that, among diverted applicants, 39 percent did not complete the application process because of issues related to income, such as finding a job or making too much money. However, 32 percent of respondents cited issues related to the application process (too many hassles or having to provide too much documentation) as the major reason they did not complete the process.
  • In Illinois, 20 percent of those respondents whose applications were denied or who withdrew their applicants felt that they did not go onto TANF because they had too much income or assets, while another 19 percent did not provide the paperwork that was required. The majority of these individuals reported receiving job search and job assistance services while their application was being considered.
  • South Carolina asked those who were receiving food stamps and were income-eligible for TANF, but not receiving TANF, why they had not gone on welfare. The majority of this population - 59 percent - said that they only wanted food stamps and did not want to be on welfare. An additional 16 percent said they did not know that people could get cash assistance, while another 12 percent said they had not applied for TANF because they did not think they would be eligible.

Overall, the population of TANF applicants and divertees is difficult to define, and thus a hard population for whom to determine outcomes. However, some generalizations can be made across the ASPE-funded studies of TANF applicants and diversion. First, there appears to be a significant dip in earnings just prior to application to TANF - this dip and the decision to apply for TANF might be related somewhat. The drop in the employment rate during this time is much less pronounced than the dip in earnings. In addition, there is moderate use of food stamps and Medicaid among this population, decreasing gradually in the year following the application to or diversion from TANF. Finally, a fair number of application reapply for TANF and eventually receive cash assistance in the year following the initial diversion.

 

Table 1:
Definitions of Applicant/Diversion Populations Studied by ASPE Grantees Included in this Synthesis
Study population Arizona Florida Illinois South Carolina Texas Milwaukee Co. Contra Costa Co. San Mateo Co. Total

Formally diverted

        X       1

Failed to complete application

X   X   X X X X 6

Completed but not enrolled

      X   X X X 4

Ineligible for non-financial reasons

    X   X X X X 5

Appear to be eligible

  X   X         2