Status of Research on the Outcomes of Welfare Reform, 2000. Highlights of Research Findings

12/01/2000

A substantial proportion of our FY 1998 and 1999 welfare outcomes funding went to partnering with states and counties through grants to study the experiences of people who left the TANF program ("leavers") or were diverted from welfare. While most of the studies funded with the targeted Policy Research funds are still on-going projects, including the state/county grants examining families who have been diverted from welfare, interim findings are available from many of the ASPE-funded grantees studying leavers and a few other long-term projects.

Most of the leavers grantees have released interim reports based on linked administrative data sets that tracked families who left welfare, and several grantees also have already released final reports with findings based on information gathered through surveys. These reports show that, despite some outliers, there is a surprising amount of consistency among findings across the studies overall with respect to employment, hours worked and earnings, income and poverty and returns to TANF. There is much less consistency with respect to the use of Medicaid and Food Stamps. Although many such studies exist, comparisons across studies beyond the ASPE-funded studies are somewhat problematic because of the many differences in study populations, time periods studied, sources of data, and research methodologies. Final reports, with more detailed findings, are expected by the Summer of 2001.

Notwithstanding differences in studies, findings from the state/local leavers studies are quite consistent, particularly in the areas of employment and recidivism.

  • Employment. Administrative data indicate that about 55 percent of former TANF recipients (ranging from 46 to 64 percent across 11 studies) are working each quarter after exit from welfare. Over the 12-month period, some former recipients lost their jobs, while others found new employment, resulting in cumulative employment rates of approximately 80 percent, measured as those who were ever employed within the first 12 months of exit. The remaining 20 percent never worked during the year after exit.

    Self-reported survey data from five reports suggest somewhat higher rates of employment, both at time of interview (57 to 65 percent) and over the first year since exit (85 to 90 percent).

    In general, employed leavers tend to work full time and earn between $7 and $8 an hour. Quarterly mean earnings of employed leavers ranged from close to $2,200 to over $3,400 across ten studies in the first quarter after exit, with earnings rising steadily in every location over the course of the year following exit. Household income information (not including the Earned Income Tax Credit) from a few states suggests that over half of all leavers are "poor" (having total incomes below the official poverty threshold, which was $13,003 for a family of three in 1998).

  • Recidivism. In general, about one in six leavers (ranging from 8 to 19 percent) are receiving TANF in the fourth quarter after exit. The proportion that ever returned to cash assistance at some point during the first 12 months after exit is higher, ranging from 18 to 35 percent.

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

  • Food Stamps. Between one-third and one-half of leavers receive Food Stamps in the first quarter after exit in most states, although participation by single-parent leavers was as low as 9 percent in one county. When measured over time, three of eight states show participation declines of ten percentage points or more. The other states report relatively flat participation rates.
  • Medicaid. Rates of Medicaid enrollment vary considerably across states, with enrollment among single-parent leavers in the first quarter after exit ranging from 26 to 57 percent of adults. In studies reporting rates for both adults and children, slightly more children than adults (28 percent of children compared to 26 percent of adults in one study, and 62 percent of children and 55 percent of adults in another) are enrolled in Medicaid. Half the states show a decline in Medicaid participation over time of ten percentage points or more. Similar to Food Stamps, other states show flatter participation rates over time.

The five studies that have completed analysis of their survey data all include an analysis of the hardships experienced by former recipients and their families. In general, many leavers experience some hardship with respect to food, housing or medical problems after leaving welfare. For example, 24 to 44 percent of families report not having enough food six months after exit; 27 to 39 percent report being behind on their rent, and 8 to 31 percent report an inability to afford or get medical attention. Interestingly, hardships are reported at about the same rate for TANF participants as TANF leavers. Overall, approximately 60 percent of leavers report being better off after leaving TANF than before leaving TANF.

In addition, a number of entities have undertaken non-ASPE-funded projects to monitor the effects of pre- and post-welfare reform initiatives. Appendix L of the 2000 Green Book: Background Material and Data on Programs Within the Jurisdiction of the Committee on Ways and Means summarizes findings from primarily pre-PRWORA welfare programs and pilot projects that have tested numerous state and local welfare reform initiatives. These studies vary substantially in terms of study design, cohorts, administrative data linkages, research topics, and response rates. Finding from impact studies are included as well as findings from leavers studies. The 2000 Green Book can be found at http://waysmeans.house.gov/publica.htm.

Some additional ASPE studies, supported in whole or in part by the targeted Policy Research funds, have been completed. Interim findings are also available from some other long-term projects. For example:

  • Child-only cases. A study of child-only cases found that in 1999, 29 percent of TANF cases were child-only families in which only children received the benefits. Of those, about 40 percent consisted of children living with adult relatives who are not their parents, while parents were in the household in the remaining 60 percent of the cases, but they were ineligible for benefits for reasons such as sanctions, immigration status, or receipt of Supplemental Security Income (SSI) benefits.
  • Immigrants. Three reports have been released to date from a study of welfare reform and the health and economic status of immigrants. One report found that the cash assistance and Medicaid approval rates declined by half for legal non-citizen families in Los Angeles between 1996 and 1998, with no corresponding decrease for citizen families. In addition, the cash assistance and Medicaid application rates for citizen children with non-citizen parents fell by almost half during the same period, while applications for children with citizen parents increased slightly. Another report found that welfare and immigration reform had more of a "chilling effect" on non-citizen use of cash assistance, Medicaid and Food Stamps than actual program eligibility changes. For example, between 1994 and 1997, a period when few legal immigrants would have been affected by benefit restrictions, the rate of decline within non-citizen households was more than double the rate of decline within citizen households. Finally, the third report found that one in ten children in America live in families where at least one parent is a non-citizen and one or more children are U.S. citizens, and that more children living in mixed status families have no health insurance when compared to all-citizen families.
  • Representativeness of ASPE grantees. A study comparing ASPE grantee states to the nation as a whole found that the grantee states capture a diverse cross section of the U.S. experience, and that findings from these studies are helpful in representing the range of potential outcomes associated with welfare reform, although findings for the nation as a whole may differ in some dimension from findings in grantee states.
  • Interim guidance from the National Academy of Sciences. The National Academy of Sciences Panel Study n Welfare Outcomes released its Interim Report providing guidance to the Department on welfare reform research and evaluation strategies. The short-run recommendations offered by the panel are consistent with the Department's research on welfare reform, and the report acknowledged that the Department is already taking most of the recommended steps.

The remainder of this chapter provides project-by-project summaries of the available results and findings from all outcomes-funded projects, including details on those studies highlighted above.