Studies of Welfare Populations: Data Collection and Research Issues. Cases With Multiple Barriers to Self-Sufficiency

06/01/2002

In an attempt to estimate a lower bound on the outcomes of leavers, AFDC recipients that may face the most barriers to self-sufficiency were identified and their employment, earnings, and public assistance usage after leaving welfare were examined. High-barrier cases were identified by their education level, amount of time spent on welfare prior to the exit period, presence of young children, and employment experience prior to the exit period.(14) A case was classified as a "high-barrier" case if all of the following conditions applied: (1) no high school diploma; (2) presence of at least one child under the age of 5; (3) received welfare for more than 48 months in the period between July 1989 and July 1995; and (4) worked fewer than four quarters between January 1989 and July 1995. Of the total of 48,216 cases, 1,226 cases (or 2.5 percent) met each of these conditions and were classified as "high-barrier" cases. Of these 1,226 cases, only 307, or 25.1 percent, left welfare. This is in comparison to 48 percent of the entire caseload. Nearly 15 percent of high-barrier leavers were sanctioned from AFDC compared to 8 percent of all other leavers.(15)Table 13  17 shows the outcomes of those classified as high-barrier cases who left welfare and compares these outcomes to all other leavers. If these high-barrier cases are truly those who face the most barriers to self-sufficiency, then examining their outcomes can give us a sense of how bad the outcomes of some leavers may be, or in other words, a lower bound on outcomes of leavers.

TABLE 13-17
A Comparison of Leavers With Multiple Barriers to All Other Leavers
Outcomes High-Barrier Leavers(a) All Other Leavers
Total number of leavers 307 22,900
Percent of sample who are leavers 25.1(b) 48.7(c)
Percent of leavers who were sanctioned 14.7 7.8
Number of quarters received AFDC after leaving    
0 56.7 70.8
1-2 13.4 13.9
3-4 18.2 11.0
4+ 11.7 4.4
Percent not receiving AFDC, food stamps, or medical assistance in the 1st quarter after exit 18.2 22.2
Percent not receiving AFDC, food stamps, or medical assistance in the 5th quarter after exit 30.3 43.4
Percent who ever received food stamps after leaving 80.5 70.7
Mean number of months received food stamps after leaving 9.7 7.0
# of quarters worked after leaving
0 40.7 23.1
1-2 20.5 13.6
3-4 15.3 19.3
4+ 23.5 44.0
Quarterly earnings over first year after exit (including quarters without earnings)
Mean 819.7 1,653.8
Median 137.3 1,329.2
Quarterly earnings over first year after exit (excluding quarters without earnings)
Mean 1,735.3 2,393.2
Median 1,593.5 2,235.2
Quarterly income from earnings, AFDC, and food stamps in the first year after exit
Mean 1,523.2 2,010.0
Median 1,351.1 1,874.0
a High-barrier cases are those who, as of July, 1995: did not have a high school diploma, had at least one child under the age of 5, had received AFDC for more than 4 years between July 1989 and July 1995, and had worked four or fewer quarters between January 1989 and July 1989.
b Percent of all cases designated "high-barrier cases" who left AFDC.
c Percent of all cases not designated "high-barrier cases" who left AFDC.

The first five rows examine public assistance usage for leavers. In general, the high-barrier cases have higher levels of public assistance usage than all other leavers. For some public assistance receipt outcomes, the difference between high-barrier leavers and all other leavers are sizable. However, for most outcomes, the differences are not as bad as one might expect. The high-barrier leavers were much more likely to return to AFDC than all other leavers. Forty-three percent of high-barrier leavers returned to welfare after leaving compared to only 29 percent of all other leavers. This is a sizable difference of about 48 percent. About 20 percent of the worst off leavers received AFDC for three or more quarters after leaving. However, fewer than half of these high-barrier cases returned to AFDC in the exit period. This result is a favorable indicator in that even among the worst off cases, dependency on cash assistance decreased during this period.

However, this group of high-barrier cases still received public assistance from either food stamps, AFDC, or Medicaid. In the first quarter after exit, only 18 percent of high-barrier leavers did not receive public assistance. In the fifth quarter after exit, this grew to 30 percent. In both the first and fifth quarters, the percentage of high-barrier cases not receiving assistance was 13 percentage points lower than the percentage of all other leavers.

Food stamp usage after leaving is very high for the high-barrier cases. Eighty-one percent received food stamps for at least 1 month after leaving. This is, however, not greatly different from the percentage of all other leavers who received food stamps after leaving, which was 71 percent. High-barrier leavers received food stamps, on average, for nearly 3 more months than all other leavers (9.7 months compared to 7.0 months).

The employment and earnings status of high-barrier leavers is not as encouraging. Nearly 41 percent of high-barrier leavers did not have earnings in the quarters following the exit period. This is relative to only 23 percent of all other leavers who did not have earnings during the postexit period. In general, the high-barrier leavers worked fewer quarters than all other leavers. Twenty-one percent of high-barrier leavers worked only one or two quarters after leaving compared to only 14 percent for all other leavers. On the other hand, although 63 percent of all other leavers worked at least three quarters after leaving welfare, only 38 percent of the high-barrier leavers did.

The earnings and incomes of high-barrier leavers are substantially lower than those of all other leavers. Mean quarterly earnings in the year following exit for high-barrier leavers (including quarters in which the case did not work) were $820 and median quarterly earnings were $137. For all other leavers, mean quarterly earnings were $1,654 and median quarterly earnings were $1,329. Excluding quarters in which a case did not work, the mean quarterly earnings of high-barrier leavers are $1,735 and the median quarterly earnings are $1,593. This median translates into annual earnings of $6,372.

Mean and median total income from earnings, AFDC, and food stamps are also reported. Results show that combined income from public assistance and earnings of high-barrier leavers is not too low relative to all other leavers, but is still much below the poverty line. The mean income of high-barrier leavers in the first year after exit is $1,523 and the median is $1,351. This is relative to a mean of $2,010 for all other leavers and a median of $1,874. Annualized, these medians translate into $5,404 for high-barrier leavers and $7,496 for all other leavers.

Overall, the low earnings and employment rates of the group of high-barrier leavers are certainly of concern. However, this group is not, at least relative to all other leavers, extraordinarily different in terms of public assistance usage after leaving. In fact, most do not return to AFDC over the year to 2 years for which we observe them after leaving. It is important to note that these results are for welfare leavers and that 75 percent of high-barrier cases did not leave welfare. The outcomes of these high-barrier stayers are probably worse than the outcomes of high-barrier leavers .

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