Table 14-3 shows information from a classification of the population into the three groups discussed earlier--long-termers, short-termers, and cyclers. In all cases cyclers are defined as those with three or more spells. Any other cutoff would include either a much larger fraction of the sample in the cycler category or a much smaller fraction (see Figure 14-2 and Table 14-A2). Long-termers and short-termers are those with one or two spells, and with average spell lengths of half a year, a year, or a year and a half in length, depending on the definition.(22)
|Definition 1(a)||Definition 2(b)||Definition 3(c)|
a Definition 1: a=2 spells, b=6 months.
b Definition 2: a=2 spells, b=12 months.
c Definition 3: a=2 spells, b=18 months.
These classifications result in approximately one-fifth of the ever-on population assigned as cyclers, and more than one-third assigned to long-term status (from one-third to as high as 57 percent). Short-termers end up with a representation slightly above or slightly below one-third. Thus the division is not quite equal across the three groups, but deviates from an equal division only through a somewhat greater-than-one-third long-termer group and smaller-than-one-third cycler group. The percent of the population classified as long-termers may seem high, even for the 1.5-year spell definition, where more than one-third of ever-on recipients are so classified.(23) However, it should be noted that there have been no previous calculations of these distributions in the literature, and hence it is difficult to find comparisons in past work.(24)Still, a smaller fraction of long-termers clearly could be obtained by requiring longer average spell lengths than 1.5 years, but at the cost of including as short-termers those with such long average spell lengths; and a 1.5-year spell does not seem to fit the notion of a short-termer. These issues illustrate the problems with constraining the classification to only three categories, and there is clearly some arbitrariness involved in where to draw the various lines.
Figure 14-5 shows the distribution of T for each of the three groups, using Definition 2.(25) Short-termers are concentrated among the lowest values of total-time-on, as expected. However, the distributions for long-termers and cyclers are more mixed. Although long-termers are more commonly observed to have very long total-time-on (e.g., 21 percent have more than 6 years of receipt in the 10-year period), cyclers are more likely to have total-time-on in the 3-to-5 year range. The differences are greater for Definition 3, that which defines long-termers as having longer average spells, where 37 percent have T greater than 6 years and 40 percent have T in the 3-to-5 year range (see Table 14-A4). However, despite these differences in the tails of the distribution, the median T is 56 months for cyclers and only 52 months for long-termers using Definition 2. The lower median T for long-termers reflects the fact that many long-termers by this type of definition have only a single spell that is below average in length and hence are on welfare for a shorter period in total than many cyclers, who, with three spells at minimum, commonly build up more total-time-on. However, for Definition 3, the median T for long-termers is 60 months, longer than that of cyclers. Still, the most appropriate conclusion from these calculations is that the typical experience of long-termers and cyclers in terms of total-time-on is not greatly different. Long-termers include more women with long total-time-on and more women with shorter total-time-on than cyclers, but on average they are not far different.(26)
Table 14-4 shows the characteristics of the three groups using Definition 2. As expected, short-termers are better off than long-termers and all cyclers in virtually every dimension. However, the table reveals that cyclers are also worse off than long-termers in nearly every labor market potential as well. Although the educational and racial distributions are approximately the same, and while employment rates off AFDC for long-termers are indeed somewhat lower than those for cyclers, cyclers have lower annual earnings, weekly earnings, and hourly wages than long-termers. This result is quite surprising in light of the conventional wisdom in the literature based on the model discussed earlier in the paper, which assumes that cyclers are somewhat better off than long-termers by virtue of having sufficiently greater earning power to leave the welfare rolls periodically to enter the labor market. A major conclusion of this chapter is the rejection of that model.
|Long- termers||Short- termers||Cyclers(a)|
|All||Low T||High T|
|Employment rate off AFDC||0.59||0.75||0.65||0.70||0.60|
|Average annual earnings off AFDC (including zeroes)||$4,976||$6,715||$3,512||$4,273||$2,407|
|Average annual earnings off AFDC (excluding zeroes)||$5,574||$7,055||$4,307||$4,671||$3,416|
|Average weekly earnings (excluding zeroes)||$192||$20||$157||$174||$125|
|Average hourly wage (workers only)||$5.66||$5.80||$4.34||$4.81||$3.45|
|Notes: Monetary figures are in real 1992 dollars.Definition 2 used.
a Low T = 55 months total-time-on or less; High T = 56 months total-time-on or more.
Because the cycler definition used here does not require T to be large (although, as noted, median T is about the same for cyclers and long-termers), the last two columns of Table 14-4 show the characteristics of cyclers with low T and high T.(27) Even the "better off" women among the cyclers--those with lower values of T--are substantially worse off than long-termers in earnings and wages. Hourly wages of these cyclers are $4.81 compared to $5.66 for long-termers, with similarly sized differences for unconditional earnings, conditional earnings, and weekly wages. In addition, the "worse off" cyclers are even worse off compared to long-termers than was true on average, necessarily. These results do not provide any evidence that there is a significantly better off subgroup of cyclers that is distorting their average representation. Instead, it appears that cyclers, like long-termers or perhaps even more than long-termers, are generally a very disadvantaged group as a whole.
Using Definition 3 instead of Definition 2, which applies a more stringent definition of long-termer, results in worsened characteristics of long-termers and hence a smaller gap between that group and cyclers. For example, mean wages of long-termers under Definition 3 are $5.31 and weekly earnings are $182. An even more stringent definition that included only long-termers with extremely long spells would no doubt result in worsened outcomes. Nevertheless, the same is true of cyclers, as already illustrated in the last column of Table 14-4. Moreover, even though the minimum spell length for long-termers used in Definitions 1, 2, and 3 is not large, the median and mean spell lengths are still in the range of 2- to- 4 years (see Table 14-A4); so long-termers by these definitions typically indeed have very long spells. For all these reasons, it does not appear that any reasonable definition is likely to change the direction of differences in characteristics between long-termers and cyclers that has been found here.(28)
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