Studies of Welfare Populations: Data Collection and Research Issues. Public Assistance Usage After Leaving Welfare

06/01/2002

A critical goal of welfare reform was to decrease dependency on public assistance. This section examines the use of public assistance by welfare leavers and stayers. Outcomes examined include the percentage who return to welfare and the percentage who receive food stamps and medical assistance after leaving welfare. Outcomes are stratified by past welfare receipt history and by past earnings receipt history.

Table 13-8 shows the percentage of leavers who returned to welfare by July 1997. This table also shows when, relative to leaving, the case returned to cash assistance. Overall, the majority of welfare leavers (71 percent) did not return to welfare within 16 months of leaving. A sizable proportion did not stay off welfare very long, as 20 percent returned within 6 months. Seven percent of the sample returned between 6 months and a year after leaving, and only 2 percent returned between 13 and 15 months after leaving. The percent returning to AFDC within 15 months (29 percent) is higher than what Blank and Ruggles (1994) found using national-level survey data from the late 1980s. They found that 20.5 percent returned to AFDC within 15 months of exiting. In a review of welfare leaver studies from 11 different states and counties sponsored by the Office of the Assistant Secretary for Planning and Evaluation (ASPE) of the Department of Health and Human Services (DHHS), Acs and Loprest (this volume: Chapter 12) found that between 18 to 35 percent of welfare leavers returned to TANF within a year after leaving.(8)

Table 13-8 also presents the percentage of leavers who returned to welfare by past welfare receipt history and by past earnings history. As expected, those with short receipt histories are the least likely to return to welfare in the 16 months following exit. Only 23 percent of short-termers returned to welfare compared to 33 percent of those with long-term welfare histories. Of those who cycle on and off welfare, 31 percent returned to welfare. Nearly a quarter of long-termers and about a fifth of cyclers were back on cash assistance within half a year after leaving. Only 15 percent of short-termers were back on welfare within 6 months of leaving. This table shows that there are considerable differences in the percentage of cases that return to AFDC across different welfare histories. Cancian et al. (1999) stratified the sample by the length of the case's current spell of AFDC usage, tracking receipt 2 years prior to the exit period and found small differences in AFDC return rates by the length of the current spell. Furthermore, they did not find a clear pattern between spell length and return rates. Cancian et al. (1999) also stratified return rates by the total number of months of AFDC receipt for 2 years prior to the exit period, and found that those who had received benefits for more months were more likely to return. These results are similar to results reported here.

TABLE 13-8
Percent of Leavers Who Return to Welfare by Past Welfare Receipt and Past Earnings History (N=23,207)
  Never Return Return Within 3-6 months Return Within 7-12 Months Return Within 13-15 Months
Overall 70.9 20.1 7.0 1.9
Past welfare receipt
Short-termer 76.9 15.4 5.9 1.8
Long-termer 66.5 23.8 7.7 2.1
Cycler 68.6 21.6 7.9 1.9
Past earnings receipt:
Percentage of quarters with earnings > 0 prior to leaving
Never worked 76.6 15.6 6.0 1.9
0 < x 25% 68.6 22.0 7.5 1.9
25 < x -50% 69.1 21.4 7.7 1.9
50 < x -75% 72.5 18.9 6.5 2.1
More than 75% of quarters 72.6 19.3 6.1 2.0

Differences in return to AFDC across work histories are not as large. Surprisingly, cases with no prior work experience were the most likely to stay on welfare. Seventy-seven percent of cases that never worked did not return to cash assistance after leaving. Those who worked fewer than half the quarters before leaving were the most likely to return to welfare. About 69 percent of those who worked between zero and 50 percent of the quarters stayed off welfare. Of those who worked more than half the quarters before leaving, 73 percent stayed off of welfare. The composition of the group with no prior work experience is disproportionately made up of legal immigrants, Asians, Hispanics, and those without an eligible adult in the case. Cancian et al. (1999) found that legal immigrants were significantly less likely to return to welfare. Although no explanations were offered, it is possible that this group was particularly discouraged from returning to welfare by signals encouraging the end of welfare and emphasizing work that came out with the waiver and PRWORA legislation, along with real changes in how the Food Stamps Program treated legal immigrants. Most of the cases with no eligible adults are those where the AFDC case consists only of children, but the adult in the household is either on SSI or was sanctioned from AFDC. Matched UI earnings in these cases are those of the adult, not the child in the AFDC case. The mixed composition of this group with no prior work experience as counted by UI records seems to produce other surprising outcomes across work experience as well, which we detail in the text that follows.

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