Studies of Welfare Populations: Data Collection and Research Issues. Summary and Conclusions

06/01/2002

This chapter has explored measures of heterogeneity of the AFDC caseload in the 1980s and early 1990s based on patterns of AFDC participation and has investigated which of those measures are predictive of labor market potential and a few other sociodemographic characteristics. The analysis shows that the single most consistent predictor of those characteristics is the total amount of time a woman has been on welfare. However, whether that time arises from a larger number of shorter spells, or a smaller number of longer spells, is less consistently important; that is, neither turnover per se nor the length of individual spells of welfare receipt is always related to labor market characteristics holding constant the total time the individual has been on welfare. Relatedly, the analysis shows that classifying recipients into two groups is a useful predictor of labor market potential: short-termers who participate in welfare only occasionally and for short periods, and all others. However, among the latter group, whether an individual is a cycler who moves on and off the rolls frequently or a long-termer who has long, uninterrupted periods of welfare receipt, is not a consistent predictor of labor market potential. Further, when it is, it appears that cyclers have lower potential than long-termers.

The finding that mobility per se matters less than expected, and that recipients with high turnover and those with low turnover (but with the same total-time-on) either look the same or differ in unexpected ways, runs contrary to the conventional model in which mobility is taken as a sign of higher-than-average labor market skill and hence earnings potential. It suggests that there must be some other reason for high rates of mobility, perhaps related to more intrinsic, possibly noneconomic, sources of instability in individuals' lives, or in administrative practices that cause churning, or related to some other factor. More investigation into this question would be a fruitful area of future research.

For welfare reform studies, the implication of the analysis is that heterogeneity is important but that its most important measure is the total time a recipient has been on welfare. This suggests that studies which estimate the impact of welfare reform should do so separately for groups with different amounts of total-time-on, and should break out short-term recipients from others. Leaver studies are one type of welfare reform research that could benefit from a separation of leaver outcomes by such characteristics.

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