Studies of Welfare Populations: Data Collection and Research Issues. Weaknesses

06/01/2002

Three general concerns arise with the nationally representative surveys that keep them from being the solution, or "core" data, for understanding the effects of welfare reform. The most important issue is that sample sizes and sampling frames are such that these data cannot be used to examine certain subpopulations of interest, such as welfare recipients in a particular state (perhaps with the exception of the largest states, such as California, New York, and Texas). A distinguishing feature of welfare reform is that program responsibility now largely rests with states and even counties within a state. The nationally representative data sets do not have sample designs and sample sizes that allow analysts to examine behavior at a level that corresponds to where program decisions are being made.

Second, there appear to be systematic changes in the coverage of low-income populations in the CPS. Studies have found that AFDC and Food Stamp Program benefits and the number of recipients in the CPS have declined over time relative to estimates of participants from administrative records. This issue of coverage is a serious concern for studies that use the CPS for measuring the income of welfare populations.(8) In Table 9-2, we reproduce comparisons of aggregate AFDC/TANF and Food Stamp Benefits Program between CPS and administrative data sources from the Primus et al. (1999) study. It shows there has been a sharp decline between 1990 and 1997 in the percentage of AFDC/TANF and Food Stamp Program benefits reported in the CPS compared to amounts reported in administrative data.(9) The reduction in coverage of AFDC/TANF (or family assistance) benefits also is consistent with Roemer's (2000: Table 3b) calculations from the CPS for 1990 through 1996. Interestingly, the apparent decline in AFDC/TANF coverage does not show up in the SIPP, though the SIPP appears to capture only about three-quarters of aggregate benefits.

TABLE 9-2
AFDC/TANF and Food Stamp Aggregate Benefits Paid based on administrative data
compared to estimates from Current Population Survey (CPS) (Calendar Year), in billions of dollars
AFDC/TANF Benefits* Food Stamp Benefits
CPS Data Administrative Data Ratio (%) CPS Data Administrative Data Ratio (%)
1990 14.259 18.855 75.6 10.335 13.556 76.2
1991 15.554 20.804 74.8 12.373 16.551 74.8
1992 15.362 22.258 69.0 13.394 20.014 66.9
1993 17.540 22.307 78.6 15.010 22.253 67.5
1994 17.145 22.753 75.4 15.317 22.701 67.5
1995 15.725 21.524 73.1 14.542 22.712 64.0
1996 13.494 19.710 68.5 14.195 22.440 63.3
1997 10.004 15.893 62.9 12.274 19.570 62.7
Source: Primus et al. (1999:65) which in turn gives the sources, as HHS and USDA administrative records, CBPP tabulations of CPS data.
* Acronyms:
AFDC - Aid to Families with Dependent Children
TANF - Temporary Assistance for Needy Families
HHS - Health and Human Services
USDA - United States Department of Agriculture
CBPP - Center on Budget and Policy Priorities

Polivka (1998) compares the monthly average number of AFDC recipients in the March CPS to the monthly average reported to the Department of Health and Human Services (prior to quality control). She finds there has been a modest decrease in the proportion of total months on AFDC as measured in the CPS. The ratio of the CPS estimated to the administrative count (excluding Guam, the Virgin Islands, and Puerto Rico) is 83.0 (1989), 86.7 (1990), 86.0 (1991), 82.5 (1992), 84.2 (1993), 78.5 (1994), 75.5 (1995), and 79.6 (1996). The timing of the drop in the ratio corresponds to changes in the March CPS survey instrument. Taken together, the Primus et al. (1999) and Polivka (1998) results suggest that the decline in benefits reported in the CPS results from both a reduction in the coverage of families receiving AFDC and from an underrepresentation of benefits conditional on receipt, though the second factor seems quantitatively more important than the first.

The third potential weakness of national surveys is that there is little or no "cost" to respondents of misreporting of income, employment, or other circumstances.(10)

Some specific potential weaknesses associated with the PSID and NLSY79 are of potential relevance for obtaining information on the income and employment status of low-income populations. Most notable is the fact that they are not, by design, representative of the general population over time. Both data sets began with samples that were representative of their targeted groups--young adults in the case of the NLSY79 and the national population as of 1968 in the case of the PSID--but are not designed to be representative of the national population, or even of the age group covered in the NLSY79, in subsequent years. This feature can result in biased measures of summary statistics on income and employment vis-à-vis the nation as a whole in more recent years.

The other feature of the NLSY79 and PSID relevant for assessing the income and employment status of low-income populations is their respective sample sizes. The original sample for the NLSY79 was 12,686 young men and women, from which approximately 90 percent of the original sample remains today. The original sample in the PSID was 5,000 U.S. households in 1968 and, because of its growth through the accumulation of additional households through splitoffs from original households, it contained more than 8,700 in 1995. Although these are not small sample sizes, the sizes of low-income samples at a point in time are relatively small compared to both the CPS (which contains some 60,000 households at a point in time) and most waves of the SIPP (which, in its larger waves, contains data on 21,000 households). The sizes of the low-income or welfare subsamples in the NLSY79 and PSID for even the largest states are generally too small to derive reliable measures on income and employment, let alone other outcomes.

To summarize, there are two primary potential weaknesses with using national survey data to measure income and employment of low-income populations. They are the following:

  • Sample sizes in national surveys often are small for studies that focus on welfare or low-income populations, or that wish to examine specific targeted groups, such as current or former welfare recipients.
  • There appears to be falling coverage (of both recipients and benefits) in national surveys.

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