PRWORA afforded states flexibility in providing assistance to low-income families with children but mandated that a high percentage of these families be involved in work or work-related activities. In fact, Congress specified a minimum state participation rate for all TANF families and another minimum rate for two-parent families. Congress also specified the types of activities in which families must participate and the minimum number of hours of participation per week that count toward the state rate.
Specifically, adults in single-parent families must participate for a minimum of 30 hours per week, 20 of which must be devoted to at least one of nine core activities: unsubsidized employment, subsidized employment, subsidized public sector employment, work experience, on-the-job training, job search and job readiness assistance, community service programs, vocational education training, or providing child care for a community service participant. The remaining 10 hours can be devoted to three other activities: job skills training directly related to employment, education directly related to employment (for high school dropouts only), or satisfactory attendance in secondary school or the equivalent (for high school dropouts only). Adults in two-parent families must participate for a combined minimum of 35 hours per week, 30 of which must be devoted to any of the nine core activities and the remaining 5 hours to any of the other three activities.
When TANF began in 1997, Congress set the minimum work participation rate at 25 percent for all families and 75 percent for two-parent families. For each subsequent year through 2002, Congress steadily raised the rate until it reached 50 percent for all families and 90 percent for two-parent families. However, for each percentage point that a state's average monthly caseload drops below its average monthly caseload for fiscal year 1995, the minimum participation rate is reduced by one percentage point.(1) States report data necessary to calculate their participation rate to the federal government each quarter. In fiscal year 2002, the most recent year for which participation data are available nationwide, almost all states met the federal participation requirements, in many cases because the caseload reduction credit lowered the minimum rate to considerably below 50 and 90 percent. Nevertheless, actual rates at which TANF families participated in federally countable activities varied substantially by state, ranging from 8 to 85 percent of all families.
The wide variation in participation rates, and the extremely low rates in some states in particular, has sparked interest in what recipients who are not counted toward the rates are doing. Are they participating in the activities specified in PRWORA but for fewer than the required hours? Are they participating in activities other than those specified in the legislation, such as mental health counseling or substance abuse treatment? Are they sitting idle on the caseload, or are they perhaps lost in the system? If these recipients are participating in activities to some extent, how are programs engaging them? Are some state or local programs being more aggressive than others in engaging more recipients? These questions are particularly relevant in the current policy environment, as the proposed PRWORA reauthorization is likely to both increase the minimum participation rates and change the methodology used to calculate these rates including the required number of hours, the types of countable activities, and the use of the caseload reduction credit. In making these changes, it may be helpful for policymakers to consider the experience of programs that have already made efforts to engage all or nearly all TANF recipients in work and work-related activities.