The Personal Responsibility and Work Opportunity Reconciliation Act (PRWORA) of 1996 replaced federal Aid to Families with Dependent Children (AFDC) with Temporary Assistance for Needy Families (TANF). The new law changed the character of public cash support by introducing lifetime limits and adding work requirements for continued benefit eligibility. Incentives and rewards were established for states to encourage self-sufficiency through employment. These changes combined with a strong economic expansion to induce a mass exodus from TANF rolls (King and Mueser 2005). This trend was slowed but not arrested by the 2001-02 economic recession.(1) Recent years have seen TANF rolls continue to decline during a modest recovery from the recession.
Investigations into the maintenance of self-sufficiency for new TANF leavers have identified traditional government funded employment and training programs as an important part of the story. Among these programs unemployment insurance (UI) has been singled out as a possible reason why TANF leavers remained self sufficient during the 2001-02 recession (Isaacs 2005). Using state administrative data from four of the eight largest states, this study expands on prior knowledge about the use of UI by recent TANF leavers (Kaye 2001, Rangarajan and Razafindratoko 2004). Direct measures of UI application, eligibility, and benefit receipt from administrative data matched with TANF payment data illuminate clear patterns of client use and flows between the two programs.
Access to administrative data on UI and TANF for Florida, Ohio, and Texas was provided through the Administrative Data Analysis and Research (ADARE) consortium supported by the U.S. Department of Labor and managed by the Jacob France Institute at the University of Baltimore.(2) Bilateral data sharing agreements were concluded between each state and the Upjohn Institute. Texas provided UI administrative records to the Upjohn Institute, but Texas TANF records were acquired and analyzed at the Ray Marshall Center, University of Texas. Michigan provided the Upjohn Institute administrative data for research outside the ADARE consortium under a separate data sharing agreement.
(1) National Bureau of Economic Research (2001).
(2) These three states are representative of the nine state ADARE consortium, which includes California, Florida, Georgia, Illinois, Maryland, Missouri, Ohio, Texas, and Washington. http://www.ubalt.edu/jfi/jfi/index.htm.