Summaries of state level trends in numbers of TANF caseloads, UI beneficiaries, and those who are low income and unemployed are presented in Table 18 and Figures 12, and 13. Counts for each quarter are listed by state over the full range of data available; some data series are longer than others. Numbers of those who are low income and unemployed are counted among UI beneficiaries. Low-income unemployed are defined as having earnings of less than $2,500 in the quarter before the starting date of the UI benefit year.(1)
Trends in UI beneficiaries and the low-income unemployed are illustrated graphically in Figures 12 and 13. To eliminate seasonal fluctuations, the figures present data smoothed by four-quarter moving averages. Numbers of TANF caseloads declined steadily over the years observed, with rates declining faster before the year 2000 than after. Influenced by trends in aggregate business activity, counts of UI recipients tended to rise in the quarters leading up to the start of 2002 then gradually declined.(2) The numbers of low-income unemployed rose in two of the states up to the start of 2002, but were flat or declining in all states after that time.
|Note: (*1) Earnings of less than $2,500 in the quarter prior to BYB.|
UI Beneficiaries Over Time from Florida, Michigan, Ohio, and Texas Using a Four-Quarter Moving Average
Low-Income Jobless Over Time from Florida, Michigan, Ohio, and Texas
State trends in UI benefit receipt do not help explain trends in TANF caseloads. There is no identifiable link between aggregate declines in TANF caseloads and trends in total UI recipients at the state level. A regression was run on the counts data listed in Table 18 for Florida, Michigan, and Ohio. As reported in Table 19, there was no measurable influence of the aggregate level of UI beneficiaries on the TANF caseload. The parameter estimate on the number of beneficiaries is not statistically significantly different from zero.
|Variable||Parameter Estimate||Standard Error||T-statistic|
|Number of UI Beneficiaries||-0.004||0.031||-0.14|
|Year and Quarter = 1999:1||-3,421||4,243||-0.81|
|Year and Quarter = 1999:2||-8,363||4,260||-1.96|
|Year and Quarter = 1999:3||-9,810||4,262||-2.30|
|Year and Quarter = 1999:4||-8,866||4,263||-2.08|
|Year and Quarter = 2000:1||-16,587||3,718||-4.46|
|Year and Quarter = 2000:2||-18,893||3,732||-5.06|
|Year and Quarter = 2000:3||-21,216||3,729||-5.69|
|Year and Quarter = 2000:4||-21,696||3,884||-5.59|
|Year and Quarter = 2001:1||-29,278||3,673||-7.97|
|Year and Quarter = 2001:2||-29,451||3,544||-8.31|
|Year and Quarter = 2001:3||-28,782||3,704||-7.77|
|Year and Quarter = 2001:4||-28,061||4,060||-6.91|
|Year and Quarter = 2002:1||-29,810||4,210||-7.08|
|Year and Quarter = 2002:2||-30,808||3,891||-7.92|
|Year and Quarter = 2002:3||-31,833||3,812||-8.35|
|Year and Quarter = 2002:4||-30,367||3,902||-7.78|
|Year and Quarter = 2003:1||-32,598||4,293||-7.59|
|Year and Quarter = 2003:2||-32,088||4,131||-7.77|
|Year and Quarter = 2003:3||-30,229||4,086||-7.40|
|Year and Quarter = 2003:4||-28,421||3,904||-7.28|
|Year and Quarter = 2004:1||-31,158||4,188||-7.44|
|Year and Quarter = 2004:2||-29,531||4,247||-6.95|
|Year and Quarter = 2004:3||-29,361||4,290||-6.84|
|Year and Quarter = 2004:4||-28,393||4,323||-6.57|
|Year and Quarter = 2005:1||-31,928||4,814||-6.63|
|Year and Quarter = 2005:2||-31,334||4,175||-7.50|
|Year and Quarter = 2005:3||-30,368||4,072||-7.46|
|Year and Quarter = 2005:4||-29,249||4,091||-7.15|
|Year and Quarter = 2006:1||-29,641||5,063||-5.85|
|Note: Observations = 67; R-square = 0.9954; Adjusted R-square = 0.9909.|
Only a small fraction of TANF leavers receive UI benefits. Among TANF leavers observed in this study, about 73 percent become unemployed within 3 years, 24 percent of these apply for UI benefits, with 55 percent of applicants becoming beneficiaries. This suggests that about 10 percent of TANF leavers receive UI benefits.
When asking if UI receipt helps to explain the downward trend in TANF caseloads, the implicit question is whether UI benefits act as a source of household income in place of TANF income support, thereby preventing return to TANF by newly unemployed TANF leavers. Three paths were examined after leaving TANF for work and then subsequently becoming unemployed: those who did not apply for UI return to TANF at a mean rate of 41.8 percent, UI applicants who do not receive UI benefits return to TANF at a mean rate of 52.6 percent, and UI beneficiaries return to TANF at a rate of 41.2 similar to the rate for non-UI applicants. Among TANF leaver UI applicants, those who received UI returned to TANF at significantly lower rates.
The person-level analysis identifies an important role for UI in supporting TANF leavers. But the significantly larger scale of the UI program makes it difficult to establish a clear statistical relationship between TANF caseload declines and numbers of UI beneficiaries at the aggregate level. A compositional analysis of UI claims showed that the numbers of recent TANF recipients among UI applicants were flat over the period of years examined (O’Leary 2007). Furthermore, the share of UI beneficiaries who lost high paying jobs increased at the same time, meaning TANF recipients actually declined as a share of all UI beneficiaries. In the years 1997 to 2003, the UI program operated to support self-sufficiency of TANF leavers, but the mass exodus from TANF did not overburden the federal-state UI system.
(1) Also called the UI benefit year begin date (BYB). See the glossary in Appendix B.
(2) The UI counts include all beneficiaries in the states and are not limited to TANF leavers.