This study finds evidence that receipt of UI benefits is associated with a reduction in the rate of return to TANF. On a monthly basis, UI benefits are two to five times more generous than TANF payments. But small changes in the relative generosity of UI-to-TANF do not affect the rate of return to TANF. Taken together, these results suggest that UI benefit receipt might be serving as a proxy for strong labor force attachment. In other words, it might not be the income replacement function of UI that reduces return to TANF, but more importantly those who receive UI benefits have better prospects for maintaining self-sufficiency through employment. Further investigation into the relative importance of UI income support and labor force attachment could inform policy.
Among all UI applicants, TANF leavers have lower rates of qualifying for UI benefits. The main reasons for lower rates of UI eligibility among TANF leavers are voluntary job quits and dismissals for cause by employers. Analysis of the characteristics of TANF leavers who voluntarily quit or get fired from new jobs could provide guidance for efforts to promote job retention and advancement among recent TANF leavers.
Earlier studies estimated small increases in UI eligibility rates among TANF leavers for changes in state policies governing alternate UI base year computations and waiver of the rule requiring availability for full-time work. The Ohio 20 weeks of work requirement severely limits eligibility, while earlier researchers did not find similar effects for the 20 weeks of work rule in New Jersey. The difference is the Ohio required level of earnings in each of the 20 weeks. The interaction of this rule with TANF work requirements should be investigated.
It is also worth investigating why rates of return to TANF are similar after a new spell of unemployment for UI beneficiaries and those who do not apply for UI benefits. What characteristics do these two groups share and how are they different from TANF leavers who apply but fail to receive UI benefits?
Analysis in this study was done on a series of 11 state and year cohorts of TANF leavers. This approach was driven by the way data gradually became available during the course of the project. Given the current accumulation, these data could be reorganized into five, six, and seven year series for each of the states. This new structure would permit more efficient estimation of state specific effects, and computation of reliable point estimates of year effects within states. Additionally, new data from 1996 to the present are now available for the state of Georgia. In addition to TANF payment, UI payment, and quarterly wage records, the Georgia data include histories of employment and employment services use. Employment and training services are increasingly important instruments supporting self-sufficiency for TANF leavers. Knowing the value of UI and reemployment services together in supporting family independence will help inform policy in these areas.