UI as a Safety Net for Former TANF Recipients. Previous research on employment and earnings of TANF leavers

03/01/2008

Acs and Loprest (2004) survey and synthesize results from 18 TANF leaver studies done in 14 states covering activity from 1996 to 2000. They examine work among leavers, characteristics of leavers who are not working, and the well-being of TANF leaver families. They account for differences in methodologies when drawing conclusions from the studies. Acs and Loprest (2004) find that a majority (about 60 percent) worked after leaving TANF. When working, TANF leavers tend to earn above the federal minimum wage, but less than half of all working leavers receive a full set of employment benefits like paid sick leave, health insurance, and paid vacations. During the year after leaving TANF, 70 percent worked at some time, but only 40 percent worked in every quarter throughout the year. They estimated that about 20 percent of TANF leavers returned to TANF within a year. Another 10 percent have no observable earnings, but did not return to TANF. On average, leaver families had relatively low earnings, with 40 to 50 percent living below the official poverty level of income in the first year after leaving TANF.

King and Mueser (2005) observe that welfare caseloads in the U.S. hit a peak of over 5 million households in 1994, then rapidly declined by more than half in five years. They studied the impact of welfare reform on caseloads and the labor market success of TANF leavers in six major metropolitan areas in the U.S. (Atlanta, Baltimore, Chicago, Fort Lauderdale, Houston, and Kansas City). To understand the whole picture, King and Mueser looked beyond TANF exit rates to impacts on long-term welfare recipients, new entrants to TANF, employment of TANF recipients, employment of TANF leavers, and the characteristics of jobs held by those involved with TANF. They found that during the 1990s work increased substantially among TANF recipients and also increased among TANF leavers. The kinds of jobs obtained, however, by TANF recipients and leavers did not change much from earlier periods. Furthermore, job stability was low among those involved in work and most jobs obtained did not provide wages and benefits adequate to assure self-sufficiency.

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