UI as a Safety Net for Former TANF Recipients. Unemployment among TANF leavers

03/01/2008

Mean quarterly rates of new unemployment among TANF leavers are reported in Table 7. Also listed in the table are the cumulative annual rates of unemployment in the first three years after leaving TANF. Quarterly percentages of new unemployment are highest in the first year after TANF exit in the range 10.5 to 13.8 across cohorts. Rates are similar across states and rising as the labor market softens in the economic slowdown after 2000. The quarterly unemployment rates decline in the second year after TANF exit to a range from 8.2 to 10.5, and fall to slightly lower levels in the third year to a range from 7.6 to 9.8. Falling unemployment rates in the second and third years are observed despite the softening labor market in 2001.

 

Table 7.
Unemployment Rates (percent) after TANF Exit
  1997 Cohorts 2000 Cohorts 2001 Cohorts 2003
Texas
All
Cohorts
Florida Texas Florida Michigan Ohio Texas Florida Michigan Ohio Texas
Mean of Quarters
Year 1 10.5 11.6 12.1 13.8 13.1 12.3 13.1 13.8 13.7 12.9 13.2 12.6
Year 2 9.5 8.2 10.5 9.9 9.6 9.4 10.4 9.5 9.2 9.2 8.5 9.2
Year 3 9.6 7.6 9.8 8.4 8.2 8.3   8.1   7.9 7.8 8.3
Cumulative (*1)
Year 1 39.2 41.3 44.8 50.6 48.3 45.4 48.4 50.8 50.5 45.7 46.0 45.9
Year 2 60.0 58.1 67.4 69.1 66.1 64.3 70.0 69.0 67.1 64.2 62.8 64.2
Year 3 73.4 67.5 79.5 78.0 74.9 73.8   77.9   73.2 71.9 73.4
 
Sample Size 51,276 94,662 29,873 42,883 59,881 50,229 23,706 36,934 50,823 55,259 60,901 556,427
Note: (*1) The cumulative unemployment rate is the percentage of persons in the cohort who become newly unemployed at any time after TANF Exit. For example, in the Florida 1997 cohort, 73.4 percent of persons in the cohort had become newly unemployed at some point in the first 3 years after TANF exit. Also, the mean cumulative unemployment rate through 3 years across all cohorts (73.4 percent) is computed over only those cohorts for which data are observed for a full 3 years after TANF exit. If all cohorts were used, including the 2001 cohorts for Florida and Ohio for which only eight and ten quarters of data are respectively observed after TANF exit, then the mean cumulative rate across all cohorts would be 73.1 percent as reported in Table 11.

Cumulative annual rates indicate the percentage experiencing unemployment in the first year after TANF exit ranged from 39.2 to 50.8 (see Figure 6). The cumulative unemployment rates for TANF exiters rise in the second year to a range from 58.1 to 70.0 percent. By the third year after TANF exit, the cumulative percentages experiencing joblessness ranged between 67.5 and 77.9 of TANF exiters in the cohort samples. Annual and cumulative rates of unemployment are similar across the four states. Rates rose slightly with the economic slowdown.

Figure 6.
Cumulative Percentages of TANF Leaver Cohorts Who Experience Unemployment by Year After TANF Exit

Figure 6. Cumulative Percentages of TANF Leaver Cohorts Who Experience Unemployment by Year After TANF Exit. See text for explanation.

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