Unemployment Insurance as a Potential Safety Net for TANF Leavers: Evidence from Five States. C. TANF Program and Employment Experiences of Sample Members

09/01/2004

Before examining monetary eligibility among the sample members, it is useful to briefly describe the sample members’ TANF and employment experiences during the year preceding the reference month, as well as their earnings and employment patterns after welfare exit.(4) We observed considerable variation in TANF receipt across the study sites during the year preceding the reference month. For instance, clients in Philadelphia spent on average just more than 80 percent of the time during the year prior to the reference month on welfare; by contrast, clients in Tarrant County and Phoenix spent just over 50 percent of that time on welfare (Table II.3). The average amount of TANF benefits received also varied considerably, with clients receiving less than $200 per month, on average, at the time of the reference month in Tarrant County, compared with more than twice that amount in Philadelphia.

Table II.3.
Characteristics of the Reference Sample
(Percentages)
Characteristics Phoenix,
AZ
Cook Co.,
IL
Baltimore
Co., MD
Philadelphia,
PA
Tarrant Co.,
TX
Age at Reference Month (Years)

Less than 20

7 6 5 8 7

21 to 30

48 47 31 42 50

31 to 40

32 33 28 33 29

More than 40

12 15 36 17 14

(Average age, in years)

(30) (31) (37) (31) (30)
Percentage of Time on TANF in Year Preceding Reference Month

0

5 2 7 2 6

1 to 25

23 7 14 8 24

26 to 50

21 9 12 7 20

51 to 75

17 15 13 9 19

76 to 99

14 28 10 13 14

100

21 39 45 61 17

(Average)

(56) (79) (69) (83) (54)
Average Monthly TANF Benefit Amount in Year Preceding Reference Month

Less than $200

15 32 35 10 56

$200 to $300

39 37 11 11 41

$300 to $400

31 18 32 30 2

More than $400

13 13 22 49 0

(Average)

($297) ($258) ($296) ($398) ($187)
Percentage of Time Employed in Year Preceding Reference Month

0

36 38 42 49 35

1 to 25

15 15 13 16 17

26 to 50

16 13 12 14 17

51 to 75

15 13 12 11 16

76 to 100

18 22 22 10 16

(Average)

(41) (42) (40) (30) (40)
Sample Size 6,758 39,513 2,669 34,813 2,273
Source: Administrative records data from selected Welfare-to-Work Evaluation study sites, assembled by Mathematica Policy Research, Inc.

There was less variation across the sites in terms of clients’ reported employment—clients in most of the sites were employed for around 40 percent of the time during the year preceding the reference month. The exception was Philadelphia; in that site, on average, clients were employed about 30 percent of the time during the year preceding the reference month, and nearly half the clients had no employment during that year.

As we saw in Figure II.1, between 30 and 50 percent of clients left welfare within one year of the reference month and found employment within 3 months of welfare exit, except for Tarrant County where the rate was of almost 70 percent of clients. Average quarterly earnings at the time of TANF exit ranged between $2,100 and $2,500 for most sites (Table II.4). Baltimore County, where clients had average quarterly earnings of more than $2,800, was the exception. That finding is consistent with Baltimore County having somewhat older sample members on average. We observed the lowest level of earnings in Tarrant County; around 35 percent of former TANF recipients there earned less than $1,000 during the quarter of their TANF exit.

Table II.4.
Distribution of Quarterly Earnings at the Time of TANF Exit
(Percentages)
  Phoenix,
AZ
Cook Co.,
IL
Baltimore
Co., MD
Philadelphia,
PA
Tarrant Co.,
TX
Quarterly Earnings at Time of Exit

Less than $1,000

29 31 26 24 35

$1,000 to $2,000

21 19 20 21 21

$2,000 to $3,000

18 18 17 20 15

$3,000 to $4,000

15 15 12 16 13

$4,000 to $5,000

9 9 9 10 7

More than $5,000

7 8 15 8 8
(Average) ($2,240) ($2,324) ($2,846) ($2,460) ($2,106)
Sample Size 3,208 14,482 967 10,833 1,512
Sources: Administrative records data from selected Welfare-to-Work Evaluation study sites, assembled by Mathematica Policy Research, Inc.
Note: Sample includes those who exited TANF and held a job within three months of TANF exit.

Even though many welfare recipients are able to find jobs, they often have greater difficulty than do other workers in keeping them. Former welfare recipients typically lack experience with the world of work, and they usually obtain entry-level jobs associated with high turnover. When the economy is weak, employers who wish to reduce their workforce may lay these workers off before they do so to more experienced workers. Indeed, we found that the average levels of reported employment among those who left TANF for work declined considerably over time. During the quarter after TANF exit, nearly 90 percent of welfare recipients who left for work had UI-reported employment (Figure II.2). This fraction dropped steadily over time, and at two years after TANF exit, employment rates among the five sites ranged from roughly 50 percent to roughly 70 percent.

Some individuals who are not employed at the time of their TANF exit may eventually enter the labor market. We see from the bottom of Figure II.2 that a small fraction of these individuals indeed find employment. However, employment levels for these individuals remain very low (and constant), at around 20 percent. On average, their quarterly earnings were about half the earnings of those who left TANF for work (between $1,150 to $1,350; not shown).

Figure II.2.
Employment Patterns from the Time of TANF Exit
Employment Patterns from the Time of Tanf Exit
Source: Administrative records data from selected Welfare-to-Work Evaluation study sites, assembled by Mathematica Policy Research, Inc.

Note: Figures pertain to those who exited TANF within one year of the reference period. The reference period is September 1999 for Philadelphia and between March and August 2000 for the other sites. Baltimore County largely surrounds but does not include the city of Baltimore. Tarrant County includes the city of Fort Worth.

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