Welfare Indicators and Risk Factors: Fourteenth Report to Congress. Measuring Welfare Dependence

09/22/2015

This report focuses on welfare “dependence” as well as welfare “recipiency.”  While recipiency can be defined based on the presence of benefits from TANF, SNAP, or SSI during a given time period, dependence is a more complex concept.  Welfare dependence, like poverty, is a continuum, with variations in degree and in duration.  Families may be more or less dependent if larger or smaller shares of their total resources are derived from welfare programs.  The amount of time over which a family depends on welfare might also be considered in assessing its degree of dependence.  Nevertheless, a summary measure of dependence to be used as an indicator for policy purposes must have some fixed parameters that allow one to determine which families should be counted as dependent, just as the poverty line defines who is poor under the official standard.  The definition of dependence proposed by the Advisory Board for this purpose is as follows:  A family is dependent on welfare if more than 50 percent of its total income in a one-year period comes from TANF (which replaced AFDC), SNAP (formerly Food Stamps), and/or SSI, and this welfare income is not associated with work activities.  In following the Board’s proposal, we adopt the following definition of welfare dependence among individuals in families9 for use in this report:

Welfare dependence is the proportion of all individuals in families that receive more than

half of their total family income in one year from TANF, SNAP, and/or SSI.

No definition of welfare dependence is without its limitations.  The Advisory Board recognized that no single measure could capture fully all aspects of dependence and that their proposed measure should be examined in concert with other indicators of well-being.  While the Board’s proposal would count unsubsidized and subsidized employment and work required to obtain benefits as work activities, existing data sources do not permit distinguishing between welfare income associated with work activities and non-work-related welfare benefits.  As a result, the data shown in this report may overstate the incidence of dependence as conceptualized by the Advisory Board.  In fiscal year 2012, 43.2 percent of all TANF adult recipients participated in some type of work activity during the reporting month compared with 7 percent in 1992.10

Also, any definition of dependence represents an arbitrary choice of a percentage of income from welfare beyond which families will be considered dependent.  But using a single point – in this case 50 percent – yields a relatively straightforward measure that can be tracked easily over time, and is likely to be associated with any large changes in total dependence, however defined.

Figure SUM 1 and Table SUM 1 show the trend for the welfare dependency rate adopted for this report.  Also, for comparison purposes, we include an annual “recipiency” measure that shows the proportion of all individuals in families that receive any benefits at any point during the year from TANF, SNAP, and/or SSI.  Note that this measure of annual recipiency differs from average monthly recipiency rates presented elsewhere in this report (for example in Indicator 3 and Appendix A), where annual rates tend to be higher given the broader time period for observing benefit receipt than rates for one particular month or for an “average” month.  See Appendix D for further discussion of annual and monthly measures in this report.   

Annual dependency and recipiency rates follow fairly similar trends and even before the Personal Responsibility and Work Opportunity Reconciliation Act (PRWORA) of 1996 was passed, welfare recipiency and dependency were both in decline.  The overall drop in the recipiency rates during the 1990s is consistent with decreases in TANF participation, low unemployment, lower poverty rates, and overall economic expansion.  The subsequent rise in the welfare program recipiency rate after 2000 coincided with recessions in the early and then late 2000s, and is associated more with increases in SSI and SNAP receipt than TANF, where caseloads continue a general downward trend (see Indicator 3 for further information on trends in average monthly recipiency rates for each of the three programs). 

 

Figure SUM 1.  Recipiency and Dependency Rates: 1993-2012

Figure SUM 1.  Recipiency and Dependency Rates: 1993-2012


YearRecepiency RateDependency Rate
199316.65.9
199417.25.8
199516.95.3
199616.05.2
199714.84.5
199813.53.8
199913.33.3
200012.53.0
200112.63.1
200213.23.2
200314.13.6
200415.03.7
200515.33.8
200615.63.7
200715.83.5
200817.14.0
200919.94.6
201022.75.3
201123.15.2
201223.65.1

Note:  Recipiency is defined as living in a family with receipt of any amount of AFDC/TANF, SSI or SNAP during the year. 

Dependency is defined as living in a family having more than 50 percent of annual income from AFDC/TANF, SSI and/or SNAP.  Dependency
rates would be lower if adjusted to exclude welfare assistance associated with working.

Source: Unpublished tabulations from the Current Population Survey, Annual Social and Economic Supplement, 1994-2012, analyzed using the TRIM3 microsimulation model.

The Great Recession, that officially began in late 2007 and lasted through mid-2009, reversed declines in welfare recipiency experienced in the late 1990s and exacerbated an upward trend in recipiency rates that began in 2001.  As shown in Figure SUM 1, the annual dependency rate fell to a low of 3.0 percent in 2000 and the annual recipiency rate declined to 12.5 percent.  By 2010, the dependency rate hit a recent peak of 5.3 percent before decreasing to 5.1 percent in 2012.  The welfare recipiency rate reached 22.7 percent in 2010 and increased to 23.6 percent in 2012.    

In 2012, as in previous years, general patterns in welfare receipt are apparent.  Recipiency and dependency rates are higher for Non-Hispanic Blacks and Hispanics of any race than they are for Non-Hispanic Whites, as shown in Table SUM 1.  Recipiency and dependence are also higher for young children than they are for adults, and they are higher for individuals in female-headed families than they are for those in married-couple families.  For those living in married-couple families, welfare recipiency rates increased from 8.8 percent in 2007 to 15.4 percent in 2012, a 6.6 percentage point increase.  Hispanics of any race show a 12.6 percentage point increase in recipiency rates between 2007 and 2012.  Adults age 65 and older experienced smaller increases in welfare recipiency than did other demographic groups.  Their welfare recipiency rate increased from 10.6 percent to 13.7 percent over the 2007 to 2012 period, a 3.1 percentage point increase.

Another factor affecting dependence is the time period observed.  The summary measures shown in Figure SUM 1 and Table SUM 1 focus on recipiency and dependency rates measured on an annual, cross-sectional basis.  Longitudinal measures of program receipt (both annual and monthly) show that program spells are typically short and long-term recipiency is rare (see Chapter II).  Indicator 7, for example, shows that 79.6 percent of all TANF spells and 53.7 percent of all new SNAP spells lasted one year or less, with 50.5 percent and 28.7 percent, respectively, lasting four months or less.  Over a longer period of time, Indicator 9 shows that among individuals receiving TANF at some point over a ten-year period ending in 2008, 8.0 percent received some TANF benefits during six or more years.  Another fifth (20.5 percent) were recipients in three to five years, and more than two-thirds (71.5 percent) received TANF in only one or two years during this period. 

Table SUM 1. Recipiency and Dependency Rates: Selected Years

 

1993

1996

1997

1998

1999

2000

2002

2004

2006

2007

2008

2009

2010

2011

2012

Recipiency Rates (Rates of Any Amount of  AFDC/TANF, SNAP or SSI)

All Persons

16.6

16.0

14.8

13.5

13.3

12.5

13.2

15.0

15.6

15.8

17.1

19.9

22.7

23.1

23.6

 Racial/Ethnic Categories

  Non-Hispanic White

10.3

9.9

9.7

8.6

8.4

8.2

8.8

10.1

10.6

10.4

11.4

13.3

15.7

16.3

16.5

  Non-Hispanic Black

38.0

35.6

30.2

29.6

29.8

27.0

27.7

32.4

32.0

33.4

34.1

37.6

40.7

39.7

41.2

  Hispanic

34.6

32.0

28.0

24.5

23.4

21.0

21.7

22.6

23.8

24.6

27.6

32.9

36.9

36.4

37.2

 Age Categories

  Children ages 0-5

30.5

28.2

25.1

22.4

21.5

19.8

21.4

24.6

25.7

27.0

28.9

34.3

38.1

38.0

39.5

  Children ages 6-10

24.9

24.2

21.2

20.0

19.8

18.0

18.8

22.2

23.2

23.9

26.2

30.4

34.7

34.8

36.5

  Children ages 11-15

22.1

21.1

19.4

17.0

17.3

16.3

16.8

20.5

21.5

22.5

23.1

27.4

31.3

32.0

32.6

  Women ages 16-64

16.4

16.0

14.7

13.6

13.6

12.5

13.4

15.0

15.7

15.6

16.9

19.8

22.6

23.3

23.5

  Men ages 16-64

11.5

11.7

11.1

10.0

9.6

9.2

10.3

11.6

12.0

12.1

13.5

16.0

18.6

19.2

19.6

  Adults ages 65 and over

11.2

10.3

10.2

9.9

10.0

10.4

9.7

10.0

10.6

10.6

11.4

11.3

12.3

12.9

13.7

 Family Categories

 Persons in:

  Married-couple families

10.5

9.6

8.7

8.3

7.9

7.2

7.5

8.6

8.9

8.8

9.9

12.5

15.0

14.6

15.4

  Female-headed families

47.8

46.0

41.6

37.5

39.9

37.1

37.7

42.6

44.3

45.0

47.3

50.4

54.2

55.0

56.1

  Male-headed families

27.6

25.3

24.3

19.7

19.3

21.8

21.2

21.9

25.8

26.4

27.3

33.1

34.3

34.9

37.3

  Unrelated persons

9.7

11.5

11.9

10.9

10.0

10.1

11.5

12.7

12.6

12.4

14.1

15.5

18.0

20.0

19.3

Dependency Rates (More than 50 Percent of Income from AFDC/TANF, SNAP and/or SSI)

All Persons

5.9

5.2

4.5

3.8

3.3

3.0

3.2

3.7

3.7

3.5

4.0

4.6

5.3

5.2

5.1

 Racial/Ethnic Categories

  Non-Hispanic White

3.0

2.6

2.5

2.1

1.8

1.9

1.8

2.2

2.3

2.1

2.4

2.7

3.2

3.3

3.1

  Non-Hispanic Black

17.8

13.8

11.4

10.5

9.1

7.7

8.7

10.0

9.5

9.4

10.2

11.1

12.5

12.3

12.0

  Hispanic

11.8

10.9

9.1

6.6

5.4

4.5

4.9

5.2

5.2

5.1

5.7

7.1

8.0

7.7

7.4

 Age Categories

  Children ages 0-5

13.9

11.2

9.3

7.8

6.2

6.0

6.0

7.1

6.9

7.1

7.6

9.1

9.5

10.2

9.6

  Children ages 6-10

11.2

9.5

8.4

6.7

6.1

5.1

5.1

6.0

5.7

5.3

6.3

7.5

8.4

8.4

8.3

  Children ages 11-15

9.3

8.1

7.4

5.7

4.5

4.0

4.0

5.1

5.2

5.3

5.3

6.3

7.1

7.1

7.1

  Women ages 16-64

5.9

5.2

4.6

3.9

3.5

3.0

3.4

3.7

3.9

3.7

4.2

4.8

5.5

5.7

5.5

  Men ages 16-64

2.7

2.7

2.5

2.1

1.9

1.8

2.0

2.4

2.5

2.3

2.8

3.2

4.0

3.7

3.7

  Adults ages 65 and over

2.4

2.4

2.1

2.1

2.0

2.1

2.0

2.2

2.1

2.1

2.2

2.2

2.4

2.3

2.5

 Family Categories

 Persons in:

  Married-couple families

1.8

1.7

1.4

1.1

1.0

1.0

1.0

1.0

1.2

1.1

1.3

1.6

1.9

1.9

1.8

  Female-headed families

25.7

21.1

18.4

15.0

13.6

11.4

11.7

13.8

13.2

12.6

13.4

14.6

16.4

16.2

15.8

  Male-headed families

6.8

5.4

5.6

4.2

3.0

4.4

3.8

4.0

4.5

4.5

4.7

6.4

6.5

5.9

5.8

  Unrelated persons

3.8

4.2

4.2

4.2

3.4

3.8

4.1

4.5

4.7

4.3

5.2

5.8

6.8

6.8

6.9

Note:  Recipiency is defined as living in a family with receipt of any amount of AFDC/TANF, SSI or SNAP during the year.  Dependency is defined as living in a family having more than 50 percent of annual family income from AFDC/TANF, SSI and/or SNAP.  Dependency rates would be lower if adjusted to exclude welfare assistance associated with working.  Spouses are not present in the male-headed and female-headed family categories.  Persons of Hispanic ethnicity may be of any race. Beginning in 2002, estimates for Whites and Blacks are for persons reporting a single race only.  Persons who reported more than one race are included in the total for all persons but are not shown under any race category.  Due to small sample size, American Indians/Alaska Natives, Asians and Native Hawaiians/Other Pacific Islanders are included in the total for all persons but are not shown separately.

Source: Unpublished tabulations from the Current Population Survey, Annual Social and Economic Supplement, 1994-2012, analyzed using the TRIM3 microsimulation model.


9 The unit of analysis for most of the statistics in this report is “individuals” rather than families or households.  Appendix D provides more information on the use of individuals as the unit of analysis.

10 Office of Family Assistance, Administration for Children and Families, Characteristics and Financial Circumstances of TANF Recipients, Fiscal Year 2012.  This 43.2 percent includes subsidized employment and work preparation activities (including subsidized jobs, on-the-job training, work experience or community services). The earnings of those in unsubsidized employment would be correctly captured as income from work in national surveys.  Any welfare benefits associated with work experience, community service programs or other work activities, however, would be counted as income from welfare in most national surveys, a classification incompatible with the Advisory Board’s proposed definition.

 

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