Welfare Reform Research: What Do We Know About Those Who Leave Welfare?

Publication Date: March 2001

Publisher: Library of Congress. Congressional Research Service

Author(s):

Research Area: Social conditions

Type:

Abstract:

Cash welfare caseloads have declined 57% since peaking in 1994 at 5.1 million cases, with the largest declines occurring since the passage of the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (PRWORA). PRWORA ended the entitlement program of Aid to Families with Dependent Children (AFDC), and replaced it with a block grant program to the states, the Temporary Assistance for Needy Families (TANF) program. Unlike AFDC, under TANF most adults are required to work as a condition of receiving benefits, and assistance from federal funds is time-limited.

States have initiated and completed studies of former welfare recipients to understand how those who exit welfare are faring. These leaver studies use a combination of administrative data and survey data, and the results differ by the type of data used. The methods used by these studies also vary, as do their outcomes.

Employment and other income-related closures are the most common reasons a recipient leaves cash assistance. To date, no information is available on those who reach the federal 5-year lifetime limit as the first recipients will begin reaching this time limit later in 2001. Some recipients have reached shorter state-imposed time limits, but these recipients do not appear to face increased difficulties or hardship.

Among the studies reviewed in this report, employment rates range considerably, but the majority report employment rates between 55% and 64% within 3 months of exit or at the time of the survey. A larger percentage, between 63% and 91% of leavers, have been employed (ever employed) for some period of time since exit. The average hourly wage reported among welfare leavers ranged from $5.50 to $8.80 per hour.

The leaver studies indicate that while the majority of welfare leavers are employed, most remain poor and rely on other types of assistance such as health insurance, food stamps, and child care to supplement their wages. However, declining participation in these programs has raised concerns. The leaver studies illustrate that some welfare leavers did not think they were eligible for food stamps or Medicaid, while others indicated that they did not need these services or that it was t o o much hassle to receive them. Receipt of child care subsidies is somewhat low, although some indicate a "lack of need" for these subsidies. Less than half of leavers also appear to be experiencing "hardships" such as difficulties paying bills, difficulties acquiring medical care, and experiencing a time with no way to buy food.

Employment is the reason the majority of recipients leave welfare, and lack or loss of employment is the most common reason individuals return to welfare. Among leavers who remained off welfare for at least 2 months, between 18% and 35% had returned for a period of time since exit. Although lack of employment is the most common reason individuals return to welfare, there is some evidence that those who leave for income-related reasons are less likely to return than those who leave welfare for failing to comply with program requirements.