When Work Just Isn't Enough: Measuring Hardships Faced by Families After Moving from Welfare to Work

Publication Date: June 2001

Publisher: Economic Policy Institute

Author(s): Heather Boushey; Bethney Gundersen

Research Area: Labor; Social conditions

Type: Brief

Abstract:

Since the implementation of welfare reform via the 1996 Personal Responsibility and Work Opportunity
Reconciliation Act, welfare caseloads have dropped dramatically, from 5.5% of the total U.S. population in 1994 to 2.1% in June 2000. The research on those who have left the welfare rolls has shown that a majority of former welfare recipients have worked at some point after leaving welfare, although most are earning only around $7.00 per hour (Assistant Secretary for Planning and Evaluation 2000; Brauner and Loprest 1999; Freedman et al. 2000; Loprest 1999; Parrott 1998). Recent data also show that, although
poverty is down overall, it actually has deepened for those who remain poor and has increased among
working families (Primus and Greenstein 2000).

But statistics on employment and poverty rates among welfare leavers may not provide a complete understanding of whether families are better off by moving from welfare to work. As families move off welfare, measuring the hardships they face is increasingly important to understanding whether these families are meeting their basic needs. Former welfare families who now work in the low-wage labor market are likely to have difficulty meeting work-associated expenses such as child care and transportation costs. Given the extra income often required just to participate in the workforce, these families also may have difficulty meeting other basic needs, such as food, housing, and medical care.

This report documents the extent to which families face hardships as they move from welfare to work. To this end, we compare how different types of families experience hardship, looking specifically at working-poor families, families that currently receive welfare, families that have recently left welfare, and families that left welfare over one year earlier.