the changing role of welfare in the lives of low-income families with children

The Changing Role of Welfarein the Lives of Low-Income Families with Children

Pamela Loprest Sheila ZedlewskiThe Urban Institute

An Urban InstituteProgram to AssessChanging Social Policies

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The Urban Institute2100 M Street, NWWashington, DC 20037Phone: 202.833.7200Fax: 202.467.5775http://www.urban.org

Assessingthe NewFederalismAn Urban InstituteProgram to AssessChanging Social Policies

Copyright © August 2006. The Urban Institute. All rights reserved. Except for short quotes, no part of this paper may bereproduced in any form or used in any form by any means, electronic or mechanical, including photocopying, recording, orby information storage or retrieval system, without written permission from the Urban Institute.

This report is part of the Urban Institute’s Assessing the New Federalism project, a multiyear effort to monitor and assess thedevolution of social programs from the federal to the state and local levels. Olivia Golden is the project director. The projectanalyzes changes in income support, social services, and health programs. In collaboration with Child Trends, the projectstudies child and family well-being.

The Assessing the New Federalism project is currently supported by The Annie E. Casey Foundation, The Robert WoodJohnson Foundation, The John D. and Catherine T. MacArthur Foundation, The California Endowment, and the CharlesStewart Mott Foundation.

The authors thank Jennifer Holland and Simone Schaner for their excellent research assistance and contributions to thestudy. Olivia Golden and Gregory Acs provided insightful comments on an earlier draft.

The nonpartisan Urban Institute publishes studies, reports, and books on timely topics worthy of public consideration. Theviews expressed are those of the authors and should not be attributed to the Urban Institute, its trustees, or its funders.

Contents

Executive Summary v

Changing Policies and Knowledge about Their Effects 2

Syntheses of the Effects of Reforms in the 1990s 4

Post-Reform Welfare Leavers and Stayers 5

Some Recent Key Studies 6

Data and Methods 8

Changing Welfare Caseload 10

Family Structure and Demographics 14

Family Structure 14

Demographics 16

Work 19

Employment Outcomes 20

Characteristics of Jobs 24

Barriers to Work 26

Family Income and Economic Well-Being 34

Composition of Income 34

Poverty 36

Use of Other Government Supports 38

CHANGING ROLE OF WELFARE IN LIVES OF LOW-INCOME FAMILIES WITH CHILDREN

Family and Child Well-Being 42

Disconnected Families 44

Summary and Implications 47

Appendix A: Sample Selection and Definitions 51

Appendix B: Results for All Three NSAF Years (1997, 1999, and 2002) 57

Notes 73

References 76

About the Authors 79

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Executive Summary

Reforms passed in 1996 ended welfare as we knew it. Individuals no longer havean entitlement to welfare, and states have changed how they administer cash assis-tance. Most states actively discourage welfare entry and aggressively require newentrants to pursue paid work. Numerous other safety net programs also changed, asthe 1996 legislation limited immigrant eligibility for food stamps, scaled back chil-dren’s eligibility for disability benefits, increased federal money for child care, andplaced greater demands on states’ child support enforcement systems. States weregiven incentives to encourage marriage and the formation of two-parent familiesand to reduce out-of-wedlock child bearing.

The dramatic decline in welfare caseloads represents the most stunning post-reform outcome. Caseloads declined by over 50 percent in just a few years. Numer-ous studies attempt to explain caseload decline and how families fared. Scholarsgenerally agree that the strong economy, work supports such as the Earned IncomeTax Credit, and welfare reform all encouraged a shift from welfare to work, espe-cially among single mothers. Scholars disagree about the relative importance of eachof these factors.

The National Survey of America’s Families (NSAF), conducted by the UrbanInstitute as part of its Assessing the New Federalism project, documented changes inlow-income families’ circumstances at the national level over the 1996 to 2002period. This study uses these data to summarize what we learned about families inthe welfare system. We describe outcomes for three low-income groups: familiescurrently on welfare, families that recently left welfare, and those that never receivedwelfare. The outcomes discussed include family structure, demographic characteris-tics, work and barriers to work, income, and well-being.

To establish comparability across the three sample groups we limit the sampleto low-income families, defined as those with income below 200 percent of the fed-eral poverty level either last year or in the current year and not above 250 percentof the poverty level in either period.1 These income restrictions confine all threesample groups—current welfare recipients, recent welfare leavers, and nonwelfarefamilies—to families with consistently low incomes.

Changes in welfare policy after reform had the potential to affect who stayed onwelfare, who exited welfare, who came on to welfare, and who did not come on.This means that all three groups of low-income families we study could be affectedby changes in welfare policy. In addition, all three groups can be affected by theeconomy and broader societal trends. Over time, changes for one group can influ-ence the composition of other groups of low-income families. Our results, there-fore, generally describe outcomes among low-income families most likely to beaffected by the evolution of the new welfare policies.

Our key findings are described below.

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Family Structure and DemographicsStates implemented numerous changes in welfare policies that could affect the struc-ture and demographics of families on welfare. Most states expanded eligibility fortwo-parent families, some no longer increased benefits when a baby was born whileon welfare, and all required teen parents to live in supervised settings. Some statesadopted federal restrictions on eligibility for immigrant families, while others usedtheir own funds to maintain immigrant eligibility. Generally, we observe increasesin cohabitation among low-income families but decreases in marriage, changes inthe immigrant composition of welfare caseloads, and changes in the geographic dis-tribution of welfare caseloads.

• Changes in family structure occurred across all three sample groups. Marriagedeclined among both recent welfare leavers and nonwelfare families. Cohabita-tion nearly doubled among families currently on welfare and those never on wel-fare between 1997 and 2002. Given similar changes in marital status among thenonwelfare group and the groups with welfare experience, these changes are likelydue to factors beyond welfare policy.

• The immigrant share of the welfare group increased from 6.6 to 11.3 percent,and their share of the nonwelfare group jumped from 15 to 24.4 percent, between1997 and 2002. The increasing share of immigrants on welfare occurs only amongimmigrants in the United States for five or more years (who remained eligible forbenefits under the new federal rules) and not among newer immigrants. We donot observe a comparable increase in immigrants among recent welfare leavers.Immigrant parents make up a larger share of longer-term welfare stayers in 2002than in 1997, suggesting that immigrants find it more difficult to leave welfarethan nonimmigrants.

• Comparing 2002 to 1997, a larger share of current welfare recipients live in theWest, and a larger share of recent welfare leavers live in the South. The geo-graphic distribution of the nonwelfare group remained fairly constant during thistime. These shifts probably reflect geographic differences in welfare policies. West-ern states with more generous policies (especially California, which dominatesthe western caseloads) have retained or attracted more low-income families towelfare while southern states with low benefits and stricter work participationpolicies discourage welfare use more than other regions. Given the simultaneousdeclines in welfare caseloads across all regions of the country, the result does notmean that families have moved for more generous welfare benefits.

Work and BarriersMoving welfare recipients into work was a major focus of welfare reform. Througha mix of incentives and requirements, states implemented various work policies toincrease work among recipients and move recipients off welfare into work. Overtime, as states endeavored to engage greater shares of the caseload in work, they

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were confronted with recipients’ multiple barriers to work and began to implementstrategies to address these needs while continuing to focus on work. We find thatwork among welfare recipients increased dramatically, while work among formerrecipients and the nonwelfare group declined.

• Work and work-related activity among current welfare recipients increased dra-matically from 1997 to 2002. In 1997, 20.9 percent of recipients were working,compared with 29.2 percent in 2002. In contrast, work declined among recentleavers and nonwelfare families over this period.

• Work increased among current welfare recipients with employment barriers,including those with less than a high school education, those with a child receiv-ing SSI, and those who are primarily Spanish speaking. Employment of currentrecipients with multiple barriers more than doubled between 1997 and 2002,from 10.3 to 25.9 percent. Over the same time, the percentage of nonwelfarerecipients working with barriers generally declined. This suggests that states’stronger work policies had a broad impact on caseloads.

• We find little evidence to support the concern that an increasing share of currentwelfare recipients face barriers to work. Between 1997 and 2002, the share of thecaseload with multiple barriers remained constant and only one potential barrierto employment, the percent primarily speaking Spanish, increased.

• In contrast, barriers to employment increased among recent welfare leavers, whoreported poor physical and mental health problems and multiple barriers moreoften in 2002 than in 1997. This could be due to an increase in the share withbarriers able to work their way off welfare or an increase in recipients with barri-ers being cut off benefits because they were unable to meet requirements.

• Between 1997 and 2002, wage rates increased significantly for all three groups.Median wage rates, after accounting for inflation, increased from $5.50 to $7.00an hour for current recipients, from $6.25 to $7.75 for former recipients, andfrom $7.00 to $8.15 for low-income women with no welfare history. In percent-age terms, the wage increases for the two welfare groups are higher than theincrease for the nonwelfare group. Other benefits on the job (such as paid leaveand employer health insurance) remained unchanged.

Income and PovertyWelfare policies that encourage earnings and discourage receipt of welfare benefitsand changes in family composition also can affect cash family income. In addition,changes in work supports including food stamps, child care, and health insurancewill affect families’ noncash income. On average, we see improvements in incomefor current welfare recipients but little change in income and poverty for recentwelfare leavers and the nonwelfare group. However, poverty among single parentsliving alone, the group most likely affected by welfare policy, changed in differentways across the three study groups. Also, the share of families in the recent andnonwelfare groups receiving work supports increased over time.

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• Among single parents living alone, poverty declined for current welfare recipi-ents. Deep poverty (income below 50 percent of the federal poverty level)dropped by over 16 percentage points between 1997 and 2002 (from 69 to 52.6percent). New state policies allowing welfare recipients to receive some cash assis-tance while working for pay, along with the shift in the welfare population awayfrom the South with relatively low benefits and toward the West with higher ben-efits, contribute to reduced poverty among families on welfare.

• For single parents living alone, poverty levels remained fairly flat for recent wel-fare leavers and increased for the nonwelfare families. Deep poverty increasedfrom 19.5 to 25.8 percent between 1997 and 2002 for the nonwelfare group.While this increase in deep poverty could reflect the weaker economy, it did notoccur among comparable singles in the welfare groups. Instead, the result couldreflect a compositional shift across groups as more very low income single parentsremained off the welfare rolls in 2002 than in 1997.

• Countering the trends in poverty, receipt of noncash government work supportsincreased for recent welfare leavers and nonwelfare families but declined for cur-rent welfare families. More families that left welfare received help paying for childcare, food stamps, and government health insurance in 2002 than in 1997, reflect-ing improvements in the delivery of these benefits, more dollars for child care,and the new State Children’s Health Insurance Program enacted in 1997. Declin-ing noncash supports for welfare families probably reflect new rules restrictingimmigrant eligibility for some of these benefits.

Family and Child Well-BeingDuring the debate over the 1996 reforms, some argued that children would behelped by the new policies while others argued that children would be harmed.Advocates argued that the new policies would increase income and that workingmothers would provide better role models for their children. Opponents arguedthat children would be harmed if mothers lost eligibility for welfare benefits andcould not find jobs or if mothers worked but lacked adequate child care. Like otherresearchers, we find relatively few changes in family or child well-being over time.

• Families’ material well-being remained fairly constant over the 1997 to 2002period, though a few indicators improved for recent welfare leavers and worsenedfor nonwelfare families. More recent leavers owned homes and fewer experiencedfood insecurities in 2002 compared with 1997. In contrast, home and car owner-ship decreased and crowding and food insecurity increased among nonwelfarefamilies. The results suggest a better picture of well-being for recent leavers thanshown through the income and poverty measures but mirror the deterioratingincome picture for some families without welfare experience.

• Measures of well-being among young children (age 6 to 11) remained fairly con-stant for the current welfare and recent welfare groups, while school engagementand participation in activities outside of school declined for young children in thenonwelfare group. While few changes in well-being occurred among older chil-

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dren (age 12 to 17), the incidence of school expulsion decreased among childrenin families on welfare. School engagement and expulsions increased among chil-dren in families with no welfare experience.

• Reports of parent aggravation indicate increased stress among recent welfareleaver families. Three times as many parents with young children reported beingaggravated in 2002 than in 1997, but no changes in aggravation occurred amongfamilies in the current or nonwelfare groups. Aggravation among parents of teensremained constant for all three groups. The result suggests the struggles that for-mer welfare recipients, usually single parents, may face when working and arrang-ing child care for young children.

DisconnectedAs many states turned their attention to groups of recipients having a harder timemaking the transition to work—recipients with multiple barriers to work, thosenearing the time limit, and sanctioned families—it became clear that there was agroup of families that leave welfare but do not find work and remain “disconnected”from both the labor market and the welfare system. This group—those withoutcash welfare or disability benefits, current or recent work, or a working spouse—represents families with some of the greatest barriers to work and at highest risk forsevere economic hardship. While we often think of the disconnected relative to for-mer welfare receipt, many families that have never been on welfare can also bedefined as disconnected.

• In 2002, one in five former welfare recipients was “disconnected.” These formerrecipients are significantly more disadvantaged than other leavers, with lowerincome, a greater number of barriers to work, and a higher likelihood of foodinsecurity.

• About 12 percent of families that have never received welfare were disconnectedin 2002. They face levels of disadvantage similar to disconnected welfare leavers,including similar barriers to work, low incomes, and material hardships. How-ever, fewer disconnected families without welfare experience receive food stamps,housing assistance, and Medicaid than disconnected former welfare families. Lack-ing any connection (current or past) to a welfare system that might provide assis-tance, these families may face the greatest risk.

ImplicationsThe changing circumstances of low-income families most likely affected by new wel-fare reforms suggest some good news, some concerns. More single parents havejobs, including some on welfare and some with apparent employment barriers suchas poor health and limited education. Deep poverty declined among families on

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welfare (although this result at least partially reflects the steeper declines in welfareparticipation among those in traditionally low-benefit states). Families that hadrecently left welfare or that had remained off welfare had other government worksupports such as help paying for child care, health insurance, and food stamps moreoften in 2002 than in 1997. Real wage rates improved among workers in all threelow-income groups.

However, the results also indicate the precarious lives of families in our low-income sample. Significant declines in employment among recent welfare leaversand nonwelfare families between 1997 and 2002 highlight the sensitivity of thelow-wage labor market to economic forces. Substantial shares of families on welfareand those that recently left welfare live in poverty, and many live in deep poverty.Families also report high levels of stress such as difficulty paying for food and otherbills. While some improvements occurred in these qualitative measures of materialwell-being for recent welfare leavers, the percentage of these parents reporting highlevels of aggravation tripled between 1997 and 2002, indicating the struggles ofmostly single parents attempting to make it without welfare.

The results also suggest some perhaps surprising concerns about low-incomefamilies outside the welfare system. Cash income deteriorated and deep povertyincreased among single parents in the group of families remaining independent ofwelfare between 1997 and 2002. Also, compared with recent welfare leavers, rela-tively few of these families receive work supports such as food stamps and help pay-ing for child care to supplement their wages. About 1 in 10 of these families remainsdisconnected from work or cash government assistance. Policymakers need to reachout and deliver work supports to low-income families outside the welfare systemand ensure that new welfare policies do not discourage the neediest families fromreceiving temporary cash assistance.

These concerns argue for continued evaluation of this new safety net system.States now face new challenges to meet tougher work participation requirements inthe reauthorized welfare program. They must find a way to balance efforts to increasework among current participants with continued efforts to address the needs of thehardest to serve families in their caseloads and to provide work supports to welfareleavers and low-income families not on welfare. Reauthorization likely will define anew chapter in the evolving story of welfare reform.

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1. As explained in the paper, we further restrict our sample to families with adults who are parents andnot receiving Supplemental Security Income (a means-tested disability program). These restrictionsexclude families unlikely to be affected by welfare policies.

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The Changing Role of Welfare in the Lives of Low-Income

Families with Children

In February 2006, Congress reauthorized the landmark welfare programs enactedalmost a decade earlier. While the new legislation substantially increased workrequirements for states’ welfare caseloads and imposed new restrictions on whatcounts as work, it otherwise reaffirmed the 1996 law. Congress retained the fixedblock grant funding, the five-year lifetime benefit time limit, and the flexibility stateshave to implement their welfare programs within broad federal guidelines.

Reauthorization presents a good time to take stock of what we know about howwelfare reform transformed support for low-income families. The original legisla-tion led to considerable speculation about how states would respond to the newrules and how low-income families would be affected. Some speculated that stateswould reduce their financial commitment to welfare. Others questioned whethermothers on welfare would be able to get jobs, whether the remaining caseload wouldgrow increasingly disadvantaged, and whether time limits would lead to increasedchild poverty.

Various studies addressed many of these core questions over the past decade.Our own studies reported outcomes for families that left welfare and families remain-ing on welfare using the National Survey of America’s Families (NSAF) conductedin 1997, 1999, and 2002. This survey was designed to monitor devolution of socialpolicy from the federal to the state governments and included a set of questionsspecifically focused on families with welfare experience. Loprest (1999) providedthe first national picture of work and other outcomes for families that left welfarebetween 1995 and 1997. She provided a comprehensive follow-up status report forfamilies leaving welfare between 1997 and 1999 and some snapshots of outcomesfor families that left welfare between 2000 and 2002. Similarly, Zedlewski (1999)provided the first national picture of families on welfare in 1997, and subsequentpapers updated the information for families in 1999 and 2002.

This study uses the three rounds of the NSAF to comprehensively review thestatus of families moving in and out of welfare during the 1997 to 2002 period. Weuse the data to describe the changing circumstances of families on welfare and thosethat left welfare during this time frame. We also describe the situations of familieswith similar incomes but no welfare experience.

Changes in welfare policy after reform had the potential to affect who stayed onwelfare, who exited welfare, who came on to welfare, and who did not come on.This means that all three groups of low-income families we study could be affectedby changes in welfare policy. In addition, all three groups can be affected by the

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economy and broader societal trends. Over time, changes for one group can influ-ence the composition of other groups of low-income families. Our results, there-fore, generally describe outcomes among low-income families most likely to beaffected by the evolution of the new welfare policies.

Most states implemented their new welfare programs sometime during 1997.While some states retained reforms implemented earlier through waivers from thefederal Aid to Families with Dependent Children (AFDC) program, we expect thatoutcomes in 2002 more fully reflect the effects of welfare reform than outcomes in1997.

We begin by reviewing the 1996 landmark legislation and the key literature todate on the effects of welfare reform. Then we describe the changing dynamics ofwelfare and changes in family structure, demographic characteristics, work and bar-riers to work, income, and family well-being, placing the outcomes in the contextof changing state and federal policies that occurred during the period. Our resultscannot describe the effects of particular state welfare policies or even link outcomesto welfare reform in general. Instead, the results show how low-income families onand off welfare were doing during this period. The results highlight some of thepositives of welfare reform and some of the concerns as states begin their seconddecade working with this new safety net.

Changing Policies and Knowledge about Their EffectsThe 1996 welfare reform legislation culminated a process begun in the early 1990s.The federal government had awarded many waivers to states to experiment withnew rules in their AFDC programs.1 By the time welfare reform was passed in 1996,27 states had major waivers in place (Blank 2002). Many states with waivers triedout more stringent work requirements, and some capped benefits for the family sizeat the time of enrollment so another child did not result in a higher benefit. Somestates had waivers to use temporary time limits in order to discourage long-termwelfare use, but none had permanent, lifetime time limits.

Evaluations of states’ waiver experiments generally confirmed that the largemajority of waivers designed to increase work (mandatory employment services,earnings supplements, and temporary time limits on welfare receipt) boostedemployment and reduced welfare receipt. However, most programs did not raiseincome (Bloom and Michalopoulos 2001). Also, increased parents’ work participa-tion had either positive or negligible effects on the well-being of children under age12 (Morris et al. 2001). The one concern raised by the state waiver programs isthat parents in mandatory employment programs reported somewhat worse out-comes for their adolescent children (Gennetian et al. 2002).

The success of states’ welfare experiments and the nation’s growing dissatisfac-tion with the current welfare program led Congress to enact sweeping changes towelfare and related programs in 1996. The Personal Responsibility and Work Oppor-tunity Reconciliation Act (PRWORA) of 1996 replaced the 60-year-old AFDC pro-gram with Temporary Assistance to Needy Families (TANF). The key features of

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TANF were the elimination of the entitlement to welfare and devolution of respon-sibility for welfare to the states through a system of fixed block grants. While stateswere free to develop their own policies toward work requirements, they were requiredto meet federally established work participation requirements for their caseloads.

States responded quickly to the new legislation, creating programs that varywidely across the country (Rowe and Giannarelli 2006). All states have strength-ened work requirements, but states vary in their use of incentives (such as an increasein the amount of earnings that can be retained while still receiving some cash assis-tance) and penalties (such as sanctions that eliminate benefits for families that donot comply with job search requirements) to accomplish this goal. While all statesmust comply with the prohibition against using federal dollars to pay benefits beyondfive years, some have shorter time limits and others guarantee some benefits beyondfive years with state monies. States also vary considerably in the rules governing howfamilies access cash assistance. Some emphasize diversion strategies that require sub-stantial proof of job search before assistance can begin or offer some short-termassistance in lieu of a monthly welfare check. Other states quickly enroll eligibleapplicants in TANF and job search programs.

PRWORA also included major changes in other income support programs forlow-income families with children. In addition to TANF, the legislation made majorchanges to Supplemental Security Income (SSI), food stamps, child support enforce-ment, and child care.2 PRWORA eliminated SSI benefits for some children, scaledback food stamp benefits, and eliminated food stamp and SSI eligibility for mostlegal immigrants. The legislation included provisions designed to reduce illegitimatebirths and to encourage marriage and the formation of two-parent families. It alsostrengthened states’ child support collection systems and increased money for childcare.

Congress enacted other changes to the safety net over time. The ban for all legalimmigrants was gradually softened. Congress quickly restored SSI eligibility for legalimmigrants who had been in the United States before PRWORA was enacted andreinstated food stamp eligibility for legal immigrant children and elderly and dis-abled immigrants who were in the country when PRWORA was enacted. In 2002,Congress restored food stamp eligibility for all legal immigrants after five years inthe United States. Congress also enacted the State Children’s Health Insurance Pro-gram (SCHIP) in 1997 to provide health insurance for low-income children.

All these changes and states’ responses to them potentially affect low-incomefamilies. The variability in states’ safety nets expands beyond TANF. Some states usetheir own funds to pay for food stamps for legal immigrants not eligible under fed-eral rules. States have enacted different eligibility standards for SCHIP eligibility.And states use their block grant funds to finance assistance for low-income familiesin various ways (Zedlewski et al. 2002). During this period, the economy also pro-foundly affected low-income families. Sustained growth in GDP and declining unem-ployment throughout the mid- to late 1990s provided the backdrop for largeincreases in employment. Between 1994 and 1999, the labor force participation rateof unmarried women with children increased 10 percentage points (Blank 2002).

These changes dramatically affected families on welfare and other low-incomefamilies requiring basic cash assistance. The most obvious and publicized outcome

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of these reforms was a dramatic decline in the welfare rolls. Caseloads were cut inhalf between 1996 and 2000 and continued to decline thereafter, although at amuch slower pace (Zedlewski and Williamson 2006). Caseloads dropped to about 2million families by 2004 (HHS 2005b). While there is some disagreement aboutthe relative importance of different factors in explaining the dramatic caseloaddecline, several studies concluded that the strong economy, welfare policy changes,and other federal policy changes designed to make work pay (such as an expandedEarned Income Tax Credit [EITC] and a higher minimum wage) all contributed tocaseload decline (Blank 2002; Besherov 2002).

Welfare reform generated numerous studies to investigate the effects on families.This national experiment was not accompanied by a major national evaluation of theeffects on families. Instead, researchers conducted analyses using different surveys,including some designed to address specific aspects of welfare reform or to examinethe effects of reforms in specific cities or counties and some nationally representativehousehold surveys regularly conducted by the Bureau of the Census.

Some important major lessons about the effects of welfare reform on familiescan be drawn from the post-reform studies. Below we briefly review the importantfindings from this body of work. We begin with an overview of two important syn-theses of the effects of reform that were published in 2002. Then we summarize thefindings of the post-reform welfare “leaver” and “stayer” studies conducted for theU.S. Department of Health and Human Services because they provide excellentcontext for the results we later present from the NSAF. Next we turn to findingfrom a few key studies published after the 2002 synthesis papers. The more recentstudies tend to focus on how particular aspects of welfare reform policies affectedwelfare dynamics. We restrict our literature review to syntheses and studies that pri-marily focus on outcomes for families. Additional studies address welfare reform andstate program implementation issues (for example, Blank and Haskins 2001 andWeil and Finegold 2002).

Syntheses of the Effects of Reforms in the 1990s Grogger, Karoly, and Klerman (2002) provide a comprehensive synthesis of theresearch on the effects of TANF legislation on several outcomes, including the wel-fare caseload, employment and earnings, use of other government programs, fertilityand marriage, household income and poverty, food security and housing, and childwell-being. The synthesis represents a knowledge base built on studies completedthrough 2001. The synthesis points out, as noted above, that many studies con-clude that welfare reform had a substantial effect on reducing the caseload, andnumerous studies show that welfare reform was at least partially responsible for theincrease in work and earnings among single mothers during the 1990s.

These authors conclude that welfare reform, at least as it had evolved through2000, appeared to produce impacts similar to those seen for mandatory work-relatedactivities with weak financial work incentives (similar to the waiver evaluations sum-marized earlier): a decline in welfare use and use of food stamps and an increase inemployment and earnings. For the most part, former recipients’ overall incomes didnot increase, as earnings replaced welfare and food stamp benefits. However, reforms

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with generous financial work incentives, such as large earned income disregards, didshow positive impacts on income. The authors also conclude that studies show bothpositive and negative effects of welfare reform on child well-being. Also, the evi-dence does not support any firm conclusions on the effects of welfare reform onmarriage, the effects of family caps on fertility, or the effects of particular welfarepolicies such as sanctions or time limits.

Blank (2002) critically reviews the economic evidence about the effects of wel-fare reforms enacted in the 1990s. She points out some key challenges in evaluatingthe effects of reform, including the difficulties in characterizing the policy environ-ment given the wide state variability in policies and implementation strategies andthe limitations of current survey data that fail to record many important aspects ofreform. Reviewing the voluminous literature examining the effects of reforms oncaseload change published through 2002, she concludes that state waivers and TANFhad significant negative effects on the size of welfare caseloads. She highlights thedifficulty in separating out the effects of welfare policy from the economic effectsand other policy changes, such as the expansion of the EITC, during this time frame.She also concludes that the literature shows some moderate increases in cash incomeand declines in poverty among less-skilled, single-mother families during the late1990s.

Blank argues that we need to experience economic cycles before economic effectscan be separated from welfare policy effects. We also need to investigate whethercertain states’ welfare strategies make their low-income citizens more or less vulner-able than others, and we need to learn more about the effects of reforms on fami-lies’ disposable income and long-term opportunities for income growth.

Post-Reform Welfare Leavers and Stayers The U.S. Department of Health and Human Services (HHS) provided grants to 15states and localities to survey families that left welfare during the 1997–99 period.Survey findings confirmed that the majority of those who left welfare had a job,although many did not have steady employment (Acs and Loprest 2001). Themedian result showed that 57 percent of leavers were employed in the first quarterafter leaving welfare, but only 30 to 40 percent of leavers worked in all four quartersof the year after leaving welfare. The surveys also showed that average earnings forwelfare leavers were relatively low and the eight sites that measured total incomefound that most family incomes remained below the poverty level after leaving wel-fare. The leaver surveys also documented that roughly half the families received foodstamps and Medicaid for the adults in the first quarter after leaving welfare.

HHS also sponsored surveys of welfare recipients in five states and the Districtof Columbia in 2001 to understand the circumstances and prevalence of barriers towork facing these families. Hauan and Douglas (2004) use the combined data fromall six surveys to describe the general prevalence of employment liabilities amongsingle TANF parents and to estimate the effects of these liabilities on work. Theauthors include human capital deficits (lack of a high school diploma, limited workexperience), health and well-being deficits (poor physical health, poor mental health,having a child with serious health problems, pregnancy, domestic violence or crimi-

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nal record issues), and situational difficulties (lack of transportation, lack of childcare, housing instability, neighborhood problems) in their analysis. The authors finda high prevalence (defined as occurring in 20 percent of the caseload or more) ofhuman capital deficits, situational difficulties, and certain health challenges (poorphysical and mental health, having a child with special needs) among the caseload.However, they also found that only human capital deficits, poor physical health,pregnancy, and child care problems significantly decreased employment. The authorsconclude that state welfare programs need to focus on building up employmentassets such as work experience and education to increase work among welfare recipi-ents.

Some Recent Key StudiesMany additional studies have been completed since the major syntheses describedearlier. The key studies reviewed below focus on more specific aspects of welfarepolicy. Several studies use longitudinal data sets to understand changes in welfaredynamics. Others highlight outcomes for disadvantaged groups and the effects ofwelfare on family structure.

Welfare Dynamics

Welfare reform has affected families’ decisions about whether to participate in wel-fare and when to leave. A report based on data from the Three Cities Study exam-ines how new welfare rules affect welfare entry (Moffitt and Winder 2003).3 Thisstudy confirms that in general eligible nonentrants (composed of low-income fami-lies that have never thought about applying for welfare, families that thought aboutapplying but did not, and families that applied but never entered the rolls for vari-ous reasons) tend to be better off financially than welfare entrants. In addition, thosein poor health or with a functional disability are less likely to enter TANF than thosein good health or without a disability, even after controlling for entry into the SSIprogram for low-income people with disabilities. The study also documents thatmost (77 percent) welfare applicants experience some type of diversion, includinggatekeeping policies and informal practices of social service agencies, kin networksthat discourage participation, and self-imposed diversion in response to time limits.Diversion practices discourage less-educated women from entering welfare morethan women with more education.

A study using data from the Fragile Families Study, which examined the parentsof newborns in 15 cities, investigates the connection between state policies and wel-fare use post PRWORA (Teitler, Reichman, and Nepomnyaschy 2004). Specifically,the authors ask whether mothers living in states with generous welfare paymentsand less restrictive time limits and work requirements are more likely to rely on wel-fare than mothers with similar characteristics living in states with less generous ben-efits and stricter requirements. The authors find that a significant proportion ofcity-to-city variation in TANF participation can be accounted for by state policies.Social and demographic factors, however, are stronger predictors of individuals’

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reliance on TANF than state policies. That is, most of the variability in reliance onTANF is within rather than between cities.

Acs, Ross Phillips, and Nelson (2005) use data from the Survey of Income andProgram Participation to compare welfare entry behavior in the pre– and post– welfare reform periods. Using regression models and decomposition techniques,they find that new welfare policies such as time limits, full-family sanctions, and fam-ily caps led to a drop in welfare entry rates during the 1990s. Neither changes in thecharacteristics of low-income single mothers nor improvements in the economydirectly accounted for the decline in entries. The authors find that declining entryrates were not accompanied by substantial improvements in the circumstances oflow-income single mothers not on welfare.

Grogger (2004) examines the role of time limits in the decline in welfare partic-ipation. He finds that being subject to time limits, even before exhausting eligibility,leads recipients to reduce their use of welfare by 6 to 7 percent. He finds that timelimits account for 12 to 13 percent of the decline in welfare use in the late 1990s.

Richburg-Hayes and Freedman (2004) examine the question of welfare cyclingthrough a reanalysis of MDRC evaluation data collected during the mid- to late1990s. The authors conclude that cyclers (defined as those receiving welfare in threeor more discrete spells during a four-year observation period) make up only a smallshare (8.5 percent) of the caseload. Cyclers are less disadvantaged than longer-termrecipients but more disadvantaged than short-term recipients in terms of theiremployment history and outcomes. The study also documents that the incidence ofcycling increased during the years following PRWORA, although the strong econ-omy during this period and new welfare policies both probably contributed to theincreased incidence of cycling.

Barriers to Employment and Disconnected Families

Some recent studies have focused on barriers to employment among welfare recipi-ents and welfare leavers living without welfare, work, or other cash governmentassistance. The Women’s Employment Study (WES) has been tracking welfare out-comes for a group of women in an urban county in Michigan. Danziger, Kalil, andAnderson (2000) report that about 20 percent of women on welfare in their samplehave multiple barriers to employment, and those with co-occurring human capital,mental health, and physical health problems have the poorest work outcomes. Heflin(2006) documents much higher levels of hardship across five waves of the WES thanin any single year. Reports of telephone disconnection and having unmet medicalneeds are common.

Researchers have also used the WES data to document the share of welfare leaverswithout visible means of support. Turner, Danziger, and Seefeldt (2005) report thatbetween February 1997 and August 2003, 9 percent of those who left welfare werewithout both work and welfare for more than one-quarter of the time. Comparedwith other welfare leavers and those who remained on the rolls, these “disconnected”women had lower economic status and a greater number of barriers to employment.

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As part of their evaluation of welfare reform in New Jersey, Wood and Rangara-jan (2003) find that about one in four former recipients in that state are not work-ing and off TANF in a given month; these families face substantially more materialhardship than working leavers. A smaller subset of this group, roughly 1 in 10 leaversin a given month, does not have a working spouse, recent work experience, or othersource of government income such as disability benefits or unemployment insur-ance. However, people move in and out of this status over time. Among this group,one in four is back on TANF 12 months later and a similar percentage is working.

Welfare and Family Structure

Various studies document a rise in cohabitation among low-income families subse-quent to welfare reform. Acs and Nelson (2004) use data from the 1997 and 1999NSAF to examine the effects of state welfare policies on living arrangements of low-income families with children. Results suggest that more effective child support col-lection and family cap policies correlate with declines in single parenting and increasesin dual parenting. The authors caution, however, that their findings apply to a two-year period early in the TANF era and, at best, represent short-term effects. Angeland colleagues (2002) as part of The Three Cities Study also report an increase inchildren living in two-adult families between 1999 and 2001. The authors find thatcohabiting arrangements accounted for nearly all of the increase in two-adult fami-lies. There was no change in the share of children living with their biological motherand father.

Bitler, Gelbach, and Hoynes (2006) use data from the Current Population Sur-vey to investigate the effect of changing welfare policies on the living arrangementsfor children from 1989 through 2000. They find “large effects” of welfare reformon living arrangements. Black and Hispanic children more often live with neitherparent or both parents and less often live with an unmarried parent since reformswere implemented. The results are more mixed for white children and include anunexpected, negative effect of welfare reform on the probability of living with a mar-ried parent. The authors caution, however, that they cannot understand which fea-tures of welfare reform led to the measured impacts and that reforms may simplyproxy for unmeasured differences across states rather than true policy responses.

Data and MethodsThe data used in this paper come from the National Survey of America’s Families, anationally representative survey of the civilian population under age 65 and its fami-lies. Three rounds of interviews were conducted in 1997, 1999, and 2002. Eachround included a cross-section of about 40,000 families, and each oversampled thelow-income population (family income below 200 percent of the federal povertylevel) and the population in 13 states. While most interviews were conducted overthe phone, in-person interviews were conducted to account for the population with-out telephones.4

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For the most part, interviews were conducted with the adult (usually the parent)most knowledgeable about the children in the family (the most knowledgeable adult,or MKA), so our analyses focus on this group. These adults, limited to persons age18 to 64, were asked key questions about their families’ history of welfare participa-tion. Respondents also were asked a full battery of questions about their family’sstructure and demographics, income (with details on sources of income), andemployment (both current and last year for the MKA and her/his spouse or part-ner). MKAs also were asked about their mental and physical health and answeredquestions designed to assess the well-being of their children. The NSAF also askedMKAs about their use of other government supports such as child care and foodstamps. In short, the NSAF data allow us to richly describe the circumstances oflow-income families.

We separate the sample into groups of families currently on welfare, those thatrecently left welfare, and those never on welfare despite having incomes similar tothose with welfare experience. Changes in the characteristics and circumstances ofthese three groups in the 1997 to 2002 period may have occurred as a result ofshifting welfare policy. Alternatively, changes may reflect changes in the generalsocial and economic environment.

Changes in welfare policy may directly affect families never on welfare and leadto compositional changes in the three groups. For example, the strong work mes-sage may increase employment among single mothers never on welfare, and diver-sion and time limit messages may lead some to avoid welfare enrollment. In addition,factors that encourage exits from welfare can lead to a change in the composition offormer recipients. Generally, when changes appear in the welfare population but notamong families with no welfare history, this suggests some response to the new wel-fare rules. When changes occur in all three groups, however, associations betweenoutcomes and welfare policy become more complicated. We must be mindful ofthese effects when interpreting our results.

The three groups are defined as follows:

1. The “current welfare recipients” group includes all individuals that report receiv-ing TANF benefits at the time of their interviews. For some purposes, we furtherbreak these current recipients into three subcategories based on their welfare his-tories: “entrants,” who first entered welfare in the past two years; “cyclers,” whofirst received welfare more than two years ago but have received it intermittentlyover the past two years; and “stayers,” who first received welfare more than twoyears ago and have received it continuously for the past two years.

2. The “recent welfare leavers” welfare group includes those not receiving TANF atthe time of their interview, but who report having left TANF at some point inthe last two years.5

3. The “nonwelfare” comparison group includes MKAs that report never havingreceived TANF or AFDC benefits in their adult lives.

We further restrict all three groups to families with low incomes in which theparent is potentially eligible for TANF. Since much of our analysis focuses on workparticipation of the MKAs and family circumstances under welfare reform, we wantto limit our sample to families where adults are most likely to be affected by welfare

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policies. We therefore exclude adults who are not parents of the children in the fam-ily and parents who report receiving Supplemental Security Income (SSI) for them-selves (and are therefore ineligible to receive TANF).

In addition, we limit our sample to low-income families to establish greater com-parability across groups. Because our “nonwelfare” comparison group is defined inlarge part based on income, we wanted our current and former welfare recipientgroups to be subject to the same income cut-off. We define low-income as havingincome below 200 percent of the federal poverty level either last year or in the cur-rent year and not above 250 percent of the poverty level in either period.6 We usecurrent and prior-year income because neither current nor past-year income aloneprovides us with a consistent definition of low-income across the three groups. Cur-rent recipients for the most part meet a current low-income threshold, but they mayhave had higher incomes in the prior year. On the other hand, former recipientsreceiving welfare last year would have low incomes in the prior year, but they couldhave high incomes in the current year. These income restrictions confine all threesample groups to families with consistently low incomes.

Table 1 shows the effects of the sample restrictions and final sample sizes for thethree comparison groups in the three rounds of the NSAF. As would be expected,the sample restrictions have different effects across the groups. The exclusion offamilies where the MKA is not the parent of the children or is on SSI had a rela-tively larger effect on the current welfare groups because these are two importantreasons for children’s welfare eligibility. About 17 percent of the 1997 current sam-ple and 27 percent of the 2002 current sample were excluded for these reasons.7The income screens eliminated about 3 percent of current welfare recipients and 12percent of recent welfare recipients in 1997 and 9 percent of recipients and 19 per-cent of recent leavers in 2002. The income screen was the primary restriction thatestablished the nonwelfare comparison group.

It is clear from this table that the sample restrictions influence the three groupsdifferentially across time. The impact of our income restrictions is to limit the growthin variation in income within each group over time. Thus, the results for changesover time reported here could vary compared to analyses with no income screen onthe welfare groups. We completed most analyses in the paper with and without theseincome screens, however, and found they did not significantly affect the character ofthe results over time. The main difference in analyses with and without an incomescreen is the results on the distribution of income and poverty. A subset of results,including income and poverty, for the sample without restrictions is presented inappendix A.

Changing Welfare CaseloadAs noted earlier, the dramatic decline in welfare caseloads generated considerableattention and was used by many as a signal of the success of welfare reform. Case-loads were cut in half between 1996 and 2000 and continued their decline duringthe 2001 recession, although much more slowly (figure 1). The number of familiesreceiving cash benefits decreased from about 4.6 million in 1996 to roughly 2 mil-

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lion families in 2002. As described earlier, research studies attribute the decline topolicy changes in the early 1990s that increased the financial incentives to work(especially the 1993 expansion of the EITC), the strong economy in the late 1990s,and welfare reform.

The number of child-only cases increased as a share of the caseload over time.Child-only cases arise when the parent or adult caretaker is ineligible for TANF, butthe children are eligible for benefits. About half the child-only cases involve childrenliving apart from their parents (usually with a caretaker relative who has sufficientincome to not receive assistance), about one-fifth are families in which the parent ison SSI, and about one-fifth are families in which the parent is ineligible for TANFbecause of citizenship status.8 Child-only cases made up 21.5 percent of the TANFcaseload in 1996 and 36.6 percent of the caseload in 2002. The number of child-only cases has been relatively stable since 1997, but over time it represents a grow-ing share of a declining total caseload. As described earlier, we exclude mostchild-only welfare families from our analyses because the adult in these units is notsubject to work requirements and the children are not subject to time limits or otherwelfare policies.

Caseload decline can occur because more families leave welfare, fewer familiesenroll in welfare, and fewer families that leave welfare return. State policies, the

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Table 1. Effects of Sample RestrictionsCurrent Recent No

recipients leavers welfare All

1997

Base sample: Families with children 1,831 1,290 15,585 18,706

Families without TANF-eligible adults:

No parent -183 -45 -322 -550

Parent on SSI -126 -43 -160 -329

Income screen: income less than 200% of federal poverty level this year or last year and never above 250% in either year -64 -153 -8,610 -8,827

Unweighted sample 1,458 1,049 6,493 9,000

Weighted sample 1,845,921 1,168,596 7,606,016 10,620,533

2002

Base sample: Families with children 806 732 18,029 19,567

Families without TANF-eligible adults:

No parent -103 -32 -392 -527

Parent on SSI -118 -26 -268 -412

Income screen: income less than 200% of federal poverty level this year or last year and never above 250% in either year -55 -137 -11,846 -12,038

Unweighted sample 530 537 5,523 6,590

Weighted sample 840,445 718,457 7,715,358 9,274,260

Source: Sample of low-income working-age parents from the 2002 and 1997 National Survey ofAmerica’s Families. See text for sample definition.


economy, and family choices all affect these trends. The TANF participation rate—the share of eligible families enrolled in the program—dropped from around 80 per-cent in 1996 to 48 percent in 2002 (HHS 2005a, II-19). Participation in AFDC,TANF’s predecessor, stayed fairly steady at about 85 percent during the early 1990s.

Such factors as the economy, benefit levels, program requirements, and stigmaaffect participation rates. States’ program requirements changed markedly with theadvent of TANF. Most states use some type of diversion strategy, by offering appli-cants a one-time cash payment in lieu of program enrollment, requiring documenta-tion of extensive job searches before allowing enrollment, or both. Time limits alsocan discourage participation because families want to save benefit eligibility for moredesperate times, and work requirements can discourage participation because fami-lies may prefer finding work on their own terms. On the other hand, the more gen-erous earned income disregards adopted in many states allow families to keep moreearnings while receiving reduced welfare benefits and thus encourage participation.

The NSAF data provide some insight into changing welfare dynamics and thecontext for understanding changes in welfare status over time. We compare welfaredynamics for the two-year period around the passage of welfare reform, 1995 to1997, to a more recent two-year period, 2000 to 2002. Figure 2 shows the status in1997 and 2002 of parents on welfare in our sample at any point during the relevantprior two-year period.9

More than one-third (39 percent) of those receiving welfare benefits sometimeduring the 1995 to 1997 period no longer received benefits at the time of theirinterview in 1997. An even larger share (46 percent) of those receiving benefits dur-ing the 2000 to 2002 period no longer received benefits at the time of their inter-

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4,873

4,553

4,058

3,176

2,648

2,2692,120 2,060

35.3%a32.7%a29.1%23.4%22.7%21.5%18.9%

1995 1996 1997 1998 1999 2000 2001 2002

Fiscal year

Monthly average caseload (thousands)Child-only cases as a percentage of caseload

36.6%a

Source: U.S. Department of Health and Human Services (2005b).a Excludes cases with a sanctioned parent.

Figure 1. Trend in Caseload and Child-Only Cases, Fiscal Years 1995–2002


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view in 2002. As shown in the caseload statistics above, far more families left welfarein the early years of implementation than later. Nonetheless, the NSAF data indicatethat the rate of leaving increased between the two periods shown.

Figure 2 also shows the change in composition of the caseloads between 1997and 2002. It divides the caseload into three groups: entrants (those who first startedreceiving welfare in the past two years); cyclers (those who left and returned to wel-fare in the past two years); and stayers (those who started receiving welfare morethan two years ago and remained on the caseload for all of the past two years).10 In2002, the caseload of adult recipients is made up of a little more than one-thirdentrants, a little less than one-quarter cyclers, and a little over two-fifths stayers. Amuch greater share of the caseload in 2002 is new entrants than in 1997, and amuch smaller share is stayers. While the percent of all recent welfare recipients whoare cyclers (those on welfare during the two-year period who left and returned) isthe same in both time periods (23 percent), this group as a percentage of all leaversis smaller in 2002. That is, the likelihood of returning to welfare for all who left in

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A. On welfare at any time during 1995 –97 period

Off39%

On61% Cyclers

23%

Stayers68%

Entrants9%

B. On welfare at any time during 2000–02 period

Off46%

On54%

Entrants35%

Stayers42%

Cyclers23%

Status in 2002

Status in 1997

Source: Sample of low-income working-age parents from the 2002 and 1997 National Survey of America’sFamilies. See text for sample definition. Notes: Welfare status applies to working-age adults who are parents of children on welfare and not on SSI. These are adults typically subject to work requirements.

Entrant = entered welfare for the first time in period indicated. Stayer = on welfare throughout period. Cycler = left and returned during the period indicated.

Figure 2. Changing Caseload Dynamics (Working-Age Low-Income Adults)


the early period was 25.8 percent, but this fell to 20.7 percent in 2002. So not onlyare there a greater percentage of leavers, but the rate of return among leavers fellover time.

These changes in the caseload provide important context for considering theeffects of welfare policy and characteristics of the caseload. Our results show thecomplexity of welfare dynamics. While the entire caseload shrank, families continuedto enter the welfare rolls (although at a lower rate) and exit rates increased, leavinglonger-term stayers as a smaller proportion of the caseload. The different flows ofpeople into and out of the caseload should be kept in mind when assessing the char-acteristics of the three comparison groups. They especially will be highlighted in ourlater discussion of the changing characteristics of welfare caseloads.

Family Structure and DemographicsTANF gave states broad flexibility to define eligibility rules for different types offamilies with one exception: states had to require that teen parents live in supervisedsettings, with either their parents or other responsible relatives. The new TANFrules also changed the treatment of immigrant families and gave states more flexibil-ity to implement policies that attempt to affect fertility decisions. These shifts inpolicies could affect family eligibility for welfare and family decisions to participatein welfare.

Family StructureFederal AFDC welfare rules generally required states to limit eligibility for two-parentfamilies and to allow eligibility for teen parents as separate families. They alsoincluded a complex set of rules about how states should treat the income and eligi-bility of stepparents and cohabiting adults. Most states took advantage of TANF’snew flexibility to change these rules, generally following a pattern toward simplerand more neutral treatment of different family situations, a trend that began in manystates during the waiver era.

Some specific welfare rule changes that could affect family structure include thefollowing:

• States generally no longer treat two-parent eligibility different from single-parenteligibility.

• States now all require unmarried teen parents (usually defined as under age 18)to live with their parents or in another supervised setting.

• About half the states now require that stepparents be included in the unit apply-ing for welfare benefits; the other half only take into account the stepparents’income and not their needs when determining eligibility.

• States also are divided in terms of whether they include nonparent cohabitors inthe welfare unit. (Depending on whether cohabitors have personal income, of

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course, including them in the welfare unit could either reduce or increase benefiteligibility.)

All else equal, the new welfare rules move in the direction of broadening two-parent family eligibility, reducing eligibility for families with cohabitors and steppar-ents (because income is more often considered), and disallowing teen, single-parentTANF eligibility. Of course, other TANF rules could also affect families’ participa-tion decisions. For example, new federal rules require states to meet a 90 percentwork participation requirement for two-parent families and a 50 percent work par-ticipation requirement for one-parent families. States use several strategies to imple-ment these requirements that could deter two-parent families from applying forbenefits.

Changes in social messages also could affect low-income families’ living arrange-ments and decisions to participate in welfare. Some states began marriage promo-tion and education programs in the late 1990s to complement their new welfareprograms. These initiatives focused on the benefits of healthy marriages for the well-being of children.

Relatively few marital status changes occurred between 1997 and 2002, andchanges do not reflect what might be expected as a result of changes in welfare pol-icy. The marital status distribution for current welfare recipients remains about thesame (table 2). However, larger shares of both recent leavers and nonwelfare fami-lies are never married in 2002 than in 1997 (49.2 percent compared with 39.1 per-cent and 20.9 compared with 13.1 percent, respectively). This change for recentleavers, however, is accompanied by a significant decline in divorced or separatedparents (23.0 percent compared with 31.5 percent), while the change for the non-welfare families is accompanied by a significant decline in currently married families(54.7 percent compared with 63.6 percent).

As would be expected, living arrangements differ significantly across the com-parison groups (table 3). For example, welfare recipients in 2002 are more likely tobe cohabiting and less likely to be married than recent welfare leavers, but bothgroups have similar shares living as single parents. Also, current and recent welfare

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Table 2. Marital Status, 1997 and 2002 (weighted percents)2002 1997

Current Recent leaver No welfare Current Recent leaver No welfare

Married 12.0A,B 26.8B 54.7† 14.7A,B 28.4B 63.6

Previously marriedWidowed 1.4 1.1 1.6 1.2 1.0B 2.0Divorced/separated 30.3B 23.0 † 22.6 35.2B 31.5B 21.3

Never married 56.4B 49.2B,† 20.9† 48.5A,B 39.1B 13.1

Source: Sample of low-income working-age parents from the 2002 and 1997 National Survey of America’sFamilies. See text for sample definition. Note: Percentages may not add to 100 because of omitted “missing” category.A Significantly different from recent leavers at the 90% confidence interval.B Significantly different from those with no welfare experience at the 90% confidence interval.† Significantly different from 1997 at the 90% confidence interval.


leavers are about twice as likely to be living as single parents, either alone or withother adults, as families without a welfare connection.

Comparisons across time show some significant changes in family structure, butonly for current welfare recipients and the nonwelfare groups.11 Current welfarerecipients and nonwelfare families are almost twice as likely to include a cohabitingadult in 2002 than in 1997.12 Since the shift in cohabitation occurs for the nonwel-fare group as well as current recipients, we cannot attribute the result to welfare pol-icy.13 There also is a significant, corresponding decline in the share of nonwelfarerecipients living as married couples in 2002 compared with 1997 (41.1 percent and51.0 percent, respectively) mirroring the trend in marital status discussed above. Incontrast, the shift toward cohabitation among current recipients seems to be accom-panied by a drop in the share of single parents living alone (46.3 percent in 2002compared with 54.5 percent in 1997).

DemographicsWelfare reform also enacted legislation likely to affect the demographic compositionof the caseload. Most important were changes defining immigrant eligibility. Underfederal AFDC law, legal immigrants were eligible for benefits. PRWORA enacted afive-year ban on federal TANF assistance for legal immigrants who arrived in thecountry on or after August 22, 1996. States can use their own funds to provide ben-efits to this group; they also can disqualify some or all immigrants for a period longerthan the federal minimum.

Other changes could also affect family demographics. Federal AFDC lawincreased benefits when a child was born to a family on welfare and exempted moth-ers with children under 3 years old from work requirements. Some states, however,had waivers called “family caps” that prohibited additional benefits when a child was

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Table 3. Living Arrangements, 1997 and 2002 (weighted percents)

2002 1997


Single alone 46.3B,† 43.9B 22.2 54.5A,B 41.9B 20.8Single with others 28.7B 22.6B 13.9† 24.5B 21.9B 10.6

Adult child 5.4 4.6 4.7 6.1 4.5 4.1Nonrelative 5.8A,B,† 2.3 1.6 2.8B 1.7 1.2Relative 17.5B 15.8B 7.7† 15.5B 15.7B 5.3

Married 11.8A,B 26.6B 54.6† 14.6A,B 28.4B 63.5Married alone 9.1A,B 19.3B 41.1† 11.7A,B 23.3B 51.0Married with others 2.7A,B 7.3B 13.5 2.9B 5.1B 12.5

Cohabiting (all) 13.2A,† 7.0 9.1† 6.2 7.8 5.1

Source: Sample of low-income working-age parents from the 2002 and 1997 National Survey of America’sFamilies. See text for sample definition. Note: Percentages may not add to 100 because of omitted “missing” category.A Significantly different from recent leavers at the 90% confidence interval.B Significantly different from those with no welfare experience at the 90% confidence interval.† Significantly different from 1997 at the 90% confidence interval.

born on welfare, and many had enacted rules requiring mothers with young chil-dren to participate in work requirements. Federal TANF rules are silent on familycaps, leaving this decision up to the states, but the new rules require states to atleast include mothers with children age 12 months and older when calculating theirwork participation rate.

States vary considerably in how they responded to the new legislation:

• Some (18) states use their own funds to provide benefits to legal immigrants inthe country less than five years.14

• Most states (40) exempt mothers with children under 1 year old from workrequirements.

• Less than half (21) the states have family caps.

Some significant changes occurred in the immigrant status and racial/ethniccomposition of the low-income population between 1997 and 2002 (table 4). For-eign-born noncitizens and naturalized U.S. citizens make up larger shares of boththe current and the nonwelfare groups in 2002 compared with 1997. They accountfor 11.3 percent of the current caseload in 2002 compared with 6.6 percent in 1997and they make up 24.4 percent of the nonwelfare group in 2002 compared with 15percent in 1997. On the other hand, foreign-born noncitizens do not make up alarger share of the recent leaver group. These results reflect the general increase inforeign-born noncitizens in the United States during this period (Migration PolicyInstitute 2004), but the lack of a similar increase in the share of foreign-born nonci-tizens among welfare leavers may also suggest a group less likely to leave welfareonce they enroll.

The share of recent immigrants (arriving less than five years ago) in the nonwel-fare group increases from 17.6 to 26 percent between 1997 and 2002, while theshares of recent immigrants in the current welfare and recent leaver groups actuallydecline, although the declines are not statistically significant. New policies that pro-hibit eligibility for recent immigrants in some states could explain the declines inrecent immigrants in the welfare groups relative to the nonwelfare group. The resultsalso show that immigrants in the United States for five or more years account forthe vast majority of foreign-born noncitizens on welfare.

The racial and ethnic composition of the three groups reflects the changes inimmigrant composition. Hispanics make up significantly larger shares of both thecurrent and nonwelfare groups in 2002 than in 1997 (30.8 and 33.7 percent, respec-tively, in 2002 compared with 24.3 and 25.4 percent in 1997). Also, significantlylarger shares of current recipients and nonwelfare families completed their interviewsin Spanish in 2002 than in 1997. On the other hand, neither the share of Hispanicsnor the share of interviews in Spanish among recent leavers changes significantlybetween 1997 and 2002.

While the rise in Hispanics among both the current welfare and the nonwelfaregroups probably reflects a greater share of Hispanics in the low-income populationgenerally, the fact that a similar increase does not occur among recent leavers seemsto suggest that Hispanics are less likely to leave welfare than those in other ethnicgroups.


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Table 4. Demographic Characteristics, 1997 and 2002 (weighted percents)2002 1997

Recent No Recent NoCurrent leaver welfare Current leaver welfare

Immigrant statusa

U.S.-born citizen 84.1B,† 94.6B 69.5† 92.2A,B 95.0B 81.7Foreign-born naturalized

U.S. citizen 4.6A,† 0.7B 6.1† 1.2B 1.2B 3.3Foreign-born noncitizen 11.3A,B,† 4.7B 24.4† 6.6A,B 3.8B 15.0

Of the foreign-born:Immigrated 5 or more

years ago?a 89.6B 95.2B 74.0† 81.7 92.7B 79.8Immigrated less than

5 years ago?a 10.4B 4.8B 26.0† 14.6 6.9B 17.6

Spanish speaking 10.9A,B,† 4.8B 24.4† 6.5B 5.0B 18.4

Race/EthnicityHispanic 30.8A,† 15.1B 33.7† 24.3A 16.9B 25.4Black, non-Hispanic 35.4B 35.5B 16.0† 32.3B 28.6B 12.9Other, non-Hispanic 33.8A,B,† 49.4 50.2† 43.5A,B 54.5B 61.7

RegionNortheast 14.3B 12.3B 18.2 17.0† 8.7B 19.7Midwest 21.8 22.9 18.7 23.0B 27.5B 17.5South 25.9A,B 47.1B 39.6 29.1A,B 43.7 39.3West 38.0A,B,† 17.7B 23.5 31.0A,B 20.2 23.5

Age of MKA< 25 28.4B 26.4B 15.1 24.0B 27.6B 14.425–34 36.1A,† 45.0B 38.9 44.1B 45.0 39.835+ 35.5B 28.7B 46.1 32.0B 27.4B 45.8

Education level of MKALess than high school 41.5B 33.5 28.9† 39.8A,B 30.1 25.3GED or high school diploma 39.2 41.8 37.3 36.9 39.3 39.6Some college 15.8A,B,† 22.6 25.3 20.7B 23.9 25.9College degree 2.9A,B 1.2B,† 7.4 2.2A,B 6.1 8.7

Number of children1 child 25.9B 26.8 30.5 23.0B 27.8 30.92 children 28.4B 33.3 35.2 34.8 37.1 37.63 or more children 45.7B 40.0 34.3† 42.3A,B 35.1 31.5

Age of youngest childUnder 1 year 18.3 14.4 14.2 15.8 11.1 13.11–4 years 39.5A 48.5B 37.9 44.2A,B 53.0B 36.15–11 years 29.8 27.5 31.8† 28.6B 28.0B 34.512+ years 12.5 9.6B 16.1 11.4B 7.9B 16.4

Source: Sample of low-income working-age parents from the 2002 and 1997 National Survey of America’sFamilies. See text for sample definition. MKA = most knowledgeable adultNote: Percentages may not add to 100 because of omitted “missing” category.a Estimates, there are slight differences in questions between 1997 and 2002.A Significantly different from recent leavers at the 90% confidence interval.B Significantly different from those with no welfare experience at the 90% confidence interval.† Significantly different from 1997 at the 90% confidence interval.


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The geographic distribution across the three groups most likely reflects differ-ences in welfare policies and economic environments. Current recipients more oftenlive in the West than other regions, while recent leavers more often live in the South.The regional distributions of the three groups did not change between 1997 and2002 except for an increase in the share of current recipients living in the West. Cal-ifornia accounts for the largest share of the current caseload in the West. The factthat California provides a relatively generous TANF benefit, allows immigrant eligi-bility, and has no time limit probably explains the growing share of welfare recipi-ents in the West. There are no changes in the regional distribution of the nonwelfaregroup during this period.

Relatively few changes in personal characteristics occurred among the threegroups between 1997 and 2002 (table 4). A greater share of the current welfaregroup falls in the 25 to 34 year age group in 2002 than in 1997, but there are nochanges in the age distributions of the recent leaver or nonwelfare groups. Also,there are few changes in the number or age distribution of children in the familyover time for the three groups. More families without welfare experience have threeor more children in 2002 compared with 1997 (34.3 compared with 31.5 percent),but this trend does not occur among either current welfare families or recent leavers.The result could reflect the increasing share of immigrants who tend to have largerfamilies among the nonwelfare group. There are no changes in the ages of childrenfor either the current or former welfare groups over time.

Similarly, there are few changes in the educational attainment of three groupsover time. Relative differences in education across the three groups remain constantover time. For example, current welfare recipients are less likely to have finishedhigh school (41.5 percent) than the nonwelfare group (28.9 percent), and they aremuch less likely to have completed some college (15.8 percent) than either therecent welfare (22.6 percent) or the nonwelfare group (25.3 percent). Recent leaversfall somewhat in the middle of these two groups with few significant differencesbetween them and either the current or nonwelfare group. The education level ofthe nonwelfare group declines slightly over time; 28.9 percent have less than a highschool education in 2002, compared with 25.3 percent in 1997.

WorkFederal welfare reform legislation introduced numerous changes that pushed statesto increase their emphasis on work and granted states flexibility to institute morework-focused policies. These changes followed a handful of states with federal waiversthat had pioneered a “work first” approach to welfare, putting high priority on ini-tial job search and moving recipients quickly into unsubsidized jobs.

The 1996 law promoted work in several ways. It mandated that states meet fed-erally set work participation requirements. The requirement for the entire caseloadincreased each year to a final level of 50 percent in 2002. States were given theoption of excluding a limited set of cases for the purposes of the requirement, includ-ing recipients with children under age 1. States not meeting these goals faced afinancial penalty. However, the law also allowed states to count caseload decline

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since 1995 toward the goal. This allowance, known as the caseload reduction credit,and the unprecedented declines in caseloads meant that, in the end, few states hadtrouble meeting the overall caseload participation requirements.15 The federal legis-lation also defined the set of activities that states could count toward the workrequirement. This list limited states’ use of education as a work activity by not allow-ing most education to count toward the first 20 hours required and by consideringonly education directly related to employment. It also limited the counting of jobsearch and job readiness activities to at most six weeks.

The federal legislation also required states to sanction individuals not meetingwork requirements. States have considerable flexibility to set these sanctions anddevelop exceptions (such as good cause exemptions), and as a result sanction poli-cies vary considerably. For the first time without a waiver, states could implementfull-family sanctions, that is, cutting the entire benefit until compliance or for someminimum period. Finally, federal welfare law limited receipt of federal benefits tofive years in the hope that this would signal the temporary nature of welfare receiptand provide an incentive for recipients to go to work. States were given the flexibil-ity to institute shorter time limits. Federal legislation allowed for an exemption tothe time limit of 20 percent of the caseload.

Most state and local welfare programs initially used the increased flexibility fed-eral legislation provided to implement “work first” policies. Over the first five yearsof reform, many states moved toward a mix of policies combining a work-first focuswith more education and training or a greater focus on identifying and reducingrecipient barriers to work (Holcomb and Martinson 2002). Some of the work-focused actions states took include

• aggressive “front-door” policies, which require new recipients to quickly partici-pate in job search and other work activities;

• very limited exemptions to work participation or policies of “universal engage-ment” to get all participants into work-related activities; and

• increased earning disregards, allowing recipients to keep a greater amount of theirearnings while still receiving benefits.

In addition, some states used federal flexibility to impose strict sanctions, includ-ing full-family sanctions and benefit time limits shorter than the federal 60 months.Other states eliminated time limits by pledging to use state funds to continue bene-fits for families reaching federal limits. As an additional incentive to work, somestates introduced state earned income credits. States adopted different combinationsof these and other policies to encourage and require work among recipients.

Employment Outcomes Work among current welfare recipients has increased considerably since welfarereform but has declined somewhat for those not on welfare. The percentage of wel-fare recipients currently working any amount of hours increased from 20.9 percentin 1997 to 29.2 percent in 2002 (figure 3). This compares to a decline in employ-ment over the same period among those not on welfare, from 55.5 percent to 51.1percent. Employment among recent leavers over this period also declined slightly.The increase in employment for current recipients occurred mainly between 1997

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and 1999. This is consistent with the strong “work first” approach by welfare pro-grams. The flat or slightly declining employment rates for all three groups between1999 and 2002 reflect in part the cooling off of the labor market over this time.

Employment increases for welfare recipients over the entire period are evenstronger when considering only single-parent recipients. From 1997 to 2002,employment for this group rose from 20.3 percent to 33.3 percent (table 5). Formarried and cohabiting recipients, employment did not increase over this time, evenwhen considering work of either adult. This seems contrary to expectations givenhigh federal work participation rates for two-parent families. However, there weregains in employment for this group between 1997 and 1999 followed by substantialdeclines in employment between 1999 and 2002 (shown in appendix B). The resultalso could reflect a change in the composition of the married/cohabiting welfarerecipient group. That is, given stricter work requirements, married couples on wel-fare in 2002 may generally be more vulnerable than those on in 1997.

Employment among former welfare recipients is higher than among women whohave not received welfare (figure 3). This difference is mainly due to the fact thatmore former recipients are single than those who have not received welfare (shownearlier), and employment among single women is much higher than among marriedor cohabiting women. Employment of single women is not significantly different forthose who have recently left welfare and those who have never received welfare.

Among current welfare recipients, employment grew steadily for those charac-terized as “stayers” (continuously on for at least two years or more) and those with

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29.2†

20.9

59.463.4

51.1†55.5

0

10

20

30

40

50

60

70

80

1997 1999 2002

Recipients

Leavers

No welfare

Source: Sample of low-income working-age parents from the 2002 and 1997 National Survey of America’sFamilies. See text for sample definition. Note: Employment any number of hours at the time of the interview.† significantly different from 1997 at the 90% confidence interval.

Year

Figure 3. Employment, 1997–2002

Per

cent

emp

loye

d


a history of cycling on and off welfare (figure 4). Employment of cyclers increasedfrom 23.6 percent in 1997 to 34.9 percent in 2002. Employment of stayers increasedeven more, from 19.3 percent in 1997 to 36.3 percent in 2002. In fact, in 2002 theemployment rate of cyclers and stayers is similar and much higher than the 17.5percent employment rate of new entrants. New entrants to welfare, who may havesought out welfare because of the sluggish job market in 2001/2002, have muchlower employment rates in 2002 than in 1999 and 1997.

In addition to increases in employment, the percentage of welfare recipientsworking full time (35 or more hours a week) increased and the percentage workingrelatively few hours (less than 20) fell dramatically (table 5). In 2002, 56.7 percentof employed welfare recipients worked full time compared with 40.2 percent in1997. In 2002, the percentage of employed recipients working less than 20 hoursfell to 13.4 percent from over 35 percent in 1997. These increases in hours for wel-fare recipients compare to relatively constant full-time employment among workingleavers and women with no welfare history. In both these groups about two-thirdsof employed women work full time. These increases in hours worked are consistentwith the stronger work incentive policies after welfare reform—including more gen-erous earnings disregards in many states and federal and state earned income taxcredits.

Many welfare offices use work-related activities including unpaid or subsidizedjobs, job search, job training, and education to prepare recipients for work. Federallegislation, however, limits states’ ability to count certain nonwork activities such asjob training and postsecondary education toward work participation requirements.We find that participation in any one of a set of work-related activities over the past

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Table 5. Current Employment and Hours of Work, 1997 and 2002 (weighted percents)2002 1997


Currently EmployedAll MKAs 29.2A,B,† 59.4B 51.1† 20.9A,B 63.4B 55.5Single MKAs 33.3A,B,† 66.0 72.0 20.3A,B 71.2 75.4Married/cohabiting MKAs 15.7 44.8 38.6 23.7 48.8 45.2Either adult in married/cohabiting

families 42.8A,B 81.0B 92.4† 52.9A,B 88.2B 96.1

Hours of Worka

All MKAs< 20 13.4† 8.4B 15.1 35.8A,B 10.6B 16.821–34 29.9B 25.6 21.1 24.1 20.7 19.935+ 56.7† 66.0 63.8 40.2A,B 68.7 63.3

Source: Sample of low-income working-age parents from the 2002 and 1997 National Survey of America’sFamilies. See text for sample definition. MKA = most knowledgeable adult a Hours of work reported for employed respondents.A Significantly different from recent leavers at the 90% confidence interval.B Significantly different from those with no welfare experience at the 90% confidence interval.† Significantly different from 1997 at the 90% confidence interval.


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year increased significantly for current recipients between 1997 and 2002, from 51.6percent to 60.9 percent (table 6). This increase is mostly due to the increase in workalready discussed, but it also reflects significant increases in job search from 16.0percent to 22.6 percent. Whether the increase in job search reflects increased require-ments by welfare programs or a more sluggish economy in 2002 is unclear. We finda similar increase over time for former welfare recipients.16 While participation ineducation in general remained relatively stable, significantly fewer welfare recipients

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17.5

34.9†36.3†

21.923.6

19.3

Perc

ente

mp

loye

d

Year

0

5

10

15

20

25

30

35

40

1997 1999 2002

New entrant

Cycler

Stayer

Source: Sample of low-income working-age parents from the 2002 and 1997 National Survey of America’sFamilies. See text for sample definition. Note: Employment any number of hours at time of interview.† significantly different from 1997 at the 90% confidence interval.

Figure 4. Employment by Type of Welfare Recipient, 1997–2002

Table 6. Work Activities in Past Year, 1997 and 2002 (weighted percents)2002 1997


Any work activity 60.9A,† 81.3B 62.3 51.6A,B 79.8B 65.1Working 39.1A,B,† 69.9B 57.3 30.0A,B 72.6B 60.1Education 16.2B 16.6B 8.9 19.2A,B 14.0B 8.8

GED/high school classes 9.0B 9.4B 2.7 7.3B 4.6 2.6College classes 7.2† 7.6 6.3 11.9B 9.4B 6.2

Job training 12.7B 14.2B 5.8† 11.0B 10.2B 4.2Job search 22.6B,† 23.9B,† 3.5 16.0B 15.2B 3.3

Source: Sample of low-income working-age parents from the 2002 and 1997 National Survey of America’sFamilies. See text for sample definition. A Significantly different from recent leavers at the 90% confidence interval.B Significantly different from those with no welfare experience at the 90% confidence interval.† Significantly different from 1997 at the 90% confidence interval.


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Table 7. Reasons for Leaving Welfare, 1997 and 2002 (weighted percents)

2002 1997

Earnings increased, found a job, or worked more on same job 56.0† 70.0Did not want or need benefits, not interested, too much hassle 17.0† 8.6Received additional income from other sources, assets 7.5 4.8Did not follow program rules 6.4 6.7Reached end of time limit 4.7† 0.5Change in family situation 3.8 3.8Moved 1.4 5.4Administrative problem, mix-up 1.3 0.2Other 2.0 0.0

Source: Sample of low-income working-age parents from the 2002 and 1997 National Survey of America’sFamilies. See text for sample definition.Note: In the first round of NSAF, 328 recent leavers were in error skipped out of questions regarding why they left welfare. These and 35 recent leavers who did provide answers in the 2002 NSAF are omitted fromthis table. † Significantly different from 1997 at the 90% confidence level.

participated in college classes in 2002 than in 1997. This also is consistent with therestrictions on counting college toward the federal work participation requirements.

Another indication of the importance of work for welfare recipients is the per-centage that report work as their reason for leaving welfare. Table 7 shows formerrecipients’ self-reported reasons for leaving welfare in 2002 and 1997.17 In 2002,56 percent of recent welfare leavers gave work (either finding a new job or increasedhours or earnings on a current job) as their reason for leaving welfare. This was byfar the most common reason for leaving. The second most common reason was therespondent did not want or need benefits or thought continuing on benefits was“too much hassle.”

Over time there were some significant changes in the reasons for leaving welfare.A greater percentage of former recipients reported work as their reason for leavingwelfare in 1997 than in 2002 (70 percent compared with 56 percent). Other signif-icant changes include an increase from 8.6 percent in 1997 to 17.0 percent in 2002reporting they do not want or need benefits or it is “too much hassle,” potentiallyreflecting increased requirements for recipients. Receiving additional income fromother sources or assets also increased over this time. An increasing number of recipi-ents reported reaching the end of a time limit (0.5 percent in 1997 compared with4.7 percent in 2002), although this is still a relatively small group of recipients.

Characteristics of Jobs The jobs held by current and former recipients can generally be characterized aslow-wage with minimal benefits (table 8). The median hourly wage and job benefitsof current recipients are generally lower than those of former recipients and womenwithout welfare. Current recipients’ median hourly wage is $7.00 an hour comparedwith $7.75 for former welfare recipients.18 This in part reflects that those with higherwages may no longer be eligible for TANF. Current recipients are also less likely to


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have paid leave (41.5 percent) or paid or unpaid maternity leave (68.2 percent).Current recipients are much less likely to have own-employer health insurance (9.9percent) than former recipients (23.5 percent). This could in part reflect the factthat almost all current recipients are eligible for Medicaid, so they may not opt totake up employer health insurance. However, it also reflects that current recipientsare less likely to work for an employer that offers this coverage (52.2 percent) com-pared with former recipients (66.0 percent). Approximately a quarter of workingcurrent and former welfare recipients work primarily at night, similar to the percent-age for those who have not received welfare.

For the most part, the characteristics of the jobs held by former welfare recipi-ents do not differ from the jobs held by low-income women who have not receivedwelfare. Both leavers and nonwelfare groups have similar median hourly wage ratesin 2002, $7.75 and $8.15. The difference between leavers’ and nonrecipients’median hourly wages is not statistically significant. Working former welfare recipi-ents do not have significantly different levels of benefits than women with no formerwelfare receipt, including access to paid leave (56.9 percent), unpaid or paid mater-nity leave (77.8 percent), or employer offer of health insurance (66 percent). Theonly significant difference is that leavers are less likely to have health insurance cov-erage through their employer (23.5 percent versus 35.3 percent). This could reflectuse of transitional Medicaid by some former recipients in lieu of taking up employerhealth insurance.

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Table 8. Characteristics of Workers’ Jobs, 1997 and 2002 (weighted percents, except where noted)

2002 1997Recent No Recent No

Current leaver welfare Current leaver welfare

Median wage ($) 7.00A,B,† 7.75† 8.15† 5.50A,B 6.25B 7.00Any paid leave 41.5A,B 56.9 64.6 na na naPaid or unpaid maternity

/paternity leave 68.2B 77.8 82.5 na na naHas own-employer

health insurance 9.9A,B 23.5B 35.3 4.3A,B 17.5 33.8Employer offers health

insurancea 52.2A,B 66.0 67.5 40.4A,B 64.4 65.7Work primarily at nightb 26.9 29.4 23.9 31.1 31.9B 23.5Job tenure

< 6 months 42.7A,B 28.5B 17.2 40.6B 32.1B 18.16 months – < 2 years 30.0† 42.5B 25.0 36.9A,B 47.5B 24.02 – < 5 years 24.2 22.3 32.2† 17.3B 17.9B 26.75+ years 3.1B 6.8B,† 25.6† 5.1B 2.5B 31.3

Source: Sample of low-income working-age parents from the 2002 and 1997 National Survey of America’s Families. Seetext for sample definition. na = not applicable (question not asked in 1997)Notes: Sample is working respondents excluding those that are self-employed or report unpaid work. All wage datareported in 2002 dollars. a Working for an employer that offers health insurance does not mean that the worker considered here was eligible forthat coverage. b Derived from respondents’ answers to whether they mostly work outside the hours of 6 am and 6 pm.A Significantly different from recent leavers at the 90% confidence interval.B Significantly different from those with no welfare experience at the 90% confidence interval.† Significantly different from 1997 at the 90% confidence interval.


Between 1997 and 2002, we find no significant change in the characteristics ofcurrent or former recipients’ jobs except for wages. After accounting for inflation,the median wages of both current and former recipients increased significantlybetween 1997 and 2002, from $5.50 to $7.00 for current recipients and from $6.25to $7.75 for former recipients. These increases are higher in percentage terms thanthe increase in wages for low-income women with no welfare history, whose medianhourly wage increased from $7.00 to $8.15 an hour.

Differences in job tenure show that a greater percentage of current recipients arenew to their jobs (they have worked for that employer for less than six months) thanformer recipients (42.7 percent versus 28.5 percent). However, over a quarter ofcurrent recipients have worked for the same employer for two years or more. For-mer recipients have shorter job tenures than women who have not been on welfare.This is especially true for job tenures of five or more years, which account for 6.8percent of working leavers but 25.6 percent of women never on welfare. Even so,the percentage of leavers with long job tenures has increased since 1997 from 2.5percent. We may expect that given our definition of former recipients as those wholeft welfare in the past two years, this group will always have shorter job tenuresthan workers with no welfare experience. The 29 percent of former recipients withjob tenures of over two years had to be working at this same job while on welfare.

The majority of jobs held by current and former recipients are in the service andsales occupations and in the service and wholesale/retail trade industries (table 9).Working women who never received welfare are employed in a more even distribu-tion of occupations, although still almost a third work in service occupations. Almosta fifth of these women are in each of clerical/administrative support, profes-sional/managerial/technical, and craft/operators/laborer occupations, comparedwith about a tenth of current recipients. The distribution of employment acrossoccupation and industry has not changed significantly since 1997, with a few excep-tions. Significantly fewer jobs held by former recipients are in manufacturing indus-tries.

Barriers to WorkWelfare reform’s emphasis on getting greater numbers of the caseload to work andlimiting the time they can receive welfare led many states to consider more carefullyhow to help recipients with multiple barriers move toward work. In addition toexemptions for parents of young children, victims of domestic violence, and other“good causes,” many state and local programs reevaluated how they screen for bar-riers to work and how to provide supports for recipients with various work barriers.

Some important questions facing welfare programs after reform were whether a20 percent exemption would be sufficient and whether the prevalence of barriersamong the welfare caseload would increase over time. Some expected that tougherwork requirements would lead to greater exits among those with fewer barriers towork (who could go to work most easily), leaving behind a caseload with an increas-ing share of disadvantaged recipients. This could mean a greater need for programsand strategies to serve this population’s needs and more TANF resources devoted tothem. In addition, reforms’ implementation of stricter sanctions (including full fam-

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ily sanctions in some states) brought up issues of whether some recipients with workbarriers (such as mental health problems) would be unable to meet work require-ments and thus be more likely to be sanctioned off the caseload.

Prevalence of Barriers

As discussed earlier, numerous studies have documented the variety and relativelyhigh prevalence of problems recipients face that potentially impede work. These bar-riers range from low skill levels (including lack of work experience and education) tologistical problems in maintaining work (such as access to stable child care and trans-portation) to personal limitations and family obligations (including poor health,substance abuse, domestic violence, and caring for infants or sick family members).

We identify a set of barriers related to job readiness, family care and logisticalneeds, and personal characteristics. Specifically, we examine eight separate barriers:has never worked or not worked in the past two years; has less than a high schooleducation; has a child less than 1 year old; has a child receiving SSI (indicating he orshe has a disability); primarily speaks Spanish (measured by having completed thesurvey in Spanish); lives outside a metro area and does not own a car; has a healthcondition that limits work; and has poor mental health.19 While there are manypotential barriers families face, this set is both available in the NSAF survey data and

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Table 9. Occupation/Industry of Jobs, 1997 and 2002 (weighted percents)2002 1997


OccupationService 54.4B 44.0B 32.7† 40.9B 46.1B 27.4Sales 16.1A 9.1 12.4 17.1 11.2 13.9Clerical/administrative support 9.0A,B,† 18.7 18.9† 18.0 15.5B 23.0Professional/managerial/technical 10.1B 10.5B 18.2 9.5B 10.1B 16.2Craft/repair, operators, transportation, 10.4B 17.8 17.8 14.5 17.1 19.5laborers

IndustryService 51.7 50.5 48.6 52.3 45.8 46.8Wholesale/retail trade 34.4 27.9 26.0 30.8 28.9 24.8Manufacturing 6.2B 7.5† 11.6† 6.6A,B 13.3 14.4Construction 0.9 2.1 1.9 1.5 3.3B 1.0Finance/insurance/real estate 0.3A,B,† 4.3 4.6 3.0 3.1 4.9Transportation/communications/utilities 1.1A,B 5.0 3.0 1.3A,B 4.7 3.9Othera 5.4 2.8B,† 4.3 4.5A 0.8B 4.2

Source: Sample of low-income working-age parents from the 2002 and 1997 National Survey of America’sFamilies. See text for sample definition.Note: Sample includes employed respondents.a Includes agriculture, forestry, and public administration.A Significantly different from recent leavers at the 90% confidence interval.B Significantly different from those with no welfare experience at the 90% confidence interval.† Significantly different from 1997 at the 90% confidence interval.


has been acknowledged as a core set of barriers in other studies. Both prevalence ofbarriers and the extent to which barriers impede work are important for welfare pro-grams.

Table 10 shows the prevalence of each of our identified barriers among our threegroups for 2002 and 1997. These barriers range in prevalence from relatively smallpercentages living outside a metro area without a car or having a child receiving SSIto relatively large percentages without a high school education or with a healthproblem.

Certain barriers are more prevalent among current recipients than among low-income women who have not received welfare. These include lacking a high schooldegree (41.4 percent versus 28.9 percent), having a child on SSI (7.6 percent versus3.9 percent), and having a health condition or poor mental health (25.2 and 24.4percent, respectively, versus 10.8 and 13.2 percent). Other barriers do not differ in2002, such as limited past work experience, having a young child, and not having acar outside a metro area. One potential barrier, being primarily a Spanish speaker, ismore prevalent among those not receiving welfare, likely reflecting changes in immi-grant status and eligibility already discussed.

Former welfare recipients generally have lower or similar prevalence of barriersto work than current recipients. Leavers have more work experience and are lesslikely to be Spanish-speaking than current recipients. The only exception is in 2002we find that more recent leavers live outside a metro area without cars than currentrecipients. Interestingly, leavers do not report significantly better health than cur-rent recipients, nor are they less likely to have a young child.

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Table 10. Barriers to Work, 1997 and 2002 (weighted percents)



Work experienceNever 8.9A 2.9B 7.2 11.1A,B 2.2B 6.3Not in prior two years 19.6A,† 9.0B 21.2 32.2A,B 7.6B 19.7

Less than high school education 41.4B 33.5 28.9† 39.8A,B 30.1 25.3

Age of youngest child < 1 18.3 14.4 14.2 15.8 11.1 13.0

Child receives SSI 7.6B 5.2 3.9† 7.9B 5.5B 2.8

Spanish speaking 10.9A,B,† 4.8B 24.4† 6.5B 5.0B 18.4

No car, does not live in MSA 4.9A,† 10.2B 4.4† 9.1B 6.2B 2.4

Health (respondent)

Health condition limits work 25.2B 18.7B,† 10.8† 22.7A,B 8.8 7.6Mental health poor (10th %ile) 24.4B 28.4B,† 13.2 21.8B 17.8B 12.8

Source: Sample of low-income working-age parents from the 2002 and 1997 National Survey of America’sFamilies. See text for sample definition. A Significantly different from recent leavers at the 90% confidence interval.B Significantly different from those with no welfare experience at the 90% confidence interval.† Significantly different from 1997 at the 90% confidence interval.


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Our results show little evidence that the current caseload grew more disadvan-taged between 1997 and 2002. Recipients, on average, are not less “job ready” interms of education and work experience. In fact, fewer current recipients have notworked in the past two years (compared to steady rates of work experience for leaversand nonwelfare groups), likely attributable to efforts to get recipients workingquickly. The prevalence of having a young child, a child with a disability, or beingin poor health has also not increased. In addition, fewer recipients living outsidemetro areas do not own cars, which might reflect states’ easing the allowable assetvalue of cars in determining eligibility. The only barrier that increased in prevalenceover time is the percentage of recipients speaking primarily Spanish (from 6.5 per-cent in 1997 to 10.9 percent in 2002), mirroring our finding of increases in immi-grants on the caseload.

However, we do find some increase in the prevalence of barriers among leaversover time. The share of leavers with health barriers increased significantly. Leaverswith a work-limiting health condition increased from 8.8 percent in 1997 to 18.7percent in 2002. Similarly, the prevalence of poor mental health among leaversincreased from 17.8 percent to 28.4 percent. These changes could suggest that,since reform, those with health problems are increasingly able to work their way offwelfare through program supports. They also are consistent with an increasing num-ber of recipients with health problems being cut off welfare due to stricter require-ments and sanctions.

Multiple Barriers

Past literature suggests that individual barriers that are the biggest impediment towork but the co-occurrence of multiple barriers. Table 11 shows the prevalence ofmultiple barriers among recipients, leavers, and low-income women who have neverreceived welfare.

Current TANF recipients are more likely to face multiple barriers than recentleavers or those with no welfare experience. More than half have at least two barri-

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Table 11. Multiple Barriers to Work, 1997 and 2002 (weighted percents)



Number of barriersa

0 20.3A,B 28.5† 31.4† 18.3A,B 38.1 36.71 29.2 34.0 30.6† 27.4A,B 36.7 32.82 28.9A,B 21.3 20.6† 33.0A,B 19.6 18.93 13.5 14.4† 13.3† 13.2A,B 4.4B 9.24+ 8.0A,B 1.8B 4.0† 8.0A,B 1.3B 2.4

Source: Sample of low-income working-age parents from the 2002 and 1997 National Survey of America’s Families. See text for sample definition. a Number of barriers is out of the list of eight barriers discussed in text. A Significantly different from recent leavers at the 90% confidence interval.B Significantly different from those with no welfare experience at the 90% confidence interval.† Significantly different from 1997 at the 90% confidence interval.


ers and 8 percent have four or more barriers. In addition, past welfare receipt is notconnected to a higher prevalence of barriers; recent welfare leavers face roughly thesame number of barriers as those without past welfare receipt. Approximately one-third of leavers and those with no welfare experience have two or more barriers.

The percentage of TANF recipients with multiple barriers remained constantbetween 1997 and 2002, with 8 percent of recipients having four or more barriersin both years. This supports the conclusion that the caseload has not become moredisadvantaged over time.

A greater percentage of leavers have multiple barriers in 2002 than 1997. Thepercentage of leavers with no barriers fell from 38.1 percent to 28.5 percent, andthe percentage with three barriers increased from 4.4 percent to 14.4 percent. Whilewe also see a general increase in the number of barriers among the nonwelfare group,the increase in barriers for leavers is greater. This shows that more individuals withmultiple barriers left welfare as welfare reform progressed. Whether this means theywere able to move to work or were more likely to be cut off is unclear.

Barriers among Subgroups of Recipients

Although we find little evidence of an increase in barriers among the entire case-load, it is possible that there has been an increase in barriers among a subset of recip-ients. Table 12 compares the prevalence of barriers among new entrants, cyclers,and stayers for 2002 and 1997. Unfortunately, dividing the already small currentwelfare recipient group leaves us with small sample sizes, which limits our ability tobe certain that differences in prevalence estimates are statistically significant. We findsome evidence that new entrants are less likely than stayers to have barriers to work.Specifically, new entrants are less likely than stayers to have limited work experience,have less than a high school education, or be Spanish-speaking. New entrants andstayers (and cyclers) have very similar levels of health conditions and mental healthproblems. We also find that 46.1 percent of new entrants have multiple barriers to

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Table 12. Barriers to Work by Type of Welfare Recipient, 1997 and 2002 (weighted percents)2002 1997

New entrants Cyclers Stayers New entrants Cyclers Stayers

No work in past two years 26.2D 18.7D 36.9† 23.3D 27.7D 51.4Less than high school education 31.9D 43.0 45.8 35.4 43.2 38.8Age of youngest child < 1 21.8 22.2 13.3 27.1 14.7 14.9Child receives SSI 7.2† 8.8 6.8 1.4C,D 4.6D 9.8Spanish speaking 5.2D 4.6D 18.9† 7.4 1.8D 7.7No car, does not live in MSA 7.3 3.5 2.4† 13.6 8.1 8.7Health condition limits work 27.4 24.8 24.9 23.8 25.2 20.5Mental health poor (10th %ile) 22.4 29.5 25.5 33.2D 20.6 20.0

Source: Sample of low-income working-age parents from the 2002 and 1997 National Survey of America’sFamilies. See text for sample definition. C Significantly different from cyclers at the 90% confidence interval.D Significantly different from stayers at the 90% confidence interval.†Significantly different from 1997 at the 90% confidence interval.

Table 13. Percent Currently Working among those with Barriers to Work, 1997 and 2002 (weighted percents)2002 1997


Less than high school education 26.6A,B,† 46.9 38.6† 12.4A,B 49.7 47.0

Age of youngest child < 1 15.7A,B 53.3B,† 35.8 10.5A,B 65.2 36.3

Child receives SSI 33.0A,† 64.6B 36.1† 12.8A,B 43.7 52.8

Spanish speaking 27.4A,† 54.5 39.5 12.9A,B 54.3 42.9

No car, does not live in MSA 5.0A,B 36.4 37.3† 12.5A,B 46.2 55.9

Health (respondent)

Health condition limits work 18.2A,B 48.5 39.2† 15.8A,B 58.1 49.0

Mental health poor (10th %ile) 25.9A,B 51.3 50.3† 16.4A,B 60.6 59.8

Source: Sample of low-income working-age parents from the 2002 and 1997 National Survey of America’s Families. Seetext for sample definition.A Significantly different from recent leavers at the 90% confidence interval.B Significantly different from those with no welfare experience at the 90% confidence interval.† Significantly different from 1997 at the 90% confidence interval.


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work compared with 52.4 percent of stayers, although this difference is not statisti-cally significant (not shown). Cyclers have similar barriers to work as new entrants.

Although new entrants may be less disadvantaged than stayers, we find that thegroup of stayers has not become more disadvantaged over time. Only the prevalenceof Spanish-speaking stayers increased between 1997 and 2002 (from 7.7 to 18.9percent). Moreover, the share that lives outside an MSA without a car and the sharethat has not worked in the past two years declined. The increase in work experiencereflects the finding that more stayers are employed in 2002. Overall, 52.4 percent ofstayers had two or more barriers in 2002, compared with 56.8 percent in 1997, adifference that is not statistically significant. These results strengthen the conclusionthat there has not been an increase in the share of the caseload facing barriers.

Relationship of Barriers to Employment Outcomes

While high prevalence of certain barriers can itself be a concern for welfare offices,the extent to which a barrier makes work difficult must also be understood. Welfareoffices want to learn which barriers are most likely to impede work so they can con-centrate resources on these.

The share of current and former recipients who are working despite having abarrier differs depending on the specific barrier (table 13). For example, a higherpercentage of current recipients without a high school education (26.6 percent)work than those living outside a metro area without a car (5.0 percent). Over timethe percentage of welfare recipients working with certain barriers increased signifi-cantly, including less than high school education, child receiving SSI, and Spanish-speaking. Over this same period, the percentage of nonwelfare recipients workingwith barriers generally declined. The difficulty with interpreting employment rates

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by specific barrier is that many recipients and former recipients have multiple barri-ers. It is not clear whether a specific barrier or a group of barriers that may co-occuris the main impediment to work. We explore these possibilities in two ways. First,we examine employment rates by number of barriers to see how having a greaternumber of any of our barriers is related to work. Second, we examine how individ-ual barriers are correlated to work while controlling for other barriers.

For recipients, former recipients, and women who have not received welfare,having a greater number of barriers significantly reduces the likelihood of employ-ment (figure 5). In 1997, 10.3 percent of current recipients with two barriersworked, compared with 26.8 percent of those with one barrier. By 2002, currentrecipients with one barrier were still significantly less likely to work than those withno barriers (28.6 percent versus 55.2 percent) but those with two barriers were notless likely to work than those with one barrier (25.9 percent). This in part reflectsincreases in work for welfare recipients generally and for those with specific barriers(like less than a high school education). The employment rate among current wel-fare recipients with two barriers more than doubled between 1997 and 2002. How-ever, those with three or more barriers worked significantly less often (10.1 percent)than those with two or fewer barriers.

To better understand which barriers have the most impact on work, we can alsoexamine the relationship of the entire set of barriers to work at once in a multivari-ate regression. This allows us to examine the connection between an individual bar-rier and work, controlling for all other barriers in our set of eight. A significant

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55.2

51.2

28.626.825.9†

10.310.1

3.6

2002 1997

0 barriers1 barrier2 barriers3+ barriers

Source: Sample of low-income working-age parents from the 2002 and 1997 National Survey of America’s Families. See text for sample definition. † Significantly different from 1997 at the 90% confidence interval.

Figure 5. Percentage of Current Recipients Working by Number of Barriers


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relationship between a given barrier and work in this regression means that this bar-rier is associated with significantly lower employment even after taking into accountthe impact of other barriers.20 Table 14 shows the results of these regressions forcurrent recipients in 2002 and 1997. The coefficients are the percentage point dif-ference from the employment rate of those without any barriers. The first columngives the results for our set of eight barriers.21

In 2002, having little past work experience, having a child less than age 1, andnot having a car while living outside a metro area are associated with significantlylower employment rates. We also find that speaking Spanish is not a barrier, butactually is associated with significantly higher rates of employment. Not surprisingly,lack of recent work experience is most strongly related to lower current employ-ment. Those with limited past work experience (have not worked in the past twoyears) have an employment rate 41 percentage points lower than those with recentwork experience.

In addition to directly influencing current employment, barriers can be a causeof limited past work experience. If this is the case, some barriers that we find are not

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Table 14. Regression Results for Barriers to Work on Employment of Current WelfareRecipients

Controlling for Not Controlling for Work Experience Work Experience

Estimate Standard Error Estimate Standard Error

2002

Work experience limited -0.411* (0.040)Less than high school education 0.033 (0.057) -0.021 (0.062)Age of youngest child < 1 -0.188* (0.066) -0.199* (0.075)Child receives SSI 0.030 (0.105) 0.063 (0.103)Spanish speaking 0.087* (0.050) -0.030 (0.073)No car, does not live in MSA -0.299* (0.073) -0.284* (0.065)Health condition limits work -0.125 (0.078) -0.192* (0.075)Mental health poor (10th %ile) -0.014 (0.058) -0.030 (0.060)Intercept 0.468* (0.049) 0.406* (0.048)

1997

Work experience limited -0.358* (0.028)Less than high school education -0.083* (0.034) -0.130* (0.041)Age of youngest child < 1 -0.141* (0.036) -0.122* (0.034)Child receives SSI -0.004 (0.034) -0.084* (0.038)Spanish speaking 0.020 (0.043) -0.040 (0.046)No car, does not live in MSA -0.089 (0.053) -0.104* (0.057)Health condition limits work -0.035 (0.040) -0.076 (0.043)Mental health poor (10th %ile) -0.052 (0.031) -0.038 (0.040)Intercept 0.446* (0.032) 0.324* (0.031)

Source: Sample of low-income working-age parents from the 2002 and 1997 National Survey ofAmerica’s Families. See text for sample definition. Notes: Results from an ordinary least squares regression model with no additional controls. Coefficientshould be interpreted as the relative probability of being currently employed with the given character-istic compared to those not having that characteristic. For example, those with limited work experi-ence in 2002 are 41.1 percentage points less likely to be currently employed than those with greaterexperience, controlling for other barriers.* Coefficient is significant at the 90% level.


negatively related to current employment may actually be having an impact throughlow past work experience, especially barriers that are more chronic, such as poorhealth. To try to capture the full connection between barriers and current work, weshow results for the same regression without including the past work experiencebarrier (shown in the third column). We find that having a child under age 1 andnot having a car outside a metro area still hinder work. However, now we find thathaving a health condition that limits work is also related to significantly lower cur-rent employment. In addition, the relationship of Spanish speaking and work is nolonger significant (and is now negative), suggesting many Spanish-speaking currentrecipients have limited past work experience.

The results for 1997 are largely the same as for 2002, with one main exception.Having less than a high school education is associated with a significantly lower like-lihood of work in the early reform period. By 2002, employment of those without ahigh school education was not significantly different than current recipients with ahigh school education or more. This could be due to the work incentives and require-ments that welfare reform imposed, even for recipients with low education levels.However, the result could also reflect disproportionately declining employment ratesfor those recipients with higher levels of education due to either the slowing econ-omy or an increased likelihood that recipients with higher levels of education areless “job ready” in 2002 than in 1996.22

Family Income and Economic Well-BeingChanges in demographic and work characteristics discussed earlier could stronglyinfluence family incomes, poverty, and economic well-being. Rising employmentand wage rates will increase the share of income from earnings and decrease theshare from welfare benefits, for example. Changes in family structure also couldaffect incomes. More single parents on welfare living with cohabitors, for example,will increase income to the extent that these other adults have earnings or otherincome sources such as Social Security benefits. While we did not observe a signifi-cant change in numbers of children, changes in the number of adults in familiesaffect poverty status since thresholds vary by family size. Changes implemented inprograms other than TANF as part of the sweeping PRWORA legislation also couldaffect family incomes.

Composition of IncomeAs would be expected, the composition of current income for the three groups dif-fers substantially, with the nonwelfare group and recent leavers relying much moreon earnings as their main source of support than the current welfare group (table15).23 Some of the differences across the three groups narrow, however, between1997 and 2002. Among all families, the share of current recipients’ income fromearnings increases from 42.2 percent in 1997 to 49.2 percent in 2002 while the

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Table 15. Share of Current Income from Different Sources, 1997 and 2002 (weighted percents)

2002 1997 (1999)


AllEarnings 49.2A,B,† 85.3B,† 92.2 42.2A,B 90.1B 92.4

Self, partner 43.0A,B,† 80.4B,† 86.8 32.4A,B 83.5B 87.7Other earnings 6.2† 4.9 5.3 9.8B 6.6 4.7

Child support 1.9A,B 3.7 3.2† 1.8A,B 2.8 2.6SSI and disability 13.3B 10.7B,† 3.9 11.6A,B 6.6B 3.7Welfare 34.3A,B,† 0.3 0.0 43.3A,B 0.1 0.0Other sources 1.4 0.0B,† 0.8† 1.1A 0.4B 1.3

Married/CohabitingEarnings 48.2A,B 86.2B,† 95.8 51.5A,B 93.7 95.5

Self, partner 46.2A,B 83.3B,† 91.8 47.6 91.8 91.9Other earnings 2.0B 2.9 4.0 3.9 1.9B 3.6

Child support 0.8A 1.8B,† 0.8 1.3 1.4B 0.7SSI and disability 12.4B 11.9B,† 2.7 11.6A,B 4.6 2.7Welfare 37.1A,B 0.0 0.0 35.1A,B 0.0 0.0Other sources 1.6A 0.1B,† 0.8 0.6B 0.3B 1.1

Single AloneEarnings 46.4A,B,† 86.5B 81.0 27.4A,B 86.6B 81.6Child support 3.2B 5.4B 12.7† 2.8A,B 6.0B 10.8SSI and disability 6.9 8.0 5.6 9.6 7.0 6.3Welfare 43.1A,B,† 0.0 0.0 60.1A,B 0.0 0.0Other sources 0.4 0.1B 0.7 0.1B 0.4B 1.3

Single with OthersEarnings 52.5A,B 81.2 84.0 50.9A,B 87.6 84.2

Self, partner 37.8A,B 63.7 65.3 26.6A,B 66.3 65.5Other earnings 14.7† 17.5 18.8 24.3 21.3 18.7

Child support 1.5B 4.5 6.0 1.0B 1.8B 5.6SSI and disability 19.6B 13.3 9.0 13.9B 9.8 7.8Welfare 24.3A,B 1.3 0.0 31.5A,B 0.4 0.1Other sources 2.1 -0.3 1.0† 2.7A 0.4B 2.4

Source: Sample of low-income working-age parents from the 2002 and 1997 National Survey ofAmerica’s Families. See text for sample definition. Note: Percentages may not add to 100 because of omitted “missing” category.A Significantly different from recent leavers at the 90% confidence interval.B Significantly different from those with no welfare experience at the 90% confidence interval.† Significantly different from 1997 at the 90% confidence interval.


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share of their income from welfare declines from 43.3 to 34.3 percent. Note thatthe earnings contributions of the mother and her spouse/partner increase substan-tially, offsetting a decline in the contribution of income from the earnings of otheradults in the family.

Yet, the contribution of earnings to the incomes of recent leavers declinesbetween 1997 and 2002 (from 90.1 to 85.3 percent). And former welfare recipientsreceive SSI and disability benefits more often in 2002 than in 1997.24 In contrast,only the nonwelfare group shows a significant increase in child support incomebetween 1997 and 2002.

Trends in income composition by living arrangements help to explain some ofthese patterns. The increasing share of income from earnings and declining share ofincome from welfare for current recipients occur primarily among single parents liv- s

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ing alone. In contrast, all significant changes in income for recent welfare leaversoccur among those who are married or cohabiting. The significantly greater share ofincome from SSI and disability benefits occurs only for married leavers; either spousecould qualify for disability benefits. Individuals with disabilities and no other meansof support sometimes use welfare as a temporary source of income until disabilitybenefits are approved.

Among lone single parents, the group most targeted for child support enforce-ment efforts, the only significant increase in the share of income from child supportincome occurs in the nonwelfare group (from 10.8 percent of income in 1997 to12.7 percent in 2002). This result is consistent with Sorensen and Hill (2004), whoshow that never-married mothers not on welfare benefited most from states’ childsupport enforcement expansions through new wage withholding practices (imple-mented in 1994 and strengthened through the employment and wage data systemset up through PRWORA) and voluntary in-hospital paternity establishment (feder-ally mandated in 1993). PRWORA’s rescission of the mandatory $50 per monthpass-through of child support collected on behalf of welfare mothers countered theeffects of child support enforcement on never-married mothers on welfare.25 Thelack of progress in child support receipt among recent welfare leavers could reflectcontinued withholding of child support by the state (to repay the costs of welfarebenefits).

PovertyThe distributions of current cash income relative to poverty across our three low-income comparison groups highlight the relatively high poverty rate among the cur-rent welfare group compared with the recent leaver or the nonwelfare group (table16). Almost three-quarters of the current welfare group have incomes below thepoverty level in 2002, including 44.1 percent of families with incomes below halfthe federal poverty level. The recent leaver group is, in turn, relatively poorer thanthe nonwelfare group. More than 6 in 10 recent welfare leavers are poor, and 1 in 3have incomes below half the poverty level. In contrast, about 4 in 10 nonwelfarefamilies have income below the poverty level.26

The substantial improvement in income for current welfare recipients between1997 and 2002 is striking. Despite their continued high rates of poverty, deeppoverty among the current welfare group declines from 60.5 to 44.1 percent. Therealso are significant increases in the share of the current welfare group with incomesabove poverty in 2002 compared with 1997. In contrast, the distributions of incomefor recent leavers and the nonwelfare groups does not change significantly between1997 and 2002. The improvement in the current welfare group’s income reflect atleast in part increased earnings in response to states’ new TANF rules that generallyallow welfare recipients to retain more of their earnings while still receiving somewelfare benefits. The result also may reflect compositional shifts among those onwelfare. For example, we showed earlier that recipients in 2002 more often lived inthe West with relatively higher welfare benefits and less often in the South with rela-tively low welfare benefits compared with 1997. Increases in cohabitation also couldaffect this result since more single-parent welfare families live with other adults whomay be contributing to total family income.

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The distributions of income by family structure provide further insight into thesepatterns. Among single parents, only current welfare recipients experience statisti-cally significant improvements in income. Among singles living alone, the share indeep poverty declines from 69.3 percent in 1997 to 52.6 percent in 2002; amongsingles living with others, the share living in deep poverty declines from 57.7 per-cent to 33.2 percent. Also, the share of single-parent welfare families living abovethe poverty level increases significantly. Income does not change for married andcohabiting welfare recipients. Poverty rates do not decline for recent single-parentleavers, although the mean income for those living alone increased significantlybetween 1997 and 2002 (from $11,298 to $13,342).

While changes are not statistically significant, poverty changes by demographicsubgroup for recent welfare leavers. Among single parents living alone, deep povertydeclines, the share with income above 150 percent of poverty increases, and medianincome increases between 1997 and 2002. In contrast, deep poverty increases for

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Table 16. Current Income Relative to Poverty, 1997 and 2002 (weighted percents, except where noted)2002 1997


All< 50% poverty 44.1A,B,† 31.3B 16.5 60.5A,B 27.9B 14.750% – <100% poverty 29.0B 30.1B 23.7 27.5A 35.7B 23.5100% – <150% of poverty 17.5A,B,† 23.8 27.8 8.5A,B 22.8B 28.8150% of poverty and over 9.4A,B,† 14.8B 32.0 3.5A,B 13.6B 33.0

Median social family income ($) 10,860B,† 13,824B 20,995 7,028A,B 14,257B 21,521

Married/Cohabiting< 50% poverty 41.0B 26.5B 11.7 40.6A,B 14.5 11.350% – <100% poverty 28.1 29.3 22.7 39.6B 37.9B 22.1100% – <150% of poverty 18.9B 25.1 29.1 12.4A,B 23.5B 30.1150% of poverty and over 12.0B 19.2B 36.5 7.4A,B 24.2B 36.6

Median social family income ($) 12,600B 17,659B 24,960 11,825A,B 18,831B 24,883

Single Alone< 50% poverty 52.6A,B,† 30.4 25.8† 69.3A,B 40.2B 19.550% – <100% poverty 28.1 26.5 23.0 21.4 28.8 24.6100% – <150% of poverty 12.9A,B 28.1 26.2 7.9A,B 22.4 27.9150% of poverty and over 6.5A,B,† 15.1B 25.1 1.4A,B 8.6B 28.0

Median social family income ($) 8,055A,B,† 13,342 15,048† 5,604A,B 11,298B 16,141

Single with Others< 50% poverty 33.2† 40.4B 24.1 57.7A,B 26.4 27.950% – <100% poverty 31.4 38.5 29.5 30.9 45.3 30.4100% – <150% of poverty 23.5A,† 13.6B 23.8 6.7A,B 22.5 21.9150% of poverty and over 11.9B 7.6B 22.6 4.7B 5.8B 19.9

Median social family income ($) 15,942† 12,192B 17,916 9,375A,B 12,912 15,692

Source: Sample of low-income working-age parents from the 2002 and 1997 National Survey of America’s Families. Seetext for sample definition. A Significantly different from recent leavers at the 90% confidence interval.B Significantly different from those with no welfare experience at the 90% confidence interval.† Significantly different from 1997 at the 90% confidence interval.


married/cohabiting and single parents living with other adults. As noted earlier, nosignificant changes in family structure occurred among recent welfare leavers.Changes in poverty and income do not reflect family compositional shifts. Since thepoverty and income changes for recent welfare leavers do not meet the test of statis-tical significance, we must caution that we cannot report these results definitively.We strongly believe, however, that the poverty and income status for those thatleave welfare should continue to be monitored carefully over time.

Incomes significantly deteriorate for the cohort of single parents living alone inthe nonwelfare group—25.8 percent have cash income below 50 percent of povertyin 2002 compared with 19.5 percent in 1997. The income distribution for the non-welfare group of singles living with others shows no significant changes, althoughthe mean and median incomes of singles living alone tend to decline while theincomes for those living with other adults tend to increase. The increase in deeppoverty among lone single parents could reflect the weaker economy of 2002 rela-tive to 1997, or it could reflect a compositional shift. If more very low income, sin-gle parents avoid welfare—either because of states’ diversion policies or family orsocietal pressures to avoid welfare—this would tend to depress average incomeamong this group.

Use of Other Government SupportsOf course, families may receive in-kind benefits from other government or privatesources that may make large differences in the economic well-being across groupsand time. Families could receive food stamps, government health insurance cover-age through Medicaid and SCHIP, the EITC, help with child care expenses, andhousing assistance. As described earlier, PRWORA enacted changes to some of theseprograms in 1996 and subsequent legislation and state practices initiated morechanges, including restoration of some of the PRWORA changes. Recall that immi-grant eligibility for food stamps, the administration of food stamp programs, childcare subsidy funding, and government health insurance coverage for children allchanged during this period.

Differences in family incomes across the three groups and trends over time alsowill affect receipt of noncash government supports. Effects will vary by governmentprogram since income eligibility rules vary dramatically across the state work sup-port programs. Food stamps are generally available to families with income below130 percent of the federal poverty level, although deductions for housing, health,and child care expenses mean that families above this income cut-off can qualify forsome benefits. Children in families with income below 200 percent of the povertylevel generally are eligible for SCHIP or Medicaid, and the median state sets its offi-cial income eligibility standard for child care subsidies at about 194 percent of thepoverty level (Zedlewski et al. 2006). The EITC phases out at 226 percent of thefederal poverty level for a single parent with two children. Yet, housing assistance istargeted toward families with the greatest needs. In lieu of an absolute income eligi-bility standard, housing assistance technically is available to low-income families withhousing costs in excess of 30 percent of their income. Help with child care expensesand housing assistance is not guaranteed to low-income families. States provide thesebenefits until the money runs out.

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Table 17. Receipt of Other Government Support, 1997 and 2002 (weighted percents)

2002 1997Current Recent leaver No welfare Current Recent leaver No welfare

AllFood stamps 87.6A,B,† 42.7B 13.7† 92.8A,B 36.8B 10.9Health insurancea

Medicaid or SCHIP 85.6A,B,† 48.3B,† 15.4† 95.3A,B 33.3B 8.9Employer or other 7.1A,B,† 23.7B 43.8† 3.0A,B 20.6B 53.1

Help paying for child care 21.4A,B 40.8B,† 7.9† 19.2A,B 27.6B 6.1Housing assistanceb

Government housing assistance 39.8A,B 30.0B 13.4† 37.8B 32.7B 10.0

Married/CohabitingFood stamps 82.4A,B 45.1B 10.5† 91.0A,B 35.9B 7.2Health insurancea

Medicaid or SCHIP 79.9A,B 53.8B,† 12.2† 90.5A,B 30.7B 6.6Employer or other 2.9A,B 21.2B 44.6† 1.6A,B 16.9B 54.7

Government child care assistance 13.7A,B 26.7B 5.2† 9.1A,B 19.1B 3.8Housing assistanceb

Government housing assistance 16.6B,† 12.7 8.7† 33.8A,B 15.5B 5.5

Single AloneFood stamps 91.7A,B 42.0B 22.9 94.8A,B 39.2B 19.8Health insurancea

Medicaid or SCHIP 90.0A,B,† 45.1B 20.8† 97.8A,B 36.6B 13.6Employer or other 7.8A,B,† 33.6B,† 45.7† 2.2A,B 15.3B 52.5

Government child care assistance 24.3A,B 56.2B 15.1 25.3B 30.1B 13.7Housing assistanceb

Government housing assistance 59.8A,B,† 45.3B 24.5† 43.8B 52.7B 19.8Housing w/o payment of rent 4.5 5.8 4.2 6.5 6.5 3.5

Single with OthersFood stamps 85.5A,B 40.4B 13.6 89.9A,B 33.7B 17.8Health insurancea

Medicaid or SCHIP 83.4A,B,† 46.2B 21.8† 93.8A,B 31.2B 14.8Employer or other 9.9B 8.0B,† 37.1† 5.9A,B 37.1 44.1

Government child care assistance 23.4B 31.5B 9.1 14.4A,B 36.6B 5.9Housing assistanceb

Government housing assistance 27.7B 25.9 17.4 30.1B 21.1 16.9Housing w/o payment of rent 2.6 2.0 3.8 1.9 3.4 3.9

Source: Sample of low-income working-age parents from the 2002 and 1997 National Survey of America’s Families. Seetext for sample definition. a Health insurance coverage of parent, child, or both.b Consistent measures of housing assistance not available for 1997. Estimates shown are for 1999.A Significantly different from recent leavers at the 90% confidence interval.B Significantly different from those with no welfare experience at the 90% confidence interval.† Significantly different from 1997 at the 90% confidence interval.


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Welfare status has historically defined another general difference in receipt ofthese benefits. Current welfare recipients are much more likely to have noncash gov-ernment supports than either the recent leaver or nonwelfare groups since casework-ers help families enroll in all available benefit programs, and recent leavers are morelikely to have these supports than the nonwelfare group because of their broaderexposure to these programs while on welfare (Zedlewski et al. 2006).

As expected, families on welfare are much more likely to have food stamps thanrecent leavers or the nonwelfare group, and recent welfare leavers are more likely toreceive food stamps than the nonwelfare families (table 17). As shown earlier, about

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one-third of the nonwelfare group has income above 150 percent of the povertylevel (above the food stamp eligibility range). Still, the relatively low share of thenonwelfare group receiving food stamps (13.7 percent) reflects low participationamong eligible families. Many other studies confirm low rates of food stamp partici-pation among families outside the welfare system (Zedlewski and Rader 2005).

A significantly smaller share of current welfare families participates in food stampsin 2002 relative to 1997 (87.6 percent compared with 92.8 percent), possibly reflect-ing tightened eligibility for immigrant families. Some states allow TANF eligibilityfor immigrant families, but only a subset of these states use their own money to payfor food stamps for immigrants ineligible under federal rules. Lower eligibility amongcurrent welfare families in 2002 could also reflect differences in how the two pro-grams treat larger families. The Food Stamp Program counts all income in the house-hold to determine eligibility, but TANF may disregard or only count part of theincome of other adults in the household.

Food stamp participation increases among recent leavers and nonwelfare familiesbetween 1997 and 2002.27 This at least partly reflects changes in states’ food stampprogram rules to continue eligibility for families leaving welfare who remain eligiblefor food stamps.28 Many states changed their administrative procedures so that foodstamp cases are no longer automatically closed when a welfare case is closed. Andmany states implemented outreach campaigns during this period to educate work-ing families about the benefits of food stamps.

Differences in government health insurance coverage through Medicaid orSCHIP across the groups show a pattern similar to that for food stamps.29 Currentand recent welfare families receive this benefit far more often than the nonwelfarefamilies. Correspondingly, the nonwelfare group is more likely to have health cover-age through an employer than the other groups. Also, similar to the story for foodstamps, current welfare families have Medicaid or SCHIP coverage less often in 2002than in 1997, while recent leavers and nonwelfare families more often have cover-age. The decline in coverage for current recipients (85.6 percent compared with95.3 percent) probably reflects restrictions in immigrant eligibility enacted withPRWORA, while the increase in coverage for the other groups probably reflects theenactment of SCHIP in 1997 and the subsequent outreach campaign to increaseenrollment.

The increase in government health insurance for the nonwelfare group is accom-panied by a decline in coverage through an employer over time (53.1 percent in1997 compared with 43.8 percent in 2002). This decline could happen as a resultof either the decline in jobs offering coverage during the period or an increase inthe share of workers who accepted coverage through their employer. Cutler (2002)shows that private employer coverage declined during the 1990s primarily becausefewer workers took up coverage when offered it, not because fewer were offeredinsurance. If employers pass on higher health care costs to workers, fewer employeesmay find it affordable and more will turn down their employers’ offers of healthinsurance.

Help paying for child care highlights other differences across the three compari-son groups and policy changes during this period. Generally only working familiesqualify for help with child care, but child care must also be provided to welfare recip-

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ients in different types of work activities. Child care subsidies also are only availableto eligible families on a first-come, first-served basis. The share of recent leavers get-ting help paying for child care increases substantially between 1997 and 2002 (from27.6 to 40.8 percent). During this period, many states shifted TANF dollars to payfor child care as caseloads declined and the demand for basic cash benefits declined(Zedlewski et al. 2002). Significantly more families without welfare experience alsoreport getting help with child care in 2002 compared with 1997, although theincrease was much smaller than for recent leavers.

Government help with housing costs remains fairly constant between 1999 and2002 except for the increase in the share of nonwelfare families with this assistance(13.4 percent compared with 10 percent).30 This increase is consistent with otherresults showing some income decline among the nonwelfare group over time. Receiptof housing assistance by family type shows that receipt increased among single par-ents living alone (59.8 percent in 2002 compared with 43.8 percent in 1999) withan offsetting decline among married and cohabiting families (16.6 percent in 2002compared with 33.8 percent in 1999). The increase for the nonwelfare groupoccurred among both married/cohabiting families and single parents living alone.

Families’ knowledge about the EITC suggests the importance of this govern-ment support (figure 6). Like other surveys, the NSAF did not ask directly whetherfamilies received the EITC (many families would not know whether they receivedthe credit since it may have simply offset other taxes owed). The NSAF did ask fam-ilies about their awareness of the EITC and whether they used a paid tax preparer.Current welfare recipients and recent welfare leavers are more aware of the EITCthan the nonwelfare group (62.7 and 79.5 percent for the current and recent wel-

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43.5B

62.7B

60.3B

79.5B

57.357.6

Heard of EITC Used tax preparer

Current welfareRecent leaverNo welfare

Source: Sample of low-income working-age parents from the 2002 and 1997 National Survey of America’s Families. See text for sample definition. B Significantly different from those with no welfare experience at the 90% confidence level.

Figure 6. Familiarity with Earned Income Credit and Use of Tax Preparers, 2002


fare groups, respectively, compared with 57.6 percent for the nonwelfare group).Larger shares of both recent welfare leavers and the nonwelfare group used paid taxpreparers in 2002 than the current welfare group, possibly reflecting differences inthe likelihood of earnings and the need to file a tax return between the groups. Thehigh awareness of the EITC and use of paid professionals among low-income fami-lies suggest that many families that qualify for the EITC indeed do get this type ofsupport.31

Family and Child Well-Being The three groups differ substantially in their material well-being as measured alongdimensions of housing environments, assets, and food insecurity (table 18). Currentwelfare recipients and recent leavers generally report more housing instability thanthe nonwelfare group, while the differences between current and recent welfareleavers provide a more complicated picture of relative well-being. Recent leaversreport having greater housing stability than current recipients, but both groupsreport similar difficulties in paying their housing costs. For example, 27.3 percent ofrecent leavers own homes compared with 18.2 percent of current recipients, 14.8percent report crowding compared with 25.1 percent of current recipients, and 26.3percent report a move in the past year compared with 36.8 percent of current recip-ients. About 4 in 10 families in both groups, however, report difficulties paying fortheir rent and utilities. Current and recent welfare recipients also report similar lev-els of food insecurity. About half of both groups report two or more food insecuri-ties and nearly 3 in 10 used a food bank in the past 12 months.32

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Table 18. Family Well-Being, 1997 and 2002 (weighted percents)2002 1997


Homeownership 18.2A,B 27.3B,† 47.1† 19.4B 19.2B 51.1Crowding: more than two people

per bedroom 25.1A,B 14.8 17.5† 19.6B 16.1 15.3Moved in the past year 36.8A,B,† 26.3B 19.3 30.0B 32.7B 18.3No one in social family owns a car 54.9A,B 36.3B 22.3† 58.0A,B 32.7B 17.6Unable to pay rent/utilities in past year 39.6B 43.8B 25.5 34.3B 39.6B 24.7Food insecurity in past year

Zero insecurities 33.4B 41.5B,† 50.1† 27.8B 32.9B 53.0One insecurity 11.7† 6.9B,† 13.2 12.0 15.6 13.5Two or more insecurities 53.7B 50.3B,† 35.0 58.9A,B 50.6B 32.5

Used a food bank 29.6B 28.0B 11.8 na na na

Source: Sample of low-income working-age parents from the 2002 and 1997 National Survey of America’s Families. Seetext for sample definition. na = not applicable (question not asked in 1997)A Significantly different from recent leavers at the 90% confidence interval.B Significantly different from those with no welfare experience at the 90% confidence interval.† Significantly different from 1997 at the 90% confidence interval.


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Relatively few changes in these measures of material well-being occur among thecurrent welfare families between 1997 and 2002, while two of the well-being mea-sures improve for recent leavers and several of the well-being measures deterioratefor the nonwelfare group. Significantly more current welfare families report movingin the past in the past year in 2002 than in 1997 (36.8 percent compared with 30.0percent). Among recent welfare leavers, on the other hand, home ownership increases(27.3 percent in 2002 versus 19.2 percent in 1997), and food security improves(41.5 percent report no insecurities in 2002 compared with 32.9 percent in 1997).In contrast, economic well-being declines for the nonwelfare group. Home owner-ship and car ownership decline, crowding increases, and more report food insecuri-ties. These results are consistent with the declining income picture for this groupdiscussed earlier.

The well-being of children in families may also reflect welfare reform and changesin the economy and families’ lives over this period. During the debate over passageof PRWORA, some argued that children would be harmed by the proposed reformsif families lost access to safety net benefits. A loss in income and an increase in povertywere projected, taking into account the cuts in food stamp benefits passed as part ofPRWORA and the long-run effects of time limits.33 Some argued that children couldbe harmed if single mothers were forced to focus too much on work, taking awaytime spent with children. However, as discussed earlier, states’ experiments withmandatory work requirements did not result in negative outcomes for children.

Measures of children’s behavior and emotional problems, whether their parentsare aggravated, and whether children are engaged in school and are in good healthall provide additional insights into the lives of children in low-income families. Youngchildren in nonwelfare families exhibit somewhat fewer problems than children liv-ing in current or former welfare families (table 19). Only 6.2 percent of families inthe nonwelfare group report that their child age 6 to 11 has many emotional orbehavioral problems in 2002, compared with 16.6 percent of families on welfareand 10.6 percent of former welfare recipients. Also, nonwelfare parents are muchless likely to be aggravated than current and recent welfare families.

The rate of aggravation among recent welfare families triples between 1997 and2002 (from 10.3 to 31.5 percent), while the rate for current welfare recipientsdeclines and the rate for the nonwelfare families remains about the same. The resultsuggests that parents with children age 6 to 11 who are struggling to balance newwork responsibilities with child rearing feel more aggravated as a result. Schoolengagement among young children in the nonwelfare group declines between 1997and 2002. Children are less likely to be in activities and less likely to be engaged inschool.

Results for children age 12 to 17 tell a different story. No changes occur amongthe child or parent behavior and emotional indicators for any of the three groups.One change occurs in school activities. A greater percentage of current welfare recip-ients report that their 12- to 17-year-old experienced no suspensions or expulsionsin 2002 than in 1997 (76.9 percent compared with 55.1 percent). In contrast, non-welfare families report a decline in school engagement for their teens and an increasein school expulsions.

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Disconnected Families As welfare reform evolved, more attention turned to families not able to leave wel-fare and those that left but had no employment. Also, more states turned their atten-tion to families at risk of exhausting their benefit time limit. Some states’ welfareprograms began to give greater attention to groups of recipients having a particu-larly hard time making the transition to work: recipients with multiple barriers towork, those nearing the time limit, and sanctioned families. As part of these efforts,it became clear that there were families that leave welfare but do not find work andremain “disconnected” from both the labor market and the welfare system. Thesefamilies have some of the greatest barriers to work and are at highest risk for severeeconomic hardship.

Our research identified this group of families in 1999 and later showed anincrease in the share of disconnected leavers between 1999 and 2002 (Loprest 2003).Disconnected leavers include adults in our former recipient group who at the timeof their interview were not working, did not have a working spouse, and were notreceiving TANF or SSI. In addition, these former recipients had not recently worked(within the last year) so were unlikely to be temporarily “between jobs.” In 1997,17.1 percent of leavers could be defined as disconnected; in 2002, 20.8 percent ofleavers fell into this category.34

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Table 19. Child Well-Being, 1997 and 2002 (weighted percents)2002 1997


Children age 6–11Behavior/Emotional

Child has many problems 16.6B 10.6 6.2 14.9B 12.2B 5.7Parents aggravated 17.1A,B 31.5B,† 11.0 25.7A,B 10.3 8.7

SchoolChild in activity 63.9 60.3 65.1† 60.8B 67.1B 77.3Child not engaged 28.8 22.8 21.9† 26.4B 25.4B 14.7

Child healthGood to excellent 88.4 88.3 91.4 92.0 93.8 92.1

Children age 12–17Behavior/Emotional

Child has many problems 16.3B 23.7B 8.0 25.3B 39.8B 7.6Parents aggravated 22.4B 18.6 13.1 24.0B 23.3 13.8

SchoolChild in activity 61.0B 73.2 73.9† 67.6 56.7B 78.2Child engaged 20.7 21.5 24.6† 27.2 22.7B 35.9No school skipping 69.2B 70.7 79.6 63.4B 59.9B 82.4No suspension or expulsion 76.9† 70.7 81.2† 55.1A,B 75.9B 85.8

Child healthGood to excellent 85.5 93.3 89.8 87.7 83.1 92.3

Source: Sample of low-income working-age parents from the 2002 and 1997 National Survey of America’s Families. Seetext for sample definition. A Significantly different from recent leavers at the 90% confidence interval.B Significantly different from those with no welfare experience at the 90% confidence interval† Significantly different from 1997 at the 90% confidence interval.


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Disconnected former recipients face multiple barriers to work.35 In 2002, over athird had three or more barriers, much higher than the 10.6 percent of all otherleavers (table 20). Disconnected and other leavers differ most in their work-readi-ness and health barriers.36 More than 40 percent of disconnected leavers have notworked in more than two years, compared with only 4.2 percent of other leavers.And well over half have not graduated from high school, more than double the ratefor other leavers. In addition, these disconnected leavers are more likely to reporthaving a health condition that limits work than other leavers.

The disconnected face multiple economic hardships. Three-fifths experiencemultiple food insecurities over the course of the year, compared with less than halfof other leavers. The disconnected face similar difficulties paying for housing costs(44.7 percent) to other leavers (43.6 percent). They also have significantly loweraverage incomes than other leavers, $6,178 compared with $17,681 in 2002. Thisincome does not include the value of other public benefits (food stamps, housingassistance, and Medicaid). Disconnected leavers receive food stamps more often thanother leavers (54.9 percent compared with 39.5 percent), but they receive housingassistance less often. Receipt of other government benefits among the disconnectedand other leavers is about the same. However, other leavers’ incomes would behigher if the EITC were included since many of them are working.

Although the share of disconnected leavers out of all leavers is similar in 1997and 2002, there have been changes in the composition of this group. The percent-age of disconnected leavers with three or more barriers has tripled since 1997 from12.2 to 37.6 percent. Significantly higher percentages of disconnected leavers haveless than a high school diploma, a health condition that limits work, or a mentalhealth problem than in 1997. These results suggest that as welfare reform rolledout, a greater percentage of families leaving welfare without work had serious imped-iments to work. Some of these families were sanctioned off of welfare because theydid not meet work or other requirements, possibly due to health considerations.Also, some of the disconnected leavers may have left welfare with work but lost theirjobs and had significant difficulties finding new work, since these leavers had notworked in the past year. Some families facing these problems return to TANF (andwe saw earlier that an increasing percentage of families returned to TANF over thisperiod), and some of these disconnected leavers may also return in the future.

However, we find that a much greater share of disconnected leavers are partici-pating in a work activity (job search, education, or job training) in 2002 (47.5 per-cent) than in 1997 (26.0 percent). In addition, disconnected leavers have a significantincrease in household income over time, from about $3,000 to about $6,000 in2002, although income levels are still very low. This group also did not experiencesignificant increases in material hardships or changes in receipt of government bene-fits. While the relative levels of economic hardship among this group remain high,some cope by drawing upon other family supports (Zedlewski and Nelson 2003).

It is important to note that low-income women with no former welfare experi-ence can also meet the disconnected definition. These disconnected individuals havenever received TANF, are not working and have not worked in the past year, do nothave a working spouse, and are not on SSI. In 2002, 12.4 percent of all low-incomewomen not receiving welfare are disconnected by this definition. Since they have

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not formerly received TANF, they cannot benefit from any programs or activitiesthat welfare offices implement to reconnect with disconnected leavers. In this waythey are even more “disconnected.” Many of them are likely eligible for TANF.

Disconnected women with no welfare experience are similar to disconnectedformer recipients in many ways. They are just as likely to have three or more barriersas former recipients, although the specific barriers differ. These women are morelikely to have graduated from high school and are much more likely to speak Span-ish, 22.6 percent compared with 5.4 percent of disconnected former recipients. This

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Table 20. Characteristics of Disconnected Leavers, Other Recent Leavers, and Disconnected with No WelfareExperience, 1997 and 2002 (weighted percents, except where noted)

2002 1997

Recent Leavers No Welfare Recent Leavers No Welfare Disconnected Other Disconnected Disconnected Other Disconnected

Barrier Count0 7.9† 33.9 13.2 22.5† 41.3 11.81 23.3† 36.8 31.1 35.3 37.0 24.42 31.2 18.7 22.1† 30.0 17.4 36.03+ 37.6A,† 10.6† 33.6 12.2A,B 4.3 27.9

BarriersNo work in 2+ years 41.6A 4.2 52.2 30.1A,B 5.6 58.3Less than high school diploma/GED 59.4A,B,† 26.7 33.9 37.5 28.5 40.5Age of youngest child < 1 14.6 14.4 17.5† 10.2 11.3 11Child in family receives SSI 6.0 5.0 8.5† 10.3 4.6 4.6Spanish speaking 5.4B 4.6 22.6 4.1B 5.2 25.2No car in family, not in metro area 16.3 8.5 8.6 11.9 5.0 5.9Health condition limits work 29.4A,† 15.9† 21.8 15.1 7.5 21.3Poor mental health 34.0† 26.9† 24.1 15.5 18.3 22.4

Participating in a Work Activity 47.5A,B,† 90.2 20.6 26.0A 90.9 22.2Hardships

Food insecurityZero insecurities 32.7 43.8† 41.5 36.4 32.2 38.4One insecurity 4.6B 7.5† 11.7 3.8A,B 18.0 15.6Two or more insecurities 61.1A,B 47.5 44.3 59.7B 48.7 45.1

Unable to pay rent/utilities in past year 44.7B 43.6 32.0 45.2 38.5 31.7

Mean Current Household Income ($2002) 6,178A,† 17,681 7,915† 2,907A,B 17,760 5,090Government Benefits

Food stamps 54.9B 39.5 29.6† 45.9 35.0 39.3Housing assistance

Government housing assistance 26.0B 31.1 23.3 na na naHousing w/o payment of rent 3.7 3.8 5.4 na na na

Health insuranceMedicaid or SCHIP 53.0 47.0† 35.4 47.2A 30.3 31.6Employer or other 11.0A,† 27.0 19.7 1.2A,B 24.9 20.6

Share of Relevant Groupa 20.8 79.2 12.4 17.1 82.9 9.9

Source: Sample of low-income working-age parents from the 2002 and 1997 National Survey of America’s Families. Seetext for sample definition.na = not applicable (question not asked in 1997)a For disconnected and other recent leavers, this is share of all recent leavers in relevant year. For nonwelfare disconnected,it is share of all nonwelfare in relevant year.A Disconnected leavers significantly different from all other leavers at the 90% confidence interval.B Disconnected leavers significantly different from disconnected with no welfare experience at the 90% confidence interval.† Significantly different from 1997 at the 90% confidence interval.


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reflects the large percentage of Hispanic women among all low-income women withno welfare experience.

Disconnected women without prior welfare history experience material hard-ships less often than disconnected recent leavers, but the two groups have similarlow levels of income in 2002—cash income for the nonwelfare disconnected aver-ages $7,915 (55 percent of the poverty level for a family of three), compared with$6,178 for disconnected former recipients (43 percent of the poverty level). In addi-tion, those with no welfare history receive other government benefits less often thandisconnected leavers, in particular food stamps and Medicaid or SCHIP. Lower ben-efit receipt could be due to lower eligibility, greater feelings of stigma, or less knowl-edge about eligibility.

Summary and ImplicationsWelfare reform substantially changed our nation’s approach to assisting low-incomefamilies with children. The legislation eliminated the federal entitlement to welfarecash assistance and gave states broad flexibility to design their own programs toachieve federal goals to promote work, increase two-parent families, discourage out-of-wedlock pregnancy, and decrease families’ dependency on welfare. Federal andstate policies both use a combination of “carrots” and “sticks” to reach these goals.The carrots include financial incentives to work and increased child care funds, andthe sticks include stricter work requirements, sanctions, and time limits. While origi-nal broad restrictions on benefit eligibility for legal immigrants were softened overtime, immigrants generally only become eligible for federal assistance after five yearsin the United States.

The paper examines the period when these new policies began to take shape anddescribes the changes in circumstances of low-income families: those on welfare orrecently on welfare and those with no welfare experience. We compare the circum-stances of the three groups and changes across time to describe the circumstances offamilies most likely to be affected by new policies. New policies had the potential toaffect families’ welfare participation—who came on, who stayed on, who exited, andwho did not come on. All three groups can also be affected by the economy andbroader societal trends. Over time, changes for one group can influence the compo-sition of other groups of low-income families.

Within our low-income study population, the relative well-being of the threegroups obviously varies considerably. Current and recent welfare families tend to besingle parents, although many single parents live with other adults, and nonwelfarefamilies tend to be married. Current recipients fare worse on economic indicatorsthan either of the other two groups. They are least likely to be employed and mostlikely to live in poverty. Recent leavers look more similar to the current recipientsthan the nonwelfare group, except for their employment rates. Employment ratesfor recent leavers are higher than for the nonwelfare group, probably reflecting theirlower marriage rates (and less potential to rely on a second earner in the family).Recent leavers experience higher poverty rates and more economic distress such asfood insecurity than the nonwelfare group.

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The relative status of the three groups changes somewhat over time. Our find-ings generally describe an improving picture for families on welfare, a relatively stag-nant picture for recent leavers, and a deteriorating picture for families with no welfareexperience. As we describe below, there are some exceptions to these general obser-vations, and some notable differences occur for subgroups.

Current recipients show marked improvement from 1997 to 2002 on severalfronts. Employment, wages, and income increased substantially, and poverty anddeep poverty fell. Although marriage declined, more recipients lived in two-parent,cohabiting families. The prevalence of barriers to work remained fairly constantamong recipients, even among more continuous longer-term recipients (stayers).And work increased among subgroups of recipients, including those with multiplebarriers to work and stayers. Receipt of government work supports (food stampsand health insurance) declined among current recipients, probably reflecting thehigher share of immigrants among this group. Family and child well-being, how-ever, did not improve, with one exception: parents reported less school suspensionand expulsion among their teens in 2002 than in 1997.

Our analysis cannot definitely say that the improvements among welfare recipi-ents can be attributed to new welfare policies. Nevertheless, most of the literature todate would suggest that welfare reform was responsible for at least a part of theimpact on these families over this period. Also, many improvements (particularly onwork and income) occur only among those on welfare and not for those who recentlyleft or never received welfare. We also note some compositional shifts in this groupthat likely contribute to the improving picture for welfare recipients. Current recipi-ents lived more often in the West (with relatively generous benefits) and less oftenin the South (with less generous benefits) in 2002 than in 1997.

Outcomes for those who recently left welfare (leavers) are more mixed. Employ-ment and income remained basically constant for this group on average, althoughreal wages improved for those working. This group more often received govern-ment work supports (health insurance and help paying for child care). The increasein receipt of other public benefits reflects administrative and policy improvements inprograms that deliver these benefits, as well as increases in federal and state fundingduring the years studied. Recent welfare leavers reported fewer food insecurities in2002 than in 1997 suggesting some improvement in material well-being. On theother hand, three times as many parents in the recent welfare group reported per-sonal stress (parent aggravation), perhaps suggesting the challenges of moving fromwelfare to work. In contrast to current recipients, the number of employment barri-ers, particularly poor health and the incidence of multiple barriers, increased amongformer recipients. The increase in barriers among leavers could reflect increased workamong recipients with barriers, enabling more people with barriers to leave welfare,or it could indicate that more people with barriers leave welfare because of sanctionsor difficulty coping with the new rules. Those who leave welfare with barriers mayhelp to explain the high levels of barriers among the roughly 10 percent of leaverswho are disconnected from welfare and work.

Low-income families with no welfare history present a somewhat more negativepicture. Like recent leavers, nonwelfare families experienced few changes their aver-age employment and income. Other indicators of family well-being generally deteri-

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orated. In addition, single parents living alone showed substantial declines in incomeand increases in deep poverty. Also, a significant group of these families falls intothe disconnected category (with no work or cash assistance) and shows substantialeconomic distress. The deteriorating picture for the nonwelfare families could reflectthe increasing share of recent immigrants in this group, who are not eligible forbenefits. The trends should also be considered in the context of the substantialdeclines in participation rates among those eligible for welfare benefits. Some donot enroll in welfare despite significant economic need. The promising trends forcurrent recipients must also be understood in connection with declining entry towelfare among eligible families.

PRWORA provides a strong message that family success depends on work andthat welfare provides only temporary help. To varying degrees, welfare offices aroundthe country moved away from an eligibility determination and check-writing opera-tion and toward policies and services that help recipients go to work. Our resultssuggest that this message has been heard. The legislation also clearly intended topromote two-parent families and marriage, and we see increases in cohabitation, ifnot marriage.

The 2006 reauthorization of welfare reinforced the original messages. Statesmust meet tougher work participation targets for their caseloads, and more resourceswill be available to encourage healthy marriages. The new law continues a 50 per-cent work participation rate for all families, but it recalibrates the caseload reductioncredit and broadens the group of families subject to work requirements. States willhave to increase work participation substantially to avoid federal penalties. Stateswill have to rethink their efforts (or lack of efforts) to work with two-parent familiesto improve work and potentially work with more “hard-to-serve” cases, while at thesame time maintaining services for working families so they remain in the labor mar-ket.

While states’ programs must comply with the new work requirements, they alsomust address unresolved issues in their existing welfare programs. Many states strug-gle to deliver effective and affordable services to move those with serious barriersinto employment, and most still do not know how time limits will affect low-incomefamilies. Research suggests that time limiting benefits broadly increases work, butwe are only beginning to learn about the families actually hitting the five-year life-time time limit—unresolved questions include who reaches a limit and why, andwhat an effective response should be. In addition, reforms have yet to be tested by aserious recession. Major declines in caseloads initially left states with more funds toprovide various services and supports to families moving toward employment. If arecession were to lead to large increases in caseloads and demands on states fixedblock grant funds, it is unclear how states or the federal government would respond.

State initiatives to increase child support should also be strengthened. More gen-erous policies that pass child support collections through to families and tougherenforcement of paternity establishment and collections could help all three groupsof low-income families with children. Our results point to very little progress inchild support receipt, at least through 2002. So far, this PRWORA goal has notbeen achieved. The 2006 welfare reauthorization provides states more flexibility topass through more child support dollars to children who currently receive or for-

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merly received welfare. State implementation of the new options potentially willincrease net incomes for current and former welfare families.

Similarly, efforts to encourage marriage among low-income families have not yetsucceeded. In fact, marriage declined among the nonwelfare group between 1997and 2002, a fact that surely contributed to their declining economic picture.Increases in cohabitation among current and nonwelfare parents could indicate someresponse to the two-parent message. The changing picture of marital status and liv-ing arrangements presented in this paper clearly points to the need for further mon-itoring and policies that support two-parent families.

The deteriorating picture for low-income families outside the welfare systemreinforces the necessity for states to think holistically about services for low-incomefamilies. Efforts to increase participation in government work support programsavailable to all low-income families regardless of welfare participation offer oneapproach to helping these families. As we have shown, even disconnected familieswith no welfare experience often do not receive food stamps or government healthinsurance. States should step up efforts to reach out broadly to low-income familiesby educating them about these benefits and how they can be accessed. The improv-ing benefit picture for former welfare recipients shows that these initiatives can besuccessful.

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Appendix A: Sample Selection and Definitions

This appendix provides additional details on our definition of terms and sampleselection. We first fully describe our definition and estimation of income and pro-vide a table showing our estimates of last year’s income, compared with current-yearincome discussed in the main text. We then discuss the impacts of our sample selec-tion criteria by examining how a subsample of our outcomes differs with changes inthese criteria.

Defining IncomeThe income screens we use to define our sample require estimates of last year’s cashfamily income and current cash family income. For these we create a measure of lastyear’s cash social family income and the current (interview) month’s cash social fam-ily income. Social family income refers to the combined income of all members ofthe social family—married couples and unmarried partners and all their children,along with members of their extended families who are related by blood. Last year’stotal social family income includes earnings, Social Security, disability benefits, pen-sions and annuities, unemployment compensation, worker’s compensation and vet-erans pay, interest and dividends, rental income, child support, foster care payments,TANF, general assistance, emergency assistance, money from friends and relatives,and “other income.” The current monthly social family income estimate includescurrent family earnings, current receipt of TANF, and an imputation of other incomebased on last year’s sources of income. The imputation assumes that relatively per-manent sources of income in the prior year continue into the current month (includ-ing Social Security, disability benefits, pensions and annuities, worker’s compensationand veterans pay, interest and dividends, rental income, and child support). Weadjust these values to represent monthly, current-dollar values. For families report-ing that they currently receive TANF benefits who reported a value in the prior year,we assign that value (adjusted to a monthly, current-year value). For families report-ing TANF in the current month but not in the prior year, we assign the medianTANF benefit for the appropriate family size.37 Current monthly income is multi-plied by 12 to estimate annual income.

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The estimated current monthly family income should be fairly accurate becausemost families receive the majority of their income from earnings, and current earn-ings are reported by the MKA for herself and her spouse/partner. Tabulations fromthe prior year’s data, for example, show that earnings accounted for 85 percent oftotal cash income for the “nonwelfare” group and 78 percent for the “recent leavers”group. Earnings account for 36 percent of total cash income for “current welfarefamilies” and cash welfare benefits account for about 50 percent of their income.Thus, our current monthly income estimate, based on current reported earningsand welfare receipt along with income from sources reported in the prior year thattend to remain relatively constant, should be an excellent approximation of currentincome status.

As noted earlier, we focus our analyses on the current income estimates becausethey align to current welfare status. Table A.1 shows our estimates of last year’sincome for the three groups. It can be compared to table 16 in the main text show-ing our estimates of current year income.

Findings for Different Sample CriteriaAs discussed in our data and methods section, we use two major criteria to restrictthe sample in our three groups.

• We exclude adults who are not parents of the children in the family and parentswho report receiving Supplemental Security Income (SSI) (the “eligible parent”criteria).

• We include only families that have income below 200 percent of the poverty leveleither last year or in the current year and not above 250 percent of the povertylevel in either period (the “low-income” criteria).

Either criteria has the potential to change our results relative to a sample thatdid not employ these restrictions. Although we believe these restrictions enhancethe ability to make comparisons across the three groups of low-income families, werealize that there is also interest in comparing all current recipients and all leaversrelative to a low-income group that has not received welfare in the past. For thisreason, and to demonstrate the extent to which our sample restrictions affect ourresults, table A.2 presents a subsample of our outcomes for three sample definitions.The first column shows results for the sample meeting both the “eligible parent”and “low-income” criteria, the same as in the main body of the paper. The secondcolumn shows results for the sample meeting the “eligible parent” criteria, but with-out any restrictions on income. The third column shows results for a sample withno restrictions. The table only shows results for the current welfare and recent leaversgroups because the income criteria is the main determinant of the nonwelfare groupand we do not consider the nonwelfare group without any income cut-off to be areasonable comparison group for consideration. Table A.2 shows result across thesample definitions for marital status and living arrangements, employment, andincome and poverty. A comparison of results across our final sample and the samplewith no restrictions on income shows family structure and employment are only

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52


THE URBANINSTITUTE

slightly different in levels and very similar in trend over time. In both sample defini-tions, marriage declined for recipients and leavers, and cohabitation increased sub-stantially for current recipients. Employment increased substantially for recipients inboth samples and declined among leavers. Restricting our sample to low-incomerecipients and leavers reduced the employment rate somewhat (by 1 to 2 percentagepoints) in 1997 but had no impact in 2002.

The sample without income or parental eligibility restrictions also shows similaroutcomes and trends in outcomes with a few exceptions. Marriage did not declineamong recent leavers in this sample, potentially because those who are not parentsof the child on TANF may be more likely to be married. In addition, the increase inwork among recipients is slightly lower, again potentially due to nonparent mothersbeing less likely to work.

The sample restrictions on income understandably make a difference in out-comes for income and poverty. Our restrictions purposely cut out those recipientsand leavers with higher incomes to match the nonwelfare, low-income sample. Therestrictions reduce median income and increase the shares in poverty. These differ-ences are more pronounced for leavers than recipients and larger for both groups in2002 than in 1997. In 1997, the difference in median income for leavers with andwithout the income restriction is about $1,200, and in 2002 it is about $3,000(both in 2002 dollars). Thus, by eliminating from our sample the most economi-cally “successful” cases, we not only show lower levels of income and higher rates ofpoverty, we also dampen the trend of increasing income and declining poverty.However, even with this dampening, the qualitative conclusions to be drawn fromboth samples are the same—among current recipients income increased and povertyfell substantially over this period and among leavers income and poverty remainedfairly steady.

Additional differences in income and poverty when considering the sample with-out the income or the TANF eligibility restrictions (not a parent and parents onSSI) are minimal. For leavers, income and poverty are very similar, while for currentrecipients median income is roughly $1,000 higher when including nonparents andSSI recipients and similarly poverty rates are somewhat lower. This probably reflectsthat in some circumstances (e.g., foster care) nonparents can have higher incomeswhile the child remains eligible for TANF benefits.

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53

Table A.1. Past-Year Income Relative to Poverty and Income, 1997 and 2002 (weighted percents,except where noted)

2002 1997 Current Recent leaver No welfare Current Recent leaver No welfare

< 50% poverty 31.4 23.4 11.1 46.0 22.8 11.650% – < 100% poverty 27.1 26.4 20.5 35.4 37.7 18.7100% – < 150% of poverty 21.7 23.1 26.5 10.6 22.7 25.2150% of poverty and over 19.8 27.1 41.9 8.0 16.8 44.5

Median social family income ($) 15,300 17,900 24,000 9,113 13,882 24,256

Source: Sample of low-income working-age parents from the 2002 and 1997 National Survey of America’sFamilies. See text for sample definition.


In summary, this comparison of outcomes across samples suggests that whileour restrictions allow for cleaner comparisons of outcomes our three groups, theydo not change our non-income results substantially nor our discussion of trends inincome and poverty over time. However, in examining the level of income and dis-tribution of poverty for our sample, it is important for the reader to keep in mindthat we are presenting results for a low-income sample.

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54


THE URBANINSTITUTEs

55

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290


THE URBANINSTITUTE

Appendix B: Results for All Three NSAF Years

(1997, 1999, and 2002)

Appendix B Tables

Sample Creation 58

Family Structure and Marital Status 59

Living Arrangements 59

Demographic Characteristics 60

Current Employment and Hours of Work by Family Structure, 2002, 1999, and 1997 62

Work Activities in Past Year, 2002, 1999, and 1997 63

Reasons for Leaving Welfare, Currently on Welfare, 2002, 1999, and 1997 63

Characteristics of Jobs, 2002, 1999, and 1997 64

Occupation/Industry of Jobs, 2002, 1999, and 1997 65

Barriers to Work, 2002, 1999, and 1997 66

Multiple Barriers to Work, 2002, 1999, and 1997 67

Percent with Barriers to Work by Type of Welfare Recipient, 2002, 1999, and 1997 67

Percent Currently Working among Those within Barriers to Work 68

Share of Current Income from Different Sources 68

Current Family Cash Income Relative to Poverty, 2002, 1999, and 1997 69

Receipt of Other Government Support 70

Family Well-Being 71

Disconnected Recent TANF Leavers and No Welfare Experience, 2002, 1999, and 1997 72

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Table B.1. Sample Creation

1997Current Recent No

recipients leavers welfare AllBase sample: families with children 1,831 1,290 15,585 18,706Families without TANF-eligible adults:

No parent -183 -45 -322 -550Parent on SSI -126 -43 -160 -329

Income screen: income less than 200% of federal poverty level this year or last year and never above 250% in either year -64 -153 -8610 -8827

Unweighted sample 1,458 1,049 6,493 9,000Weighted sample 1,845,921 1,168,596 7,606,016 10,620,533


recipients leavers welfare AllBase sample: families with children 850 987 18,416 20,253Families without TANF-eligible adults:


Income screen: income less than 200% of federal poverty level this year or last year and never above 250% in either year -49 -158 -12257 -12464

Unweighted sample 601 752 5,614 6,967Weighted sample 1,111,595 966,907 7,938,774 10,017,276


recipients leavers welfare AllBase sample: families with children 806 732 18,029 19,567Families without TANF-eligible adults:


Income screen: income less than 200% offederal poverty level this year or last year and never above 250% in either year -55 -137 -11,846 -12,038

Unweighted sample 530 537 5,523 6,590Weighted sample 840,445 718,457 7,715,358 9,274,260

Source: Sample of low-income working-age parents from the 2002, 1999, and 1997 National Survey of America’s Families. See text for sample definition.


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59

Table B.3. Living Arrangements (weighted percents)Currently on Welfare 2002 1999 1997Cohabiting 13.2 16.4 6.2Married alone 9.1 9.8 11.7Married with others 2.7 2.2 2.9Single alone 46.3 48.2 54.5Single with others 28.7 23.4 24.5

Adult child 5.4 4.9 6.1Nonrelative 5.8 14.2 2.8Relative 17.5 4.4 15.5

Recent Leaver 2002 1999 1997Cohabiting 7.0 14.7 7.8Married alone 19.3 20.3 23.3Married with others 7.3 3.3 5.1Single alone 43.9 43.4 41.9Single with others 22.6 18.1 21.9


No Welfare 2002 1999 1997

Cohabiting 9.1 6.3 5.1Married alone 41.1 45.0 51.0Married with others 13.5 14.4 12.5Single alone 22.2 21.6 20.8Single with others 13.9 12.7 10.6



Table B.2. Family Structure and Marital Status (weighted percents)Currently on Welfare 2002 1999 1997

Cohabiting 13.2 16.4 6.2Married 11.8 12.0 14.6Previously married 28.8 27.4 34.3Never married 46.1 44.2 44.6Recent Leaver 2002 1999 1997Cohabiting 7.0 14.7 7.8Married 26.6 23.6 28.4Previously married 21.9 26.4 29.1Never married 44.6 35.2 34.7No Welfare 2002 1999 1997Cohabiting 9.1 6.3 5.1Married 54.6 59.4 63.5Previously married 21.8 21.4 21.7Never married 14.3 12.9 9.7



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60

Table B.4. Demographic Characteristics (weighted percents)Currently on Welfare 2002 1999 1997Age of MKA

< 25 28.4 25.8 24.025–34 36.1 44.7 44.135+ 35.5 29.5 32.0

Number of children1 child 25.9 26.6 23.02 children 28.4 28.7 34.83 or more children 45.7 44.7 42.3

Age of youngest childUnder 1 year 18.3 17.5 15.81–4 years 39.5 42.2 44.25–11 years 29.8 34.8 28.612+ years 12.5 5.6 11.4

Education levelLess than high school 41.5 46.1 39.8GED or high school diploma 39.2 31.8 36.9Some college 15.8 17.7 20.7College degree 2.9 2.9 2.2

Recent Leaver 2002 1999 1997Age of MKA

< 25 26.4 23.0 27.625–34 45.0 42.7 45.035+ 28.7 34.3 27.4




No Welfare 2002 1999 1997Age of MKA

< 25 15.1 14.9 14.425–34 38.9 39.0 39.835+ 46.1 46.1 45.8




Source: Sample of low-income working-age parents from the 2002, 1999, and 1997 National Survey of America’s Families. See text for sample definition. MKA = most knowledgaeble adult


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61

Table B.4. (continued)Currently on Welfare 2002 1999 1997

RegionNortheast 14.3 15.0 17.0Midwest 21.8 18.8 23.0South 25.9 26.1 29.1West 38.0 40.1 31.0

Race/EthnicityHispanic 30.8 21.7 24.3Black, non-Hispanic 35.4 42.0 32.3Other, non-Hispanic 33.8 36.3 43.5

Spanish speaking 10.9 5.3 6.5Immigrant status

U.S.-born citizen 84.1 90.1 92.2Foreign-born naturalized U.S. citizen 4.6 1.2 1.2Foreign-born noncitizen 11.3 8.7 6.6

Of the foreign-born:Immigrated 5 or more years ago?a 89.6 85.6 81.7Immigrated less than 5 years ago?a 10.4 14.4 14.6

Recent Leaver 2002 1999 1997Region

Northeast 12.3 13.2 8.7Midwest 22.9 22.7 27.5South 47.1 42.0 43.7West 17.7 22.1 20.2


Spanish Speaking 4.8 3.7 5.0Immigration Status



No Welfare 2002 1999 1997

RegionNortheast 18.2 18.8 19.7Midwest 18.7 19.7 17.5South 39.6 38.1 39.3West 23.5 23.4 23.5


Spanish speaking 24.4 19.6 18.4Immigrant status



Source: Sample of low-income working-age parents from the 2002, 1999, and 1997 National Survey of America’s Families. See text for sample definition. a There are slight differences in questions across 1997, 1999, and 2002.


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Table B.5. Current Employment and Hours of Work by Family Structure, 2002, 1999, and 1997(weighted percents)Currently on Welfare 2002 1999 1997Currently employed

All MKAs 29.2 31.5 20.9Single 33.3 30.9 20.3Married/cohabiting 15.7 33.2 23.7Either adult in married/cohabiting 42.8 65.3 52.9

Weekly hours of workAll< 20 13.4 22.2 35.821–34 29.9 21.7 24.135+ 56.7 56.1 40.2

Recent Leavers 2002 1999 1997Currently employed



No Welfare 2002 1999 1997Currently employed



Source: Sample of low-income working-age parents from the 2002, 1999, and 1997 National Survey of America’s Families. See text for sample definition. Note: Hours of work only reported for employed respondents.


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63

Table B.7. Reasons for Leaving Welfare, Currently on Welfare, 2002, 1999, and 1997 (weighted percents)2002 1999 1997

Earnings increased, got job, worked more on same job 56.0 56.2 70.0Did not follow program rules 6.4 13.6 6.7Anministrative problem, mix up 1.3 0.7 0.2Did not want or need, not interested, too much hassle 17.0 10.6 8.6Change in family situation 3.8 4.8 3.8Income from other sources or assets 7.5 6.0 4.8Moved 1.4 1.6 5.4Reached end of time limit 4.7 3.1 0.5Other 2.0 3.5 0.0

Source: Sample of low-income working-age parents from the 2002, 1999, and 1997 National Survey of America’s Families. See text for sample definition. Note: 328 respondents who were determined to be recent leavers were in error skipped out of questions on why they leftwelfare in 1997. These and those who did not answer in 2002 and 1999 (35 in 2002 and 46 in 1999) are omitted fromthe table.

Table B.6. Work Activities in Past Year, 2002, 1999, and 1997 (weighted percents)Currently on Welfare 2002 1999 1997Working 39.1 43.0 30.0Education 16.2 11.8 19.2

GED/high school classes 9.0 5.4 7.3College classes 7.2 6.4 11.9

Job training 12.7 12.7 11.0Job search 22.6 21.6 16.0

Any work activity 60.9 61.5 51.6Recent Leavers 2002 1999 1997Working 69.9 76.5 72.6Education 16.6 23.4 14.0



Any work activity 81.3 82.3 79.8No Welfare 2002 1999 1997Working 57.3 58.2 60.1Education 8.9 9.9 8.8



Any work activity 62.3 64.3 65.1



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Table B.8. Characteristics of Jobs, 2002, 1999, and 1997 (weighted percents, except where noted)Currently on Welfare 2002 1999 1997Median wage ($) 7.00 6.50 6.16Any paid leave 41.5 na naPaid or unpaid maternity/paternity leave 68.2 na naPrimarily work at nighta 26.9 27.4 31.1Employer offers health insuranceb 52.2 53.6 40.4Has own-employer health insurance 9.9 5.1 4.3Job tenure

< 6 months 42.7 37.6 40.66 months – < 2 years 30.0 45.1 36.92 – < 5 years 24.2 12.7 17.35+ years 3.1 4.7 5.1

Recent Leavers 2002 1999 1997Median wage ($) 7.75 7.00 7.01Any paid leave 56.9 na naPaid or unpaid maternity/paternity leave 77.8 na naPrimarily work at nighta 29.4 28.7 31.9Employer offers health insuranceb 66.0 64.9 64.4Has own-employer health insurance 23.5 25.3 17.5Job tenure


No Welfare 2002 1999 1997Median wage ($) 8.15 7.45 7.85Any paid leave 64.6 na naPaid or unpaid maternity/paternity leave 82.5 na naPrimarily work at nighta 23.9 23.2 23.5Has own-employer health insurance 35.3 37.1 33.8Job tenure


Source: Sample of low-income working-age parents from the 2002, 1999, and 1997 National Survey of America’s Families. See text for sample definition. na = not applicable (question not asked in 1999/1997)Notes: Sample is working respondents excluding those that are self-employed or report unpaid work. All wage datareported in 2002 dollars.a Respondents working mostly between the hours of 6 p.m. and 6 a.m.b Working for an employer that offers health insurance does not mean the worker considered here was eligible for thiscoverage.


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65

Table B.9. Occupation/Industry of Jobs, 2002, 1999, and 1997 (weighted percents)Currently on Welfare 2002 1999 1997Occupation

Service 54.4 34.2 40.9Sales 16.1 25.5 17.1Clerical/administrative support 9.0 17.9 18.0Professional/managerial/technical 10.1 8.4 9.5Craft/operators/laborers/transportation 10.4 13.9 14.5

IndustryService 51.7 43.6 52.3Wholesale/retail trade 34.4 38.2 30.8Manufacturing 6.2 8.7 6.6Construction 0.9 1.5 1.5Finance/insurance/real estate 0.3 2.1 3.0Transportation/communications/utilities 1.1 4.1 1.3Othera 5.4 1.8 4.5

Recent Leavers 2002 1999 1997Occupation



No Welfare 2002 1999 1997Occupation



Source: Sample of low-income working-age parents from the 2002, 1999, and 1997 National Survey of America’s Families. See text for sample definition. a Includes agriculture, forestry, and public administration.


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66

Table B.10. Barriers to Work, 2002, 1999, and 1997 (weighted percents)Currently on Welfare 2002 1999 1997Work experience

Never 8.9 5.7 11.1No work in past 2 years 19.6 22.5 32.2

Less than high school reducation 41.4 46.1 39.8Age of youngest child <1 18.3 17.5 15.8Child receives SSI 7.6 5.9 7.9Spanish speaking 10.9 5.3 6.5No car, does not live in MSA 4.9 8.3 9.1Health (respondent)

Health condition limits work 25.2 30.4 22.7Mental health poor (10th %ile) 24.4 28.2 21.8

Recent Leavers 2002 1999 1997Work experience




No Welfare 2002 1999 1997Work experience






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67

Table B.12. Percent with Barriers to Work by Type of Welfare Recipient, 2002, 1999, and 1997 (weighted percents)New Entrants 2002 1999 1997No work in past two years 26.2 14.7 23.3Less than high school education 31.9 38.9 35.4Age of youngest child < 1 21.8 37.2 27.1Child receives SSI 7.2 3.2 1.4Spanish speaking 5.2 3.3 7.4No car in family/not in MSA 7.3 5.6 13.6Health (respondent)


Cyclers 2002 1999 1997No work in past two years 18.7 26.1 27.7Less than high school education 43.0 40.4 43.2Age of youngest child < 1 22.2 20.6 14.7Child receives SSI 8.8 6.8 4.6Spanish speaking 4.6 5.7 1.8No car in family/not in MSA 3.5 9.7 8.1Health (respondent)


Stayers 2002 1999 1997No work in past two years 36.9 35.8 51.4Less than high school education 45.8 51.2 38.8Age of youngest child < 1 13.3 6.0 14.9Child receives SSI 6.8 7.3 9.8Spanish speaking 18.9 6.4 7.7No car in family/not in MSA 2.4 8.3 8.7Health (respondent)



Table B.11. Multiple Barriers to Work, 2002, 1999, and 1997 (weighted percents)Currently on Welfare 2002 1999 1997Number of barriers

0 20.3 15.5 18.31 29.2 27.6 27.42 28.9 38.6 33.03 13.5 11.2 13.24+ 8.0 7.0 8.0

Recent Leavers 2002 1999 1997Number of barriers

0 28.5 37.8 38.11 34.0 29.8 36.72 21.3 20.2 19.63 14.4 8.4 4.44+ 1.8 3.7 1.3

No Welfare 2002 1999 1997Number of barriers

0 31.5 33.8 36.71 30.6 33.5 32.82 20.6 18.7 18.93 13.3 10.7 9.24+ 4.0 3.3 2.4



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68

Table B.14. Share of Current Income from Different Sources (all families, weighted percents)Currently on Welfare 2002 1999 1997Earnings 49.2 49.8 42.2

Self, partner 43.0 45.3 32.4Other earnings 6.2 4.5 9.8

Child support 1.9 2.2 1.8SSI and disability 13.3 11.2 11.6Welfare 34.3 35.3 43.3Other sources 1.4 1.6 1.1Recent Leaver 2002 1999 1997Earnings 85.3 89.7 90.1


Child support 3.7 3.3 2.8SSI and disability 10.7 6.4 6.6Welfare 0.3 0.1 0.1Other sources 0.0 0.6 0.4No Welfare 2002 1999 1997Earnings 92.2 91.7 92.4


Child support 3.2 2.6 2.6SSI and disability 3.9 4.4 3.7Welfare 0.0 0.0 0.0Other sources 0.8 1.4 1.3


Table B.13. Percent Currently Working among Those with Barriers to Work, 2002, 1999, and 1997(weighted percents)Currently on Welfare 2002 1999 1997Less than high school education 26.6 26.0 12.4Age of youngest child < 1 15.7 33.0 10.5Child receives SSI 33.0 25.7 12.8Spanish speaking 27.4 22.9 12.9No car in family/not in MSA 5.0 11.2 12.5Health (respondent)


Recent Leavers 2002 1999 1997Less than high school education 46.9 51.3 49.7Age of youngest child < 1 53.3 63.6 65.2Child receives SSI 64.6 39.7 43.7Spanish speaking 54.5 82.2 54.3No car in family/not in MSA 36.4 59.0 46.2Health (respondent)


No Welfare 2002 1999 1997Less than high school education 38.6 39.5 47.0Age of youngest child < 1 35.8 33.9 36.3Child receives SSI 36.1 38.4 52.8Spanish speaking 39.5 41.7 42.9No car in family/not in MSA 37.3 34.3 55.9Health (respondent)




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69

Table B.15. Current Family Cash Income Relative to Poverty, 1997, 1999, 2002 (all families, weightedpercents except where noted)Currently on Welfare 2002 1999 1997<50% poverty 44.1 49.5 60.550% – <100% poverty 29.0 25.9 27.5100% – <150% of poverty 17.5 18.7 8.5150% of poverty and over 9.4 5.9 3.5

Median social family income ($) 10,860 9,153 7,028Recent Leaver 2002 1999 1997<50% poverty 31.3 26.4 27.950% – <100% poverty 30.1 29.6 35.7100% – <150% of poverty 23.8 26.8 22.8150% of poverty and over 14.8 17.1 13.6

Median social family income ($) 13,824 14,059 14,257No Welfare 2002 1999 1997<50% poverty 16.5 14.0 14.750% – <100% poverty 23.7 22.2 23.5100% – <150% of poverty 27.8 29.1 28.8150% of poverty and over 32.0 34.7 33.0

Median social family income ($) 20,995 22,618 21,521

Source: Sample of low-income working-age parents from the 2002, 1999, and 1997 National Survey of America’s Families. See text for sample definition. Note: All dollar amounts reported in 2002 dollars.


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70

Table B.16. Receipt of Other Government Support (all families, weighted percents)Currently on Welfare 2002 1999 1997Government child care assistance 21.4 31.4 19.2Health insurance

Medicaid or SCHIP 85.6 85.4 95.3Employer or other 7.1 5.1 3.0

Housing assistance Government housing assistance 39.8 37.8 naHousing w/o payment of rent 3.1 4.1 na

Food stamps 87.6 89.4 92.8Heard of EITC 62.7 61.0 naRecent Leaver 2002 1999 1997Government child care assistance 40.8 34.7 27.6Health insurance


Housing assistanceGovernment housing assistance 30.0 32.7 naHousing w/o payment of rent 3.8 4.6 na

Food stamps 42.7 32.3 36.8Heard of EITC 79.5 77.4 naNo Welfare 2002 1999 1997Government child care assistance 7.9 8.2 6.1Health insurance


Housing assistance Government housing assistance 13.4 10.0 naHousing w/o payment of rent 4.1 3.9 na

Food stamps 13.7 10.7 10.9Heard of EITC 57.6 57.7 na

Source: Sample of low-income working-age parents from the 2002, 1999, and 1997 National Survey of America’s Families. See text for sample definition.na = not applicable (question not aked in 1997)


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Table B.17. Family Well-Being (all families, weighted percents)Currently on Welfare 2002 1999 1997

Home ownership 18.2 17.2 19.4Crowding: more than two people per bedroom 25.1 25.0 19.6Moved in the past year 36.8 38.9 30.0No one in social family owns a car 54.9 58.2 58.0Unable to pay rent/utilities in past year 39.6 44.0 34.3Food insecurity

Zero insecurities 33.4 31.6 27.8One insecurity 11.7 13.4 12.0Two or more insecurities 53.7 53.0 58.9

Recent Leaver 2002 1999 1997Home ownership 27.3 25.2 19.2Crowding: more than two people per bedroom 14.8 16.8 16.1Moved in the past year 26.3 33.6 32.7No one in social family owns a car 36.3 32.9 32.7Unable to pay rent/utilities in past year 43.8 46.4 39.6Food insecurity


No Welfare 2002 1999 1997Home ownership 47.1 51.1 51.1Crowding: more than two people per bedroom 17.5 16.4 15.3Moved in the past year 19.3 18.8 18.3No one in social family owns a car 22.3 20.4 17.6Unable to pay rent/utilities in past year 25.5 23.6 24.7Food insecurity


Source: Sample of low-income working-age parents from the 2002, 1999, and 1997 National Survey of America’s Families. See text for sample definition. Note: Percentages may not add up to 100 because of omitted categories.


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Table B.18. Disconnected Recent TANF Leavers and No Welfare Experience, 2002, 1999, and 1997(weighted percents)Recent Leavers 2002 1999 1997Barrier Count

0 7.9 13.4 22.51 23.3 36.8 35.32 31.2 20.9 30.03+ 37.6 28.9 12.2

BarriersNo work in 2+ years 41.6 42.2 30.1Less than HS diploma/GED 59.4 40.4 37.5Age of youngest child < 1 14.6 9.0 10.2Child in family receives SSI 6.0 20.5 10.3Spanish speaking 5.4 3.4 4.1No car in family/not in MSA 16.3 5.5 11.9Health condition limits work 29.4 28.3 15.1Poor mental health 34.0 30.9 15.5

Participating in a work activity 47.5 30.8 26.0Hardships

Food insecurityZero insecurities 32.7 35.7 36.4One insecurity 4.6 6.0 3.8Two or more insecurities 61.1 58.3 59.7

Unable to pay rent/utilities in past year 44.7 42.1 45.2Food stamps 54.9 39.6 45.9Housing assistance

Government housing assistance 26.0 36.3 naHousing w/o payment of rent 3.7 9.3 na

Health insurancea


All: N (1999) 112 115 129No Welfare 2002 1999 1997Barrier Count

0 13.2 8.0 11.81 31.1 27.4 24.42 22.1 28.8 36.03+ 33.6 35.8 27.9

BarriersNo work in 2+ years 52.2 59.7 58.3Less than HS diploma/GED 33.9 44.0 40.5Age of youngest child < 1 17.5 21.7 11.0Child in family receives SSI 8.5 6.6 4.6Spanish speaking 22.6 25.1 25.2No car in family/not in MSA 8.6 6.0 5.9Health condition limits work 21.8 23.7 21.3Poor mental health 24.1 22.0 22.4

Participating in a work activity 20.6 27.1 22.2Hardships

Food insecurityZero insecurities 41.5 40.9 38.4One insecurity 11.7 13.5 15.6Two or more insecurities 44.3 45.6 45.1

Unable to pay rent/utilities in past year 32.0 24.7 31.7Food stamps 29.6 35.0 39.3Housing assistance

Government housing assistance 23.3 20.7 naHousing w/o payment of rent 5.4 6.4 na

Health insurancea


All: N (1999) 619 579 577

Source: Sample of low-income working-age parents from the 2002, 1999, and 1997 National Survey of America’s Fami-lies. See text for sample definition.na = not applicable (question not asked in 1997)aHealth insurance coverage of parent, child, or both.


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Notes1. While all states had flexibility to set needs standards and benefit levels under AFDC, federal rules gener-

ally defined work requirements, income disregards, treatment of different family sizes, and benefit guaran-tees. States had to apply for waivers from the federal rules under strict requirements that results beevaluated and cost neutral.

2. See Blank and Haskins (2001), 6–15, for a full discussion of these changes.

3. The cities are Boston, Chicago, and San Antonio.

4. In-person interviews actually were conducted using cell phones to ensure consistency between the phoneand in-person samples. See Brick, Strickler, and Ferraro (2004).

5. We exclude those that left welfare more than two years ago from the analysis because we believe the groupis too heterogeneous to provide coherent, interpretable results. For those that left welfare more than twoyears before their interview, the NSAF questionnaire does not allow us to identify the exact date of leaving.

6. This requires estimates of both current and last year’s income. See appendix A for the definitions ofincome.

7. These restrictions correspond to two important reasons that define “child only” welfare cases. For parentson SSI, states exclude SSI benefits and calculate welfare eligibility for the children, and adults who arenot parents of the children typically are excluded when calculating benefit eligibility. We do not, how-ever, exclude all reasons for child-only cases. Children of ineligible, noncitizen immigrant parents areeligible as child-only TANF beneficiaries if they are born in the United States. As we discuss later,however, many states allow TANF eligibility for noncitizen immigrants (using their own state dollars).We chose to leave all immigrant parents in the sample, lacking any way to sort out the ineligible fromeligible parents. Also, children of parents sanctioned for not cooperating with work requirements aredesignated as child-only units until the sanction is removed. In these families, however, the parentclearly is subject to work requirements.

8. See HHS (2005b) and Farrell et al. (2000) for descriptions of child-only units in the welfare caseload.

9. Our sample restrictions affect the relative shares of leavers and stayers during the two periods, but therestrictions do not appreciably affect the changes over time. For example, without the income screen, wefind that in 1997, 42 percent of those on in the prior two years are currently off welfare while in 2002the percentage is 49.

10. Due to the structure of the NSAF data, we cannot define stayers using a period of continuous receiptlonger than two years.

11. The tables focus on results for 1997 and 2002, but appendix B also provides interim results from the1999 NSAF. We occasionally refer to the interim results in the text.

12. The NSAF specifically asked respondents to identify cohabiting individuals, defined as domestic partners.Cohabiting adults are distinguished from other nonrelative adults.

13. As noted earlier, Acs and Nelson (2004) find some significant and positive effects of strengthened childsupport collection and family caps on the formation of two-parent low-income families between 1997and 1999.

14. States with relatively large shares of foreign-born citizens fall on both sides of the immigrant eligibilitydivide. For example, California, Hawaii, and New York (with 27, 18, and 21 percent of their populationsforeign born) provide benefits, but Florida, New Jersey, and Texas (with 18, 19, and 15 percent foreignborn) do not provide benefits to legal immigrants in the United States less than five years. (The U.S.population is 12 percent foreign born, on average.) These data are from the 2002 American CommunitySurvey (U.S. Census 2003).

15. A separate work requirement for two-parent families was much higher, 90 percent. Few states came closeto this rate before reauthorization, although the caseload reduction credit and establishment of separatestate programs for two-parent families allowed most states to avoid penalties for failing to meet the rate.

16. Since some former recipients left within the year, activities in the past year can reflect both time on andoff welfare.

17. Survey respondents gave open-ended answers that were then coded into categories. About 5 percent ofleavers reported multiple reasons for leaving. These respondents are categorized using a hierarchy ofresponses with employment first.

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18. Mean hourly wages of current recipients are not significantly different from the other two groups. Thiscomes in part from the large variation in hourly wages of current recipients.

19. Metro area is defined as a Metropolitan Statistical Area. Poor mental health is measured as the respon-dent’s score on a 5-question scale derived from the 38-item Mental Health Inventory (Ehrle and Moore1999). The measure covers anxiety, depression, loss of behavioral or emotional control, and psychologicalwell-being. We include those scoring less than the threshold score for the 10th percentile of womennationally.

20. This is a descriptive statistical analysis. A significant relationship between a given barrier and work doesnot mean that barrier necessarily causes lower employment. It is still possible that other factors that weare not controlling for co-occur with that specific barrier and are causing lower rates of employment.

21. It is important to note that these regressions do not control for demographics such as race and gender.While there may be significant differences across these groups in the prevalence of barriers, we wantedto measure the direct connection of these barriers to work without regard to different prevalence bysubgroups.

22. This result could also reflect a change in the composition of the group of welfare recipients with less thana high school education, although to be consistent with our findings that would mean recipients with loweducation in 2002 were more “job ready” in other ways than those in 1996, which seems unlikely.

23. As explained in appendix A, we use current income estimates for the comparisons because current incomealigns better with current welfare status than income received in the previous year.

24. While other types of disability benefits such as worker’s compensation and veterans benefits are includedin this income category, most receive either SSI or disability.

25. A minority of states chose to retain the pass-through.

26. As discussed in our methods section, poverty is higher among our low-income recent leaver group thanin the sample without income restrictions. However, we find similar trends over time in the unrestricteddata as in our low-income sample. Results on poverty and income for the sample without income restric-tions are shown in appendix A.

27. While the estimated increase in food stamp receipt for recent leavers is not statistically significant for oursample, other work shows significant increases for recent leavers with incomes below the poverty level(Zedlewski and Rader 2005).

28. Zedlewski and Rader (2005) show that neither compositional nor eligibility changes explain the increasein food stamp participation among recent leavers and conclude that the changes in states procedureslikely account for the increase over time.

29. Health insurance coverage indicates coverage for the parents, the children, or both.

30. The NSAF does not have housing assistance for 1997.

31. The U.S. Treasury Department estimates that from 75 to 85 percent of eligible families receive this credit(Holtzblatt 2004).

32. Food insecurity measures families’ concerns about having enough money to pay for food. The NSAFasked adults whether (1) they or their families worried that food would run out before they got money tobuy more, (2) the food they bought did run out, or (3) one or more adults ate less or skipped mealsbecause there was not enough money to pay for food. See Urban Institute (1999) for a complete descrip-tion of this indicator of well-being.

33. Zedlewski, Clark, Meier and Watson (1996) projected an increase in poverty of 1 million children, usinga broad measure of poverty that accounted for all safety net programs affected by the PRWORA legisla-tion. About half the projected poverty increase was due to elimination of noncitizen immigrant eligibilityfor a variety of safety net benefits, and the other half was due to cuts in food stamp benefits for U.S. citi-zens and the estimate that while 70 percent of mothers leaving welfare likely would find work, mostwould work part time. History now shows that child poverty decreased in the period immediately follow-ing welfare reform. The effects of the limitations in benefit eligibility for noncitizen immigrants weremuted when many states maintained their eligibility and eventually Congress restored federal eligibilityfor many noncitizen immigrants. More important, the strong economy of the late 1990s was not pro-jected. While the assumption that only about 70 percent of mothers leaving welfare would find work wasactually a bit optimistic, the assumption that the majority of welfare leavers would work part time was toopessimistic (or proven incorrect as a result of the strong economy). Also, the model did not projectemployment gains among other adults in welfare families and gains among families not on welfare thatoccurred in the years right after welfare reform was implemented. Improvements in child poverty in thelate 1990s occurred generally and are not necessarily associated with welfare receipt (Nichols 2006).

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34. The percent disconnected declined significantly between 1997 and 1999, then increased significantly in2002.

35. We use the same set of eight barriers defined earlier.

36. Because of small sample sizes, only fairly large percentage point differences are statistically significant.

37. These same procedures were used in Zedlewski and Rader (2005) and Loprest (2001).

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ReferencesAcs, Gregory, and Pamela Loprest. 2001. “Final Synthesis Report of Findings from ASPE’s ‘Leavers’

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Bitler, Marianne, Jonah Gelbach, and Hillary Hoynes. 2006. “Welfare Reform and Children’s LivingArrangements.” Journal of Human Resources 41(1): 1–27.

Blank, Rebecca M. 2002. “Evaluating Welfare Reform in the United States.” Journal of Economic Liter-ature 40(4): 1105–66.

Blank, Rebecca M., and Ron Haskins. 2001. The New World of Welfare. Washington, DC: BrookingsInstitution Press.

Bloom, Dan, and Charles Michalopoulos. 2001. How Welfare and Work Policies Affect Employment andIncome: A Synthesis of Research. New York: MDRC.

Brick, J. Michael, Teresa Strickler, and David Ferraro 2004. “2002 NSAF Variance Estimation.” Assess-ing the New Federalism Methodology Report 4. Washington, DC: The Urban Institute.

Cutler, David. 2002. “Employee Costs and the Decline in Health Insurance Coverage.” Working Paper9036. Cambridge, MA: National Bureau of Economic Research.

Danziger, Sandra, Ariel Kalil, and Nathaniel J. Anderson. 2000. “Human Capital, Health and MentalHealth of Welfare Recipients: Co-Occurrence and Correlates.” Journal of Social Issues 54(4):637–56.

Ehrle, Jennifer, and Kristen Anderson Moore. 1999. “1997 NSAF Benchmarking Measures of Childand Family Well-Being.” Assessing the New Federalism Methodology Report 6. Washington, DC:The Urban Institute.

Farrell, Mary, Michael Fishman, Stephanie Laud and Vincena Allen. 2000. “Understanding theAFDC/TANF Child-Only Caseload: Policies, Composition, and Characteristics in Three States.”Report prepared for the Assistant Secretary for Planning and Evaluation, U.S. Department ofHealth and Human Services. Falls Church, VA: The Lewin Group.

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Holtzblatt, Janet. 2004. “Trade-offs between Targeting and Simplicity: Lessons from the U.S. andBritish Experiences with Refundable Tax Credits.” Washington, DC: Office of Tax Analysis, U.S.Department of Treasury.

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About the Authors

Pamela Loprest is a principal research associate in the Income and Benefits PolicyCenter. Dr. Loprest’s research focuses on barriers and supports for work amonglow-income families and persons with disabilities. Her recent work examines welfarereform and work policies and families recently leaving welfare.

Sheila R. Zedlewski is director of the Urban Institute’s Income and Benefits PolicyCenter. Her research deals with welfare reform, low-income program participation,and poverty. Her recent articles deal with the link between welfare reform and foodstamp participation, and the works support system for low-income families.

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