FINAL REPORT—COMMENT VERSION

FINAL REPORT


TANF Caseload Composition and Leavers Synthesis Report
Contract Number 233-02-0092
Task Order Number HHSP23300013T




March 28, 2007

SUBMITTED TO: Seth Chamberlain
Leonard Sternbach (c/o Seth Chamberlain)
U.S. Department of Health and Human Services
Administration for Children and Families
Office of Planning, Research, and Evaluation
370 L’Enfant Promenade, S.W.
Washington, D.C. 20447



REPORT PREPARED BY: Gregory Acs and Pamela Loprest
The Urban Institute
2100 M Street, N.W.
Washington, D.C. 20037
Acknowledgments

The authors would like to thank Daniel Murphy, Mary Murphy, Sandi Nelson,
Theresa Plummer, Justin Resnick, and Gretchen Rowe for their assistance in producing
this report. We would also like to thank Richard Bavier, Peter Germanis, Naomi
Goldstein, Susan Hauan, Donald Oellerich, and Howard Rolston for their thoughtful
comments on earlier drafts. And we would especially like to thank our project officers,
Seth Chamberlain and Leonard Sternbach, for their insightful comments and probing
questions that helped shape this report.




TABLE OF CONTENTS



Executive Summary ........................................................................................................................................ ii

I. Introduction............................................................................................................................................. 1

Organization of the Report ..................................................................................................................... 3

II. Methodological Issues and Limitations in Studies............................................................................. 5

Approaches to Studying Welfare............................................................................................................ 5

Data Sources for Studying Welfare ........................................................................................................ 8

Advantages and Disadvantages of Different Data Sources................................................................... 11

Issues in Assessing Research on Welfare Recipients and Leavers under TANF.................................. 16

III. Understanding Changes in the Circumstances of TANF Recipients and Leavers........................ 21

Data Issues for Analysis of Three Data Sets......................................................................................... 23

Question 1: In what ways have the characteristics of families receiving cash assistance changed
over time, and what do we know about the relationship of these changes to caseload decline? .......... 39

Question 2: Does the caseload of TANF recipients include greater percentages of families with
serious barriers to work over time?....................................................................................................... 55

Question 3: What do we know about the economic progress of TANF recipients and leavers
over time? ............................................................................................................................................. 71

Question 4: What do we know about those leaving welfare without work or advantageous
changes in family structure? ................................................................................................................. 92

Summary of Findings............................................................................................................................ 98

IV. Recommendations for Future Research .........................................................................................105

Data Needs and Capacity Building..................................................................................................... 105

Understanding Changes in Participation..... 109

Tracking Recipients to Identify Needs ............................................................................................... 112

Understanding How State Policy Choices Influence Recipients ........................................................ 115

Research beyond TANF...................................................................................................................... 118


Appendix A: Experts Consulted to Identify Research and Data Needs…. ..............................................A1

Appendix B: Supplemental Data Tabulations ...........................................................................................B1

i TANF Caseload Composition and Leavers Synthesis Report

Executive Summary

The dramatic decline in welfare caseloads in the 1990s suggested that welfare
reform was achieving one of its major goals: reducing dependency. It also raised
questions among policymakers, program administrators, advocates, and the public as to
whether the characteristics of the caseload were changing, whether families that left
welfare were better off than when they were on welfare, and whether former recipients
were making progress in the labor market.

The purpose of this report is to summarize what we know about these issues for
1current TANF recipients and former recipients (“leavers”) from existing literature and to
update our knowledge with new analysis using more recent data. The key questions
addressed in the report are:

• How do the characteristics of the Temporary Assistance for Needy Families
(TANF) caseload compare with the Aid to Families with Dependent Children
2(AFDC)/TANF caseload characteristics 5 and 10 years ago? In particular, is
the caseload more or less disadvantaged than in the past, especially with
respect to their employability?

• What are the characteristics and outcomes for families that recently left the
TANF rolls compared with families on TANF, and compared with families
that left the TANF rolls 5 and 10 years ago? Have TANF leavers become
more or less disadvantaged? Are families better off after leaving TANF than
when they were on the welfare rolls?

Methodological Issues

Although welfare reform spawned a considerable amount of research, few studies
actually use national data to assess the status of current and former welfare recipients.
Rather, many of the most informative studies focus on a single or limited number of
geographic areas (e.g., the Three City Study (Boston, Chicago, & San Antonio), the
Women’s Employment Study (a single urban county in Michigan), and a wealth of state-
and county-specific welfare leaver and welfare caseload studies). In addition, few studies
examine changes over time, generally only focusing on the early years of the reform
period. Even when considering high quality studies (i.e., those based on reliable survey
instruments and carefully matched administrative data that provide detailed descriptions
of the methodologies used and information on the precision of statistical estimates),
differences across data sets, populations considered, the definitions of who is a welfare

1 We use the terms “leavers”and “former recipients” interchangeably in this report.
2 The AFDC program, which was established in 1935 and originally called Aid to Dependent Children
(ADC), was the major entitlement program providing cash aid to able-bodied low-income families with
children. PRWORA ended the AFDC entitlement, replacing with TANF block grants to the states for the
purpose of providing temporary assistance to needy families. For a detailed account of how PRWORA
changed U.S. welfare policy, see Haskins (2006).
iirecipient and a welfare leaver, and the way data are reported make it difficult to look
across studies and discern trends over time.

Consequently, to address questions about the status of current and former welfare
recipients over the past decade, we draw from the available research that uses national-
level data sets focusing on the TANF era (post-1996) and supplement this research with
original tabulations from three national-level data sets: the Current Population Survey
(CPS), the National Survey of America’s Families (NSAF), and the Survey of Income
and Program Participation (SIPP). For TANF recipients, we analyze the early years of
reform by comparing 1997 to 1999 using the NSAF and 1996 to 2001 using the SIPP. For
the later years of reform we compare 1999 to 2002 using the NSAF, 1999 to 2003 using
the SIPP, and 2000 to 2005 using the CPS. Our analysis of leavers analyzes the broader
time period: 1997 to 2002 using theNSAF, 1996 to 2001 using the SIPP, and 2000 to
2005 using the CPS.

We attempt to use sample definitions, variable measures, and time periods that are
as similar as possible across the three data sets. However, there are some differences in
our sample definitions (unit of analysis, definition of welfare recipient and leaver) due to
the idiosyncratic way information is collected by each data source, and in the calendar
year