Better Off Welfare
Table of Contents
Who Has Been Left Behind?
"Have the hardest to employ been left behind?"
An important issue in the welfare reform debate is whether or not the easiest-to-employ women have left welfare, leaving behind those with lesser educations, fewer skills or other problems. Some have claimed to know intuitively that the remaining caseload included those who are hardest to employ.4 However, both national surveys and state data show that the women most at risk for long-term welfare receipt have left the welfare rolls at rates as fast as or faster than women who are much less at risk.
Thus the substantially higher spending in the welfare reauthorization bill passed by the Senate Finance Committee5 for transitional work, job training, day care, family support, education and housing to help those on welfare achieve independence is hard to justify. The Senate bill would in effect repeal the reforms.6 Under the current law, states may exempt up to 20 percent of their caseloads from the five-year federal time limit. The Senate bill would further weaken this lifetime limit by allowing the states to give welfare recipients "supplemental housing benefits" indefinitely. It would partially restore the entitlement to welfare by replacing the level payments to states under the reform law with increased funding when state caseloads or unemployment rise. And, most damagingly, it would effectively allow states to exempt 85 percent to 90 percent of adult recipients from work requirements. These measures would slow the transition of welfare recipients to work by significantly reducing incentives to leave welfare.
At-risk Single Mothers: The O'Neill-Hill Study. It is well established that the single mothers most at risk for lengthy welfare receipt and long-term welfare dependency are those who never married, are poorly educated, are young (18 to 29 years old), have young children (under age 7) and are black or Hispanic.7
"The decline in welfare participation has been greatest for the most disadvantaged single mothers."
Former Congressional Budget Office (CBO) Director June E. O'Neill and a colleague, M. Anne Hill, analyzed welfare use by different demographic groups over time, using data from the Current Population Survey (CPS) conducted in March of each year by the Census Bureau. They found that during the 1990s, and particularly since 1996, the decline in welfare participation was largest for groups of single mothers commonly thought to be the most disadvantaged. For instance, from 1993 to 1999,8 the percentage of disadvantaged single mothers who received welfare any time during the year fell dramatically - and by more than the fall in welfare receipt by less at-risk single mothers:
- Welfare participation declined for single mothers of all ages, but the decline was greatest for the youngest mothers, falling by 26 percentage points for 18- to 24-year-olds and 16 percentage points for 25- to 29-year-olds, with most of the change occurring since the 1996 reforms
- Welfare participation declined for single mothers with children of any age, but declined the most for mothers with children under age 7, falling by 22 percentage points.
Welfare participation declined for single mothers regardless of their level of education but declined the most for mothers who had not completed high school, falling by 24 percentage points.
- Welfare participation declined for single mothers of every race and ethnicity but declined more for black and Hispanic women than for white women, falling by 24, 21 and 16 percentage points, respectively.
- Finally, welfare participation declined for single mothers regardless of their previous marital status, but it declined more for never-married mothers (27 percentage points) than for previously married mothers (15 percentage points).
"The steepest decline in welfare participation was among low-income black families."
At-risk Minorities: The Urban Institute Study. The Urban Institute's 2002 National Survey of America's Families looked at changes in welfare receipt by race and ethnicity from another perspective. Welfare enrollment for both blacks and Hispanics fell proportionately more than for whites over the 1996 to 2000 period, and the decline was steepest among blacks.9 As Figure I shows:
- The proportion of low-income white families who had received welfare benefits in the last year fell from 17 percent in 1996 to 10 percent in 2000.
- The proportion of low-income Hispanic families fell over the period from 25 percent to 14 percent - closely tracking the decline for all low-income families from 24 percent to 14 percent.
- And the decline for low-income black families was from 37 percent in 1996 to 22 percent in 2000.
Thus welfare receipt by low-income families in the major the ethnic groups fell by more than 40 percent.
Furthermore, the Urban Institute data showed a welfare caseload not increasingly made up of the women suffering the most hardships. For example, those who were still on welfare did not appear to have greater health problems than those who had left the rolls.10
"In Texas disadvantaged single women left the welfare rolls at rates similar to less disadvantaged women."
Other Measures of Disadvantage: Evidence from Texas. Data from the states show that those who have left the welfare rolls are similar to those who have remained. For example, a comparison of Texas enrollees who left in 1997 and 1998 and those who remained up to 2002 shows that disadvantaged single mothers have left the state's welfare rolls at rates similar to those of other women who have left the rolls.11
Hispanic and black women - who made up a larger proportion of the Texas welfare caseload than whites - left the rolls at higher rates than did white women, and as a result the percent of the remaining welfare caseload comprising minorities is smaller, while the percent of whites is larger.
The proportion of the Texas welfare caseload made up of women with less than eight years of education fell from 1998 to 2002, as did the proportion who were high school graduates and above, while the proportion who were high school dropouts increased only slightly.
Thus the Texas welfare caseload does not show an increasing concentration of women with multiple disadvantages or hardships.
Other Measures of Disadvantage: The Johns Hopkins Study. For other disadvantages, researchers using different data sets have come to complementary conclusions. For example, a Johns Hopkins University study of Boston, Chicago and San Antonio found that women under age 25 left the rolls at a faster rate than older women over the 1997 to 1999 period. (Younger women comprised 35 percent of those who left and 30 percent of those who stayed.)12 The study also found that in terms of education levels, depression and domestic violence, women who remained on the rolls did not differ greatly from those who left.
Long-term Welfare Recipients: National Data. Under the old AFDC program, nearly half of welfare recipients at any point in time had been on the rolls for five or more years. Yet most families who received cash welfare benefits did so for only a few months. About half of those who went on welfare left within a year, 70 percent within two years and almost 90 percent within five years.13 However, the longer families remained on the welfare rolls, the more likely they were to stay there for additional years. As a result, long-term welfare recipients accounted for more than half the welfare rolls. Since reform, U.S. Department of Health and Human Services data show how far the proportion of long-term welfare recipients has fallen. [See Figure II.]
- Under the old AFDC system, about 70 percent of recipients at any point in time had received AFDC for more than two years;14 by 1999, only 47 percent of welfare recipients nationwide had received benefits continuously for two or more years.15
- Under the old AFDC system, 48 percent of the caseload at any point in time had received assistance for more than five years;16 by 1997, only 25 percent had received benefits continuously for five years or more.17
Under AFDC, about one-third of women who ever used welfare would spend longer than five years on the rolls over the course of their lifetimes and 60 percent would receive welfare for at least 24 months. Since the 1996 reforms set a five-year limit on welfare receipt, such long-term receipt will fall over time.
Long-term Welfare Recipients: Evidence from Baltimore. A study of Baltimore, Maryland, welfare recipients found that the long-term welfare dependency of women ages 19 to 24 fell abruptly after welfare reform. In the 1992 to 1996 period, 46 percent of young women were longer-term recipients, while in the 1996 to 2000 period only 15 percent of them were long-termers.18 The same study found that the labor market skills or earning potential of women on welfare have increased since reform, indicating that the caseload is not increasingly made up of women with less marketable skills.
"Long-term welfare recipients were more than half the caseload under the old program...since reform they are less than half."
Long-term Welfare Recipients: Evidence from Wisconsin. What proportion of long-term welfare recipients can be moved from welfare to work? We do not know, but in Wisconsin - which reduced its welfare rolls by more than 70 percent - only 2 percent of women who had been on the welfare rolls in 1990 were either still receiving welfare or had returned to the rolls after some work experience by 1998.19