A Rose by Any Other Name? Lump-Sum Diversion or Traditional Welfare Grant?

Summary

Critics of diversion grants, lump-sum payments designed to alleviate short-term emergencies and prevent the need for ongoing Temporary Assistance to Needy Families (TANF) receipt, claim that recipients use monetary amounts similar to traditional welfare recipients. This paper examines the total cash grants for two cohorts of TANF applicants: those whose applications resulted in a TANF grant and those who received a diversion grant. Multivariate regression models show that diversion leads to a reduction of $1,841.44 in cash benefit receipt during the three-year tracking period (p < 0.001). Findings suggest that diversion payments are not TANF under another name.     

The impact of state TANF policy decisions on kinship care providers

Based on a survey of public assistance and child welfare agency staff, this article examines how state Temporary Assistance for Needy Families (TANF) policy decisions have affected kinship care providers. Findings indicate that most states have continued using TANF to provide income support to kinship caregivers, and some have used TANF to find related support services. These payments, however, are much lower than rates for licensed providers, and many kinship caregivers are subject to work, training requirements, and time limits.     

Does income support increase abortions?

Currently, Temporary Assistance for Needy Families (TANF) programs in 32 American states allow low-income childless pregnant single women (CPSW) to receive monthly cash assistance, while 28 states and the District of Columbia use lump-sum payments to divert low-income families from TANF. Past research has not investigated the possible consequences on abortions of these two welfare policies. We construct a theoretical model of low-income CPSW to investigate them. The results of the theory yields the following hypotheses: (1) diversion payments to low-income mothers lower abortion incidence; and (2) diversion payments and CPSW eligibility together raise abortion incidence. We use data from the US Centers for Disease Control and Prevention’s Abortion Surveillance, and a system GMM dynamic panel, two-way fixed-effects empirical model to test our hypotheses. Our empirical results provide statistically significant evidence for the first hypothesis, but not the second.     

Racial disparity in risk factors for substantiation of child maltreatment

This study examined racial disparity in impacts that welfare use, substance abuse, depression, and intimate partner violence (IPV) make on substantiation of reported child maltreatment. A sample of 1493 African Americans, 848 Hispanics, and 2144 Whites was employed, extracted from the National Survey of Child and Adolescent Well-Being. Logistic regression results indicated that each ethnic subsample had a distinct set of significant risk factors for substantiation. For the African American subsample, relatively long periods spent receiving Temporary Assistance for Needy Families (TANF) reduced likelihood of substantiation, as did caregivers' alcohol dependence. For the Hispanic subsample, TANF receipt lowered substantiation's likelihood, while caregivers' drug use raised its likelihood. For the White subsample, caregivers' TANF receipt and substance abuse showed no significant impact. No subsample's substantiation likelihood appeared significantly affected by depression or IPV. Implications for services are suggested.     

Effects of child support pass-through and disregard policies on in-kind child support

This paper examines whether states’ elimination of child support disregards for welfare payments after welfare reform caused non-custodial parents to increase in-kind support. I use longitudinal data from the Survey of Program Dynamics and take advantage of state and year variation in child support disregard policies before and after the 1996 welfare reform to identify effects of the disregard on in-kind support. I find that a $100 decrease in the disregard corresponds to a 3.2 percentage point increase in the probability a child will receive in-kind child support.     

State TANF Time Limit and Work Sanction Stringencies and Long-Term Trajectories of Welfare Use,Labor Supply,and Income

While the 1996 welfare reform increased employment and reduced the participation of the Temporary Assistance for Needy Families (TANF) program immediately after its inception, little is known about the extent to which the reform and stringencies of time limit and work sanction policy features have impacted individuals in the long term. This study used the Survey of Income and Program Participation 1996, 2001, and 2004 panels (1996–2007) and a difference-in-difference-in-difference design to follow low-skilled single mothers’ trajectories of welfare use, labor supply, and income for 10 years after the welfare reform and compare how these trajectories differ by stringencies of state work sanction and time limit policies. The findings indicate that welfare reform had sustained impacts on reducing welfare use (TANF and the Supplemental Nutrition Assistance Program [SNAP] program) and increasing employment. Stringent work sanction and time limit policies were associated with lower TANF participation rates in the long term, but only short time limit policies were associated with reduced SNAP participation. Neither stringent policy feature increased employment nor income. The differential effects by race were also examined and discussed.

     

Immigrants’ TANF Eligibility, 1996–2003: What Explains the New Across‐State Inequalities?1

Why did some states adopt stringent TANF‐eligibility policies toward immigrants, while others implemented more lenient rules throughout the post‐1996 welfare reform period? We use immigrant‐specific welfare rule measures to examine predominant theoretical frameworks for understanding state stringency in welfare policy. Analysis, utilizing a simultaneous equations modeling (SEM) strategy, uses annual data for all states. Results show consistent support for the median voter (primarily, the percent of liberal voters) theoretical explanation for less stringent state welfare eligibility rules regarding immigrants. While the size of the Social‐Security‐recipient population (tax capacity indicator) and perhaps unacceptable reproductive behavior (teen birth rate) relate to more stringent rules, key state economic and fiscal characteristics (i.e., per capita welfare expenditures, per capita personal income) explain less stringent TANF eligibility rules. Importantly, recent immigrant population concentration patterns (in new and traditional destination states) add to the theoretical explanation of less stringent state TANF immigrant eligibility policies.     

How do economic downturns affect welfare leavers? A comparison of two cohorts

Early welfare reform research showed high rates of employment for TANF leavers. However, work-focused welfare may not be effective during an economic downturn. We investigate the employment of Wisconsin TANF leavers, contrasting outcomes among early leavers (1998) with those who left during the 2001 recession. We use data from administrative records on about 6000 welfare leavers, tracking quarterly employment for 3 years after they left benefits. Separate panel data analyses of those exiting in two different time periods show that individual leavers are less likely to be employed when their local unemployment rate is high in the later cohort; no relationship is found for the early cohort. In a panel analysis in which the cohorts are combined, we find that leavers in the later cohort, who experienced the recession early in their post-welfare career, are less likely to be employed, a result that holds controlling for observed and unobserved characteristics. These findings raise questions about how well single-parent families and their children will fare during difficult economic times now that welfare reform has such a strong emphasis on work.     

Welfare-to-Work Programs and the Dynamics of TANF Use

This study examines the effects of participation in Welfare-to-Work programs on the dynamics of TANF recipients’ welfare use. Using the Survey of Program Dynamics and the Welfare Rules Database, the study analyzes how participation in Human Capital Development and Labor Force Attachment programs affects the probabilities of TANF exit and re-entry, while holding the effects of the state economy and various TANF rules constant. The analyses reveal that LFA programs are not associated with a higher probability of TANF exit than HCD programs. Instead, TANF recipients’ employment status and the local labor market conditions are more important predictors of TANF exit. It also reveals that, for TANF leavers, severe poverty and economic insecurity are significantly related to their welfare recidivism.     

The Social and Economic Impact of Sanctions and Time Limits on Recipients of Temporary Assistance to Needy Families

A central feature of the reforms enacted through the Personal Responsibility and Work Opportunity Reconciliation Act (welfare reform) has been the adoption of strategies to involuntarily remove Temporary Assistance to Needy Families (TANF) recipients from the welfare rolls, including increased use of sanctions and time limits on welfare receipt. Drawing on data from a three year panel study of women who had been receiving welfare in a state which adopted stringent sanctioning and time limit policies, we investigate predictors of recipients' TANF status after implementation of welfare reform, and identify differences in post-reform material resources, hardships and quality of life based on TANF status. Almost half of all welfare case closures during the first time period after reforms were implemented through involuntary strategies. Relatively few baseline characteristics predicted different outcomes once welfare time limits and sanctions were implemented. Those who were timed off welfare had substantially lower incomes in the year following their removal. One third of all respondents, regardless of reason for leaving TANF reported having insufficient food, housing problems and lack of access to needed medical care.     

Ineligible to Save? Asset Limits and the Saving Behavior of Welfare Recipients

ABSTRACT

This article explores how asset limits used to determine eligibility for the Temporary Assistance for Needy Families (TANF) program influence the saving behavior of program participants. The qualitative evidence presented in this study serves to explain how asset limit policy may contribute to the low rate of savings and bank account ownership among the welfare population. From these conversations, it is clear that the existence of asset limits—or, just as importantly, the perception that these limits exist—negatively impacts the saving behavior of TANF recipients.     

The welfare/self-sufficiency gap among single mothers through theoretical lenses

ABSTRACT

Poverty has been a recurring issue in America since time immemorial and become the target of a panoply of corrective measures from the federal government. One of these measures is, of course, the Temporary Assistance to Needy Families (TANF), the key welfare policy under the Personal Responsibility and Work Opportunity Reconciliation Act of 1996. Since its inception, TANF has constantly been the subject of vehement controversies among politicians, lawmakers, community advocates, social researchers, and government officials. Indeed, there has been a growing concern about the effectiveness of the program in galvanizing economically disadvantaged families toward economic self-sufficiency. This paper presents a historical overview of the political context that led to the passage of the TANF policy, identifies barriers associated with TANF implementation, explains the concept of self-sufficiency, and critically analyzes the gap between welfare receipt and economic self-sufficiency through the lenses of four theoretical benchmarks: policy design and social construction, culture of poverty, racial classification, and social control. Implications for research are discussed.     

Child Care “Packaging” Among TANF Recipients: Implications for Social Work

This article reports the results of a study that examined the ways in which current and recent TANF recipients assembled or “packaged” their child care arrangements among formal and informal providers. The findings are drawn from in-person, in-depth interviews with current and former welfare recipients. The study found that most of the respondents used multiple providers within the category of informal child care for reasons including availability, the use of a network of social acquaintances as a problem-solving resource, the need to accommodate irregular work hours, and personal trauma that contributed to a distrust of strangers in formal settings. The findings can affect the efficacy of practice with TANF recipients by contributing to social workers’ understanding of the context of decision-making regarding child care.     

PARENTAL SUBSTANCE USE AND FOSTER CARE: EVIDENCE FROM TWO METHAMPHETAMINE SUPPLY SHOCKS

Foster care caseloads have nearly doubled over the last three decades. Parental methamphetamine (meth) use grew significantly during the same period. While child welfare workers and law enforcement claim that parental meth use contributes to foster care growth, the evidence for a causal effect has not been determined. This paper presents the first evidence of a causal effect of meth on foster care admissions using two exogenous supply‐side interventions in meth markets from the late 1990s for identification. First, we find that restrictions on meth precursor distribution caused meth use (proxied by white meth self‐referred treatment cases) to decline 4.1%. Second, using two‐stage least squares, we estimate a positive elasticity of foster care cases with respect to meth use of 1.54. We also estimate elasticities of 1.03 and 1.49 for cases of child neglect and parental abuse, respectively. These results suggest that child welfare policies should be designed specifically for the children of meth‐using parents. (JEL I12, J13, K42)     

Young children's internalizing and externalizing behaviors after mothers exit welfare: Comparisons with children of non-welfare mothers

Although not part of its stated aims, current welfare legislation is assumed to benefit children through increased parental employment and self-sufficiency. Research findings on the extent to which parental welfare participation improves child well-being are inconclusive. This study investigates the behavioral outcomes of young children whose mothers have received TANF using data from the Fragile Families and Child Wellbeing Study (N = 2169). Controlling for maternal demographic characteristics, current financial status, and health risks, we found that the difference between children's externalizing behaviors in families of former TANF recipients relative to children of mothers who had never been on welfare decreased the longer mothers had been off welfare. However, overall, externalizing behaviors were significantly higher among children of former TANF recipients relative to children whose mothers had never received welfare. The findings suggest that ensuring healthy development for children requires long-term supports to help mothers as they transition off welfare.     

THE EFFECTS OF SINGLE MOTHERS' WELFARE USE AND EMPLOYMENT DECISIONS ON CHILDREN'S COGNITIVE DEVELOPMENT

We examine the effects of single mothers' welfare use and employment decisions on children's short‐run cognitive development, as measured by their preschool standardized math test scores. We control for three mechanisms through which these decisions might affect children's outcomes: direct monetary benefits, parental time invested in the child, and nonpecuniary benefits from in‐kind transfer programs such as Medicaid. We employ a correction function approach and control for state‐fixed effects to address the endogenous nature of welfare participation and employment decisions. Our estimates suggest that although each additional quarter of either mother's employment or welfare use results in only a small increase in a child's standardized math test score, the total effects after several quarters are sizable. We allow mothers' decisions to have varying effects on attainment by children's observed innate ability and by the intensity of welfare use and employment. A child who has the mean level of observed innate ability with a mother who simultaneously worked and used welfare in all 20 quarters after childbirth experiences an 8.25 standardized‐point increase in standardized scores. The positive impact is more pronounced for the more disadvantaged children, who tend to be born to mothers with low Armed Forces Qualification Test scores, or have lower birth weights. We also examine the effects using timing of employment and welfare use, as well as children's maturity and gender. (JEL I3, J13, J22)     

Views from the Frontline

Abstract

Through in-depth interviews, Kentucky welfare case managers compare their experiences working under Temporary Assistance to Needy Families (TANF) with their experiences working under Aid to Families with Dependent Children (AFDC). Interviewees unanimously agreed that TANF is more ambiguous, complex, and stressful than AFDC, both for clients and managers. Although case managers embrace the self-sufficiency goals of TANF, the strict work requirements, overwhelming paperwork and limited education and training opportunities create conflicting goals and barriers that frustrate case managers, leading to suggestions of a return to some rules of AFDC while retaining the TANF goal of independence from the welfare system.     

THE TIMING OF EXEMPTIONS FROM WELFARE WORK REQUIREMENTS AND ITS EFFECTS ON MOTHERS' WORK AND WELFARE RECEIPT AROUND CHILDBIRTH

I quantify the effects of welfare work exemptions on women's labor force participation and welfare receipt. This study, which also examines the age of youngest child (AYC) exemption, is the first to investigate the pregnancy exemption. Between‐state and within‐state variations in exemption length allow me to estimate the heterogeneous effects of each exemption by its timing and strictness. I find that the effects on labor force participation are driven by employment for the pregnancy exemption, inducing relatively stable welfare receipts. In contrast, the effects are driven by unemployment for the AYC exemption, which triggers more reliance on welfare after birth. (JEL I38)     

State Welfare Rules,TANF Exits,and Geographic Context: Does Place Matter?*

Abstract This research compares the likelihood of exiting TANF with and without employment and the effects of important state TANF rules on welfare exits in more disadvantaged (large Rustbelt cities and poor southern nonmetro) and less disadvantaged (other metro and other nonmetro) areas during the 1996–2003 post‐welfare reform period. Hierarchical competing risk models using individual‐level data from the 1996–99 and 2001–03 Panels of the Survey of Income and Program Participation merged with state‐level data from various sources show that female TANF participants in poor southern nonmetro areas are the least likely to exit TANF with work, and participants in large Rustbelt cities are less likely to exit TANF with work than those in other metro areas. Non‐work TANF exits are more likely to occur in other nonmetro areas than in other metro areas. Importantly, the effects of state welfare rules on TANF exits differ across places of residence. For example, stringent time limit policies promote work exits in large Rustbelt cities but promote non‐work exits in poor southern nonmetro areas. More lenient earned income disregards are significantly related to remaining on TANF in poor southern nonmetro areas but promote work exits in all other places. Findings from this paper imply that states should not take a “one‐size‐fits‐all approach” to reduce welfare caseloads.     

TANF’s 15th Anniversary and the Great Recession: are Low‐Income Mothers Celebrating Upward Economic Mobility?

This article examines the impact of welfare reform for the upward economic mobility of low‐income families at the fifteenth anniversary of the Temporary Assistance for Needy Families (TANF) program. The reformed policy was based on assumptions about participating families’ morality and encouraged states to move families off welfare through work and marriage without considering whether they were still poor. TANF was also implemented during an economic boom. Today, the US economy is suffering from the effects of the Great Recession, with many fearing a double dip recession. Poverty rates rose during the last 3 years and are currently above 15 percent. For the first time since 1996, the welfare rolls are increasing in many states. Welfare reform’s ‘work first’ approach did not create lasting upward economic mobility for low‐income families. As an alternative, I explore how higher education for welfare mothers will create opportunities for lasting upward mobility, even in times of recession.