When Welfare Ends

When Welfare Ends--October/November 1998 State Legislatures Magazine

By Jack Tweedie

How do we know how welfare reforms are working? The rolls are shrinking, but lawmakers want to know how the families are doing.

Where have all the welfare recipients gone?

After a state labor official bragged that almost 4,000 former welfare clients were working, New Mexico Representative Edward Sandoval had to ask, "But our caseloads have dropped by more than 14,000 families. What happened to the other 10,000 families?"

No one had an answer.

Almost every state faces similar questions as it oversees welfare reforms. Across the country, state efforts have contributed to a stunning drop in cases. Nationwide, caseloads dropped by 36 percent from January 1994 to March 1998. That means that more than 1.8 million families have left welfare. Many left just as work requirements and time limits were taking effect, raising questions about why. For all those leaving welfare, we don’t know how many former recipients are working, how many have moved in with their own parents, how many have married, how many have moved out-of-state or how many don’t have enough money to buy food or pay rent.

Reducing caseloads was one goal of welfare reform. Legislators emphasized ending dependence. But no one expected the numbers to drop so quickly. And legislators’ concerns do not end when a family leaves the rolls. Indeed, their vision of success focuses on what happens afterward. To judge how reform is working and how they can make it work better, legislators need to know what is happening to those families.

LEGISLATORS WANT TO KNOW MORE

"We’re trying something new," says Senator Jay Bradford of Arkansas. "It’s important to get recipients into jobs so they can support their families, but we don’t know exactly how to do that. We legislators need to keep track of what’s going on, what is working and what is not."

WHAT DO WE KNOW SO FAR?

Seven Keys to Good Follow-up Studies

Surveys and administrative data

Two basic approaches are used to determine what has happened to families who leave welfare--surveys of former recipients and matching lists of families who left welfare with administrative data such as unemployment insurance. Unemployment data provide reliable employment data at regular intervals. Surveys allow researchers to address more questions, such as whether families experience hardships or what barriers they face in keeping jobs, but they cost more.

Sampling

Looking at only a proportion of those who leave can be a good way to obtain information while limiting cost. There are two keys to good sampling. The sample size must be sufficient--200 to 400 for a simple analysis, up to 1,500 for an analysis that compares several regions in the state or different kinds of families.

Those who are analyzed should be selected at random. It is not valid to take the first families who respond.

Persistence

Substantial efforts should be made to get responses from every member of the sample. A good response rate--the percentage of people who complete the survey after efforts to contact them--is 70 percent to 80 percent. Mail surveys cannot obtain that level. A good survey is one that attempts to contact respondents by phone more than once (at different times in the day) and if that fails, sends someone to their last address to try to locate them. It is not valid to start with a large sample and then stop when you get a set number of responses. (People who get jobs are more likely to return surveys than those who are unemployed, so results would overstate the percentage with jobs.)

Independence

The analysis should be carried out by a fair and independent organization. In some cases, agency employees may be appropriate, but some external or legislative involvement should be included because of the stake of the agency and the governor’s office in positive findings. Several states have passed legislation mandating a valid study with sufficient appropriations and requiring a prompt report to the legislature.

Timing

Legislators need to know quickly how well reforms are working and what changes may be needed to improve the program. Many researchers are not used to providing information for policymaking, so it is important to set timelines that fit legislative schedules.

Studies over time

Moving welfare recipients into jobs and helping them become self-sufficient is not a one-time event. Good studies need to track former recipients and the well-being of families over a long period of time to see if they stay in jobs and advance in employment. Surveys or administrative data should be collected periodically for several years.

Investing in information

Good follow-up studies can require substantial investment. Careful design and thorough planning pays off with accurate information about how reforms are working. States can use federal block grant or state maintenance of effort dollars to fund studies.

States are now starting to track families who leave welfare, with more than 35 initiating studies. They give us our first look at how welfare reform is working. In Arkansas, Colorado and New York, legislators initiated studies. In other states, legislators have encouraged efforts by the state welfare agency or governor’s office. Some welfare departments are doing the studies themselves, while others have contracted with public health agencies, researchers in local universities or consulting firms.

Early attention has focused on the number of families working and those who suffer extreme hardship such as homelessness and abuse. Later assessments will examine job retention, advancement and whether families are moving out of poverty. States have taken a variety of approaches in these studies, including surveys, matching welfare records with administrative data such as unemployment insurance, and home visits to check on the well-being of the family. This is giving us a better idea of what happens when people leave welfare. Just because a family leaves welfare, doesn’t mean a parent got a job. We know that under the old AFDC/JOBS program half the adult recipients left welfare for work. And between one-fifth and one-third returned to welfare within the next two years. So what kind of results can be expected under the new welfare programs, especially since families are leaving welfare so much faster now than they did then?

It is difficult to answer that question directly, but a look at what is happening in other states provides an idea of where states rank and shows what is possible:

¨ How many former recipients get jobs?

Surveys found that 64 percent in Indiana, 65 percent in South Carolina and 68 percent in Washington had jobs. Matching their welfare records with unemployment insurance data, Maryland found that 55 percent of its former recipients had earnings.

Several states focused on families who were removed from welfare because they failed to comply with new requirements or did not complete an individual responsibility contract. These are the parents less likely to be working. In Iowa, 53 percent of these people had found jobs, in Tennessee, 39 percent and in New Jersey, 30 percent.

¨ How much do former recipients earn?

In Indiana, 41 percent of former recipients earned between $6 and $7 an hour. The average wage in South Carolina was about $6 an hour. Washington’s survey reported a remarkable median wage of $7.40 an hour. In Maryland, former recipients had jobs that paid an average of $2,384 over three months.

¨ What kinds of jobs do former recipients get?

No surprises here. In South Carolina, 73 percent of the jobs were in service or clerical and sales occupations. Kentucky had mostly service industry and retail jobs. Maryland reported the most jobs in the wholesale and retail trade, including "eating and drinking establishments."

¨ How do recipients support their families when they don’t get a job?

New Jersey’s survey of families who had been removed from the rolls included a question about how the respondent expected to support her family without welfare. They then asked how she actually supported her family. More than half (53 percent) planned to get a job, but only 30 percent reported being able to do so. The burden of supporting them fell on relatives. Only 23 percent planned to depend primarily on their own families, but 47 percent reported having to do so. And child support played a very small role. Only 3 percent of the families relied primarily on child support and 6 percent on boyfriends or girlfriends.

Checking on Children

Some states use follow-up studies to identify families who might be hurt because they lost cash assistance. Iowa, Arkansas, Tennessee and South Carolina try to contact all families who lose welfare because they did not comply with new requirements or for reasons other than getting a job. Senator Elaine Szymoniak co-sponsored Iowa’s innovative program that sends public health nurses to check on children in families who were removed from the rolls.

"When we started this, there was a lot of concern about what was going to happen to the families who lost benefits," she says. "We had to make sure that those children were OK." These home visits enable agencies to provide additional services to families when they are needed and to remove children from the home if it is necessary.

¨ Do families experience hardships after losing cash assistance?

South Carolina’s survey asked families who had left welfare if they had suffered hardships while on welfare and then after they left. Asked if they had ever "had no way to buy food," 14 percent answered yes for the time after they left welfare compared to 6 percent while they were on welfare. Asked if they had "gotten behind in rent or other payment for housing," 18 percent said yes after losing welfare and 12 percent while on welfare. Questions about not being able to pay for child care showed little difference between when they received welfare and afterwards. Home visit programs have found a few families in trouble. Of 971 families contacted in Arkansas, nine were classified as needing immediate services or help with food or rent. Home visits in Iowa and Tennessee also found a few families where children were at risk of neglect or abuse.

¨ How many families come back to welfare?

Maryland reports that 19 percent of those who left welfare had come back within three months. In Michigan, 24 percent of the families who left or were kicked off the rolls returned in three months. And in New Jersey, 38 percent of the sanctioned families applied to be reinstated.

POLICIES FROM INFORMATION

Tracking studies allow policymakers to adjust welfare reforms. South Carolina asked former recipients who were still unemployed about the barriers they face in finding jobs. Difficulties with child care and transportation topped the list, so the agency expanded these services and strengthened efforts to inform former recipients about them. Several state surveys found that most recipients get jobs near the minimum wage and that keeping jobs is still a critical concern. In response, those states are developing additional job training, mentoring and education for recipients already in jobs so they can stay employed and improve their wages.

MORE QUESTIONS

Even with the valuable information from these studies, critical questions remain.

What About Families Diverted From Welfare?

Several states have developed diversion programs designed to help applicants without enrolling them in welfare. Caseworkers offer help with finding jobs, child care or car repairs so applicants can get or keep jobs. These programs have resulted in substantial declines in the proportion of applicants who complete the process and become eligible for assistance. Yet we know little about how these families fare after leaving the welfare office. Few states track families diverted from welfare and no state has released any data on these families. Diversion policies are a key component of many states' reforms and more information is needed about how they work.

First, what about the families that can not be located? Have they moved out of state? Are they staying with relatives? Are they homeless and therefore harder to find?

Second, what about the families where the parents are not working? How are they supporting themselves without a job? Are these other forms of support stable or will these families come back on welfare?

Third, for those recipients with jobs, will they be able to stay employed? How will they cope when transitional child care and Medicaid end? Will they be able to improve their wages and move their families out of poverty?

These questions illustrate how welfare reform presents an ongoing challenge to policymakers. Continuing efforts to find out how families fare off welfare and then using that knowledge to help them overcome remaining difficulties are essential to state efforts to realize the promise of welfare reform.

HELP FOR STATES

Legislators and staff may be interested in the report "Tracking Welfare Reform: Designing Follow-up Studies of Families Who Leave Welfare," written by staff from NCSL, the National Governors' Association and the American Public Welfare Association. It is a summary of a conference organized last winter by the three groups and sponsored by the Office of the Assistant Secretary for Planning and Evaluation, U.S. Department of Health and Human Services.

For more information call Jack Tweedie at (303) 830-2200

Welfare Reform Children and Families Program Human Services and Welfare