|
Article Excerpt
In July 1997, the Personal Responsibility and Work Opportunity Reconciliation Act (Public Law 104-193) replaced the 61-year-old Aid to Families with Dependent Children (AFDC) program with Temporary Assistance for Needy Families (TANF). Major provisions of this law include block grant funding; an expansion of funding for childcare; reducing spending on behalf of needy children; allowing states to operate programs of their own design; requiring minimum work participation rates; imposing time limits on receiving benefits without working; and placing lifetime limits (60 months) on receiving benefits (Committee on Ways and Means, 2000: 352). In addition to the Federal 60 month lifetime limit, states may establish shorter limits on receiving benefits (Committee on Ways and Means, 2000: 358).
Since roughly 1994, the nation's Aid to Families with Dependent Children (AFDC) program and now Temporary Assistance for Needy Families (TANF) program caseloads have experienced unprecedented reductions. One explanation for the reduction is that the nation's thirty-year low unemployment rate has attracted people to the labor market who have been long-term welfare recipients. Another explanation concerns recent federal and state legislative initiatives that place time limits on how long families can receive benefits, enhanced work expectations, and better transitional benefits.
With all the recent legislative changes in AFDC and now TANF, one characteristic of the two programs has remained constant over time: differences in maximum benefits by state. For example, in January 2000, of the contiguous 48 states, a family of three in Alabama could receive a maximum of $164 in TANF benefits per month and a similar family living in Vermont could receive up to $708. In January 2000, the median maximum benefit was $421 per month (Committee on Ways and Means, 2000: 383-384).
This article reports the findings of a study that examines how states' maximum AFDC and TANF benefits affect both how families become eligible and ineligible for benefits and compares the length of time families receive benefits in two counties within a relatively high benefit state, Wisconsin, and the entire state of Texas, which has relatively low benefits.
Prior to passage of the Personal Responsibility and Work Opportunity Reconciliation Act, nearly half the nation's states were granted wavers to test different reform ideas, many of which included time limits on receiving benefits. Wisconsin received such a waiver in 1993 and Texas received a similar waiver in 1995, neither of which affected the data used in this study. Despite federal time limits on benefit receipt, an important policy question remains concerning the impact differences in benefit amounts have on the length of time families receive TANF benefits.
PRIOR STUDIES ON WELFARE RECEIPT
Many studies have been conducted on factors that influence the length of time families receive AFDC benefits. Most of these have focused on how personal characteristics of recipients (e.g. mother's age, race, education, marital status, earnings) or their families (e.g. number of children, and age of the youngest child) influence welfare receipt (Bane and Ellwood, 1983; Boskin and Nold, 1975; Ellwood, 1986; O'Neill, Bassie, and Wolf, 1987; Plotnick, 1983; Rank, 1985; Rank, 1986; Ruggles, 1988; Barton and Pillai, 1993). Other studies examining welfare receipt have examined exogenous variables such as urban or rural residence (Rank and Hershil, 1988); AFDC-Basis and AFDC-UP (Barton and Pillai, 1994); participation in a JOBS program (Barton and Pillai, 1993; Gueron and Pauly, 1991); and support services through intensive case management (Sansone, 1998)
Within recent years, a number of studies have examined the impact benefits have on a wide range of behaviors such as births (Fairlie, 1997); illegitimate or out-of-wedlock births (Winegarden and Bracy, 1997; Tschoepe, 1999; Ozawa, 1989); abortions (Medoff, 1998); labor supply (Hoynes, 1996); living independently or in a subfamily (Hutchens, Jakugson, and Schwartz, 1989); homicide rates (Hannon, 1997); employment and school attendance (Rich, 1999); adolescent sexual activity and contraceptive use (Moore, Morrison, and Glei, 1995); and family poverty status (Caputo, 1993).
Several studies have examined the impact wages and incomes have on the length of time families receive AFDC benefits. As expected, all of these studies have found a positive relationship between increases in wages or income and the likelihood of families leaving welfare (Blank, 1986; Boskin and Nold, 1975; Hoffman, 1988; Bane and Ellwood, 1983). Bane and Ellwood (1983) expand on this research and estimate that about one third of all families that leave welfare do so because of increases in their income. Ruggles (1988), in a proxy for earnings or income, finds that recent employment makes people more likely to exit welfare.
Very few studies have examined the impact differences in maximum AFDC benefits by states have on the length of time families receive benefits. Blank (1986) examined this issue by comparing families that were members of the Seattle / Denver Income Maintenance (SIME / DIME) control groups during the early 1970s. Monthly data were available from 1970 through 1975 for Seattle families and from 1971 through 1976 for Denver families. During that time, the...
|
