Endnotes
This study uses data from the National Evaluation of the Welfare-to-Work (WtW) Grants Program Evaluation, which Mathematica Policy Research (MPR) is conducting under contract with the Office of the Assistant Secretary for Planning and Evaluation (ASPE), at DHHS, to examine the extent of potential monetary UI eligibility among people who leave welfare for work. Congress established the WtW grants program in 1997 to support TANF programs in high-poverty communities in their efforts to assist the most disadvantaged welfare recipients make the transition from welfare to work. Congress also mandated that the WtW grant programs be evaluated. As part of that evaluation, MPR collected data on welfare recipients in 11 WtW grant sites, chosen to achieve diversity in terms of grantee type, urban versus rural location, and local economic conditions.
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MPR received data from the 11 WtW study sites on their caseloads of welfare recipients in selected counties for a reference month.(1) We obtained quarterly administrative earnings data and monthly welfare benefits data for all these individuals for the year preceding the reference month, as well as for a period of more than two years after the reference month. For this UI study, we included 5 of the 11 WtW sites for which we had large enough samples to conduct the study—Phoenix, Arizona; Chicago, Illinois; Baltimore, Maryland; Philadelphia, Pennsylvania; and Fort Worth, Texas (Table II.1). These sites provide some variation in terms of geographic location and TANF program parameters. Texas has very low benefits and a comparatively restrictive TANF program, while Illinois and Pennsylvania have more-generous benefits and less restrictive TANF programs (Table II.2). For instance, a family of three in Texas with no other counted income is eligible to receive $201 per month, compared with $377 in Illinois, and $421 in Pennsylvania. Similarly, the break-even level of income above which a person no longer has TANF eligibility is $407 per month in Texas but more than $1,100 in Illinois.
| Site | Reference Month | Reference Sample | Exited Welfare for Work
Within One Year of Reference Month |
|
|---|---|---|---|---|
| Number | Percent | |||
| Phoenix, AZ | March 2000 | 6,758 | 3,208 | 48 |
| Cook Co., IL | August 2000 | 39,513 | 14,482 | 37 |
| Baltimore Co.,MD | July 2000 | 2,669 | 967 | 36 |
| Philadelphia, PA | September 1999 | 34,813 | 10,833 | 31 |
| Tarrant Co., TX | May 2000 | 2,273 | 1,512 | 67 |
| Source: Administrative records data from selected Welfare-to-Work Evaluation study sites, assembled by Mathematica Policy Research, Inc. | ||||
This study focuses on welfare recipients who exited the welfare rolls within one year of the reference month and who were employed at the time of the exit. We focus on recipients who left the rolls and who held jobs around the time of exit because the primary intent of the UI program is to provide support for workers in case of job loss. Consistent with the definition used in most state TANF leaver studies, we considered a person to have exited the TANF rolls if he or she left TANF and remained off the rolls for two consecutive months. Again, consistent with the definitions used in previous studies, a person is counted as having left welfare “for work” if he or she held a job at the time of TANF exit or approximately within three months of TANF exit.(2)
| State | TANF Break-Even Income at Month 4 of Employment | Maximum Monthly TANF Benefits for Families of Three |
|---|---|---|
| Arizona | $572 | $347 |
| Illinois | 1,131 | 377 |
| Maryland | 627 | 417 |
| Pennsylvania | 823 | 421 |
| Texas | 407 | 201 |
| Source:
Committee on Ways and Means (2001). Note: Figures pertain to 2000. |
||
There was considerable variation across the states in the fraction of reference group members who left welfare and found employment. For instance, 67 percent of the reference group in Tarrant County, Texas had exited the welfare rolls for employment within the year after the reference month, compared with only 31 percent in Philadelphia, Pennsylvania (Figure II.1).(3) Across the sites, another 16 to 34 percent had exited welfare but had not found jobs within three months of exit. Although most of our analysis focuses on individuals who left welfare for work, we also examine potential UI monetary eligibility among people who left TANF but not for work, as some of those individuals may eventually have found jobs. Finally, a considerable number of people who had not exited TANF also were employed—just under 30 percent in Phoenix, Philadelphia, and Tarrant County, and around 40 percent in Baltimore County and Cook County, Illinois (not shown). We also briefly examined the extent to which this group would have monetary eligibility for UI.
|
| Source: Administrative records data from selected
Welfare-to-Work Evaluation study sites, assembled by Mathematica Policy Research,
Inc. Note: Figures pertain to TANF exit and employment status within one year of the reference period among the full reference samples. The reference period is September 1999 for Philadelphia and between March and August 2000 for the other sites. Baltimore County largely surrounds but does not include the city of Baltimore. Tarrant County includes the city of Fort Worth. |
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We conducted two types of analyses: (1) an examination of former TANF recipients’ potential UI eligibility, and (2) the sensitivity of UI monetary eligibility to changes in UI program parameters.
Analysis of Potential Eligibility. Much of the analysis in this study focuses on determining potential monetary eligibility for UI. In other words, we examined the extent to which former welfare recipients would have monetary eligibility for UI if they were to experience a qualifying job separation (that is, a job separation occurring through no fault of their own), and if they were available for full-time work. We focused on potential eligibility among all those who exited TANF for work in order to better understand what safety nets are available to these low-wage workers in case of job loss. Our examination of potential UI eligibility covers each of the eight quarters after the sample members’ exit from TANF. To estimate potential monetary UI eligibility during any given quarter after TANF exit, we used both data on the former TANF recipients’ earnings during the UI base period for that quarter and the eligibility rule for the appropriate year for the relevant state. Earnings used are based on those reported in the wage records data.
Based on each state’s rule, for each quarter after TANF exit, former TANF clients who had worked for at least two quarters in the relevant base period for that quarter and who met the minimum qualifying earnings and the high-quarter earning in that base period were treated as potentially having monetary eligibility for UI for that quarter. As mentioned in Section A of Chapter I, , “base period” typically refers to the first four of the last five completed quarters. The minimum qualifying earnings and the high-quarter earnings for each state are shown in Table I.2. It is important to recognize that our estimates of monetary UI eligibility are based on clients’ earnings during the relevant base period for each quarter if they were to experience a job loss during the particular quarter; our basic analysis is not restricted to those who actually experienced a job loss.
Sensitivity of Potential Eligibility to Alternative UI Program Parameters. Concerns about the decrease in UI participation rates over time and the desire that UI eligibility rules keep pace with the changing characteristics of the workforce have led some advocates to suggest reforms to the UI system. These reforms have focused on redefining labor force attachment, redefining the base period, better redefining separation through no fault, redefining ability and availability for work, and increasing the currently low benefit levels in many states. In our analysis, we examined the sensitivity of potential UI monetary eligibility to three types of changes in UI program parameters: (1) alternative definitions of the base period, (2) alternative definitions of earnings requirements, and (3) alternative definitions of weekly benefit calculations. For example, most of the analysis of potential UI eligibility is based on the standard definition of the base period used in most states—earnings during the first four of the last five completed quarters. However, we also used two alternative definitions of the base period in our examination of UI eligibility: (1) earnings during the last four completed quarters, and (2) earnings during the current quarter and the last three completed quarters. We conducted simulations to estimate the effects of each of these definitions of the base period, as well as to determine monetary eligibility if a state sequentially used all three rules to determine eligibility. We also examined the sensitivity of monetary UI eligibility to the alternative definitions of minimum qualifying earnings and high-quarter earnings currently in use across various states in the nation.
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Before examining monetary eligibility among the sample members, it is useful to briefly describe the sample members’ TANF and employment experiences during the year preceding the reference month, as well as their earnings and employment patterns after welfare exit.(4) We observed considerable variation in TANF receipt across the study sites during the year preceding the reference month. For instance, clients in Philadelphia spent on average just more than 80 percent of the time during the year prior to the reference month on welfare; by contrast, clients in Tarrant County and Phoenix spent just over 50 percent of that time on welfare (Table II.3). The average amount of TANF benefits received also varied considerably, with clients receiving less than $200 per month, on average, at the time of the reference month in Tarrant County, compared with more than twice that amount in Philadelphia.
| Characteristics | Phoenix, AZ |
Cook Co., IL |
Baltimore Co., MD |
Philadelphia, PA |
Tarrant Co., TX |
|---|---|---|---|---|---|
| Age at Reference Month (Years) | |||||
Less than 20 |
7 | 6 | 5 | 8 | 7 |
21 to 30 |
48 | 47 | 31 | 42 | 50 |
31 to 40 |
32 | 33 | 28 | 33 | 29 |
More than 40 |
12 | 15 | 36 | 17 | 14 |
(Average age, in years) |
(30) | (31) | (37) | (31) | (30) |
| Percentage of Time on TANF in Year Preceding Reference Month | |||||
0 |
5 | 2 | 7 | 2 | 6 |
1 to 25 |
23 | 7 | 14 | 8 | 24 |
26 to 50 |
21 | 9 | 12 | 7 | 20 |
51 to 75 |
17 | 15 | 13 | 9 | 19 |
76 to 99 |
14 | 28 | 10 | 13 | 14 |
100 |
21 | 39 | 45 | 61 | 17 |
(Average) |
(56) | (79) | (69) | (83) | (54) |
| Average Monthly TANF Benefit Amount in Year Preceding Reference Month | |||||
Less than $200 |
15 | 32 | 35 | 10 | 56 |
$200 to $300 |
39 | 37 | 11 | 11 | 41 |
$300 to $400 |
31 | 18 | 32 | 30 | 2 |
More than $400 |
13 | 13 | 22 | 49 | 0 |
(Average) |
($297) | ($258) | ($296) | ($398) | ($187) |
| Percentage of Time Employed in Year Preceding Reference Month | |||||
0 |
36 | 38 | 42 | 49 | 35 |
1 to 25 |
15 | 15 | 13 | 16 | 17 |
26 to 50 |
16 | 13 | 12 | 14 | 17 |
51 to 75 |
15 | 13 | 12 | 11 | 16 |
76 to 100 |
18 | 22 | 22 | 10 | 16 |
(Average) |
(41) | (42) | (40) | (30) | (40) |
| Sample Size | 6,758 | 39,513 | 2,669 | 34,813 | 2,273 |
| Source: Administrative records data from selected Welfare-to-Work Evaluation study sites, assembled by Mathematica Policy Research, Inc. | |||||
There was less variation across the sites in terms of clients’ reported employment—clients in most of the sites were employed for around 40 percent of the time during the year preceding the reference month. The exception was Philadelphia; in that site, on average, clients were employed about 30 percent of the time during the year preceding the reference month, and nearly half the clients had no employment during that year.
As we saw in Figure II.1, between 30 and 50 percent of clients left welfare within one year of the reference month and found employment within 3 months of welfare exit, except for Tarrant County where the rate was of almost 70 percent of clients. Average quarterly earnings at the time of TANF exit ranged between $2,100 and $2,500 for most sites (Table II.4). Baltimore County, where clients had average quarterly earnings of more than $2,800, was the exception. That finding is consistent with Baltimore County having somewhat older sample members on average. We observed the lowest level of earnings in Tarrant County; around 35 percent of former TANF recipients there earned less than $1,000 during the quarter of their TANF exit.
| Phoenix, AZ |
Cook Co., IL |
Baltimore Co., MD |
Philadelphia, PA |
Tarrant Co., TX |
|
|---|---|---|---|---|---|
| Quarterly Earnings at Time of Exit | |||||
Less than $1,000 |
29 | 31 | 26 | 24 | 35 |
$1,000 to $2,000 |
21 | 19 | 20 | 21 | 21 |
$2,000 to $3,000 |
18 | 18 | 17 | 20 | 15 |
$3,000 to $4,000 |
15 | 15 | 12 | 16 | 13 |
$4,000 to $5,000 |
9 | 9 | 9 | 10 | 7 |
More than $5,000 |
7 | 8 | 15 | 8 | 8 |
| (Average) | ($2,240) | ($2,324) | ($2,846) | ($2,460) | ($2,106) |
| Sample Size | 3,208 | 14,482 | 967 | 10,833 | 1,512 |
| Sources: Administrative records
data from selected Welfare-to-Work Evaluation study sites, assembled by
Mathematica Policy Research, Inc. Note: Sample includes those who exited TANF and held a job within three months of TANF exit. |
|||||
Even though many welfare recipients are able to find jobs, they often have greater difficulty than do other workers in keeping them. Former welfare recipients typically lack experience with the world of work, and they usually obtain entry-level jobs associated with high turnover. When the economy is weak, employers who wish to reduce their workforce may lay these workers off before they do so to more experienced workers. Indeed, we found that the average levels of reported employment among those who left TANF for work declined considerably over time. During the quarter after TANF exit, nearly 90 percent of welfare recipients who left for work had UI-reported employment (Figure II.2). This fraction dropped steadily over time, and at two years after TANF exit, employment rates among the five sites ranged from roughly 50 percent to roughly 70 percent.
Some individuals who are not employed at the time of their TANF exit may eventually enter the labor market. We see from the bottom of Figure II.2 that a small fraction of these individuals indeed find employment. However, employment levels for these individuals remain very low (and constant), at around 20 percent. On average, their quarterly earnings were about half the earnings of those who left TANF for work (between $1,150 to $1,350; not shown).
|
| Source: Administrative records data from selected
Welfare-to-Work Evaluation study sites, assembled by Mathematica Policy Research,
Inc. Note: Figures pertain to those who exited TANF within one year of the reference period. The reference period is September 1999 for Philadelphia and between March and August 2000 for the other sites. Baltimore County largely surrounds but does not include the city of Baltimore. Tarrant County includes the city of Fort Worth. |
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(1) These data were obtained to provide contextual background for the main analysis of WtW participants in these sites. The “reference month” drawn was the month in which WtW programs began enrolling WtW participants in the main evaluation sample.
(2) We include people who had reported earnings during either the quarter of TANF exit or the quarter after TANF exit.
(3) It is possible that differences in state TANF benefit generosity may have led more people in Philadelphia than in Texas to combine work and welfare, thus explaining some of these differences. For instance, individuals who had income of just over $400 per month are not eligible for TANF benefits in Texas, while individuals could have an income of around $800 per month in Pennsylvania and still be eligible. Interestingly, the proportion of those remaining on TANF who also worked was fairly similar in Tarrant County and in Philadelphia. Twelve months after the reference months, just under 30 percent of individuals in both sites who were still on welfare also held employment at some point during that quarter (not shown).
(4) Unfortunately, because we have only administrative data, we are able to examine only a very limited set of characteristics.
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