Journal Issue: The Next Generation of Antipoverty Policies Volume 17 Number 2 Fall 2007
Rebecca M. Blank
Welfare Reform, Reduced Caseloads, and Increased Work - by Some
As shown in figure 1, welfare caseloads plummeted during the 1990s. Between 1994 and 2004, the number of adults on welfare fell 60 percent, from 5 million to 2 million. Caseloads began falling even before passage of the 1996 welfare reform law. The decline slowed during the early 2000s, when economic growth slowed and unemployment rose, but to many people’s surprise it has continued, though many families remain on welfare and only about one-third of these families’ adult heads met work requirements in 2003.
The remaining TANF caseload includes at least three groups, only one of which is seriously disconnected from work. One group includes long-term and short-term TANF recipients who are working relatively steadily, especially in states with lower benefit reduction rates (the rate at which benefits are reduced as earnings increase) where women can combine welfare benefits with low-wage work. Another group includes short-term nonworking TANF recipients who use benefits after some economic disruption in their lives, but then leave welfare relatively quickly.
The third group—longer-term recipients who are not working or working only sporadically— is of most concern. Experts estimate that these longer-term (and typically nonworking) welfare recipients make up 40–45 percent of the caseload.1
In addition to long-term TANF participants, in some states there are certain families who have been moved off TANF and into special state programs (SSPs). As of 2003, thirty states had created SSPs as a way to avoid counting these families toward their TANF welfare goals. Participants in SSPs are not included in the TANF caseload because they are funded by state dollars rather than the TANF block grant, even though they typically receive benefits on the same formula as those receiving TANF. In 2003, an estimated 320,000 women—14.6 percent of adult welfare recipients—were in an SSP for part or all of the year, although in some states the share is much higher.2
The substantial declines in TANF caseloads since the mid-1990s might lead one to expect that the remaining caseload would be more and more heavily populated by the more disadvantaged and longer-term recipients. But though this group represents a large share of the caseload, its share does not seem to have increased.3 The explanation appears to be that more disadvantaged women have left welfare at about the same rate as more workready women. Since the 1996 law was passed, more and more women are being involuntarily terminated from welfare, either through sanctions or through time limits. All states have imposed sanctions on women who do not follow program rules (for example, if they do not show up for welfare-to-work programs). And since states implemented their TANF plans, a federal sixty-month time limit has applied to the majority of the caseload, with about one-fourth of the states imposing even stricter limits. Many studies have noted that more disadvantaged women (those with the characteristics of long-term welfare recipients) are more likely than others to be sanctioned or time limited.4