Was Welfare Reform Successful

1
Was Welfare Reform Successful?

• Todays Readings
• Sharon Parrott and Arloc Sherman, TANF AT
  10?Program Results are More Mixed Than Often
  Understood, http//www.cbpp.org/8-17-06tanf.htm
  Surf around, making sure to examine the Guide to
  TANF Reauthorization Issues
• Blank, Was Welfare Reform Successful?
  Economists Voice, www.bepress.com/ev, March,
  2006.
• DeParle, Ch 16 Boyfriends Milwaukee, Spring
  1999

2
Todays Questions

• What criteria should be employed when evaluating
  the success of welfare reform?
• What are the prospects for valid evaluations of
  the effects of welfare reform?
• What methodology can we trust?
• What do the experts say about the success of
  welfare reform?

3
What criteria should be used to evaluate welfare
reform?

• Should we evaluate TANF in its own terms?
• TITLE TEMPORARY ASSISTANCE FOR NEEDY FAMILIES
  (TANF) BLOCK GRANT OF THE PERSONAL RESPONSIBILITY
  AND WORK OPPORTUNITY RECONCILIATION ACT OF 1996
  A bill to restore the American family, reduce
  illegitimacy, control welfare spending and reduce
  welfare dependence.

4
What criteria should be used to evaluate welfare
reform?, cont.

• Should we ask if TANF has
• Restored the American family?
• Decrease divorce and cohabitation and increase
  marriage
• Reduced illegitimacy?
• reduce the number of children born to unmarried
  mothers
• Controlled welfare spending?
• Reduce the amount of money spent on welfare
• Reduced welfare dependency?
• Decrease the caseload
• If it has accomplished these goals should we
  declare welfare reform a success?

5
Alternative criteria

• Or should we also judge TANF by criteria
  developed to evaluate previous welfare programs?
• Does the reform reduce poverty? (adequacy)
• Does the program encourage personal
  responsibility? (work incentives)
• Does the reform treat participants and
  non-participants fairly?
• Does it treat persons in similar situations
  similarly? (horizontal equity)
• Does it treat people in different situations
  differently? (vertical equity)

6
Alternative criteria, cont.

• Does it target just the poor? (target efficiency)
  
• Are the rules easily understood by all?
  (participants and tax payers)
• Can be the programs be easily accessed by those
  eligible? (hassle factor)
• Can the program be administered without error or
  fraud?

7
What are the prospects for valid evaluation?

• 50 different programs in fifty different States
• No federal funds allocated for national
  evaluations
• States are not required to conduct TANF
  evaluations
• Much of what we know comes from State
  experimental programs authorized by the Family
  Support Act of 1988

8
What methodology can we trust?

• The Gold Standard control versus treatment
  groups
• Identify two groups of eligible persons,
  families, etc. with identical demographic and
  socioeconomic compositions
• Subject one group to the treatment
• Prohibit the other (control) group from
  experiencing the new rules
• Compare the outcomes for each group through time

9
Lessons from Federally Mandated Evaluations of
Demonstration Projects

• National Evaluation of Welfare-to-Work Strategies
  (NEWWS)
• NEWWS sites
• Work-first Atlanta, GA Grand Rapids,MI
  Riverside, CA Portland, OR
• Education Education Detroit, MI Oklahoma
  City,OK Atlanta Grand Rapids Riverside
  Columbus, OH
• Participants followed for 3 to 5 years.

10
Results of Demonstration Projectsin Four
Categories

• Five-Year Effects on Use of Employment-Related
  Services and Costs
• Five-Year Effects on Economic Outcomes for Adults
• Employment and Earnings
• Welfare Receipt and Payments
• Combined Income
• The ?Most Disadvantaged? Subgroup

11
Results of Demonstration Projectsin Four
Categories, cont.

• Benefit-Cost Analysis
• Effects on Family Circumstances and Childrens
  Well-Being
• For results in each category see
• http//aspe.hhs.gov/hsp/newws/5yr-11prog01/execsum
  .htm

12
Ongoing Federally Funded Demonstration Projects

• Federal dollars support evaluations of
  demonstration projects for specific subgroups of
  the recipients
• The hard to employ
• Substance abuse and/or chronic mental health
  problems
• Disabilities
• Victims of domestic abuse
• Families living in rural areas

13
Ongoing Federally Funded Demonstration Projects,
cont.

• Programs that aim directly to affect family
  formation outcomes
• Encourage marriage between unmarried parents
• Support to sustain marriage among low-income
  couples

14
Beyond the demonstration projects, how are
conclusions actually drawn?

• Spotty privately sponsored analyses
• Evaluating Trends in
• national data bases (CPS)
• State/National administrative data
• Limitations
• Cross-sectional data--snap shots
• Data do not reflect what happened to families
  when they left welfare

15
Did Welfare ReformRestore the American Family ?

• National Healthy Marriage Resource Center
• http//www.healthymarriageinfo.org/
• (Go to Research and Trends)
• Marriage rates
• Attitudes toward Marriage
• Attitudes toward Cohabitation

16
Marriage and Divorce Rates, 1950-2000
17
DID Welfare ReformReduce illegitimacy ?

• Teen Births Continue Drop Births to Unmarried
  Women on the Rise
• Center for Disease Control and Prevention
  http//www.cdc.gov/nchs/
• BirthsPreliminary Data, 2005,
• National Vital Statistics Reports
  http//www.cdc.gov/nchs/data/nvsr/nvsr55/nvsr55_11
  .pdf

18
Review Ch7FamilySize.ppt

• The total number of live births to all unmarried
  women is rising!
• The number of births to black unmarried women is
  down
• The percentage of births to unmarried mothers is
  rising
• The percentage babies born outside of marriage is
  rising for whites and declining for blacks
• The percentage of low birth weight babies is
  rising slightly.

19
Hamilton BE, Ventura SJ, Martin JA, and Sutton
PD. Preliminary births for 2004. Health E-stats.
Hyattsville, MD National Center for Health
Statistics. Released October 28, 2005.
http//www.cdc.gov/nchs/products/pubs/pubd/hestats
/prelim_births/prelim_births04.htmFigure202
20
DID Welfare Reform Reduce illegitimacy ?, cont.

• Also see National Healthy Marriage Resource
  Center
• http//www.healthymarriageinfo.org/research/?d8C
  515EEE-06E6-4BD4-8301-7FD852C43591

21
Did Welfare Reform Control Welfare Spending?

• Yes, and No
• See Spending on Social Welfare Programs?in Rich
  and Poor States, Key Findings, U.S. Department of
  Health and Human Services Office of the Assistant
  Secretary for Planning and Evaluation, August
  2004
• http//aspe.hhs.gov/hsp/social-welfare-spending04/
  summary.htm

22
Source ASPE, 2004
23
Did PRWORA Control Welfare Spending?Per Capita
Spending on AFDC/TANF, FY1977-200
Source ASPE, 2004
24
Control Welfare Spending?Per Capita Spending on
Medicaid, FY1977-2000
Source Source ASPE, 2004
25
Control Welfare Spending?Per Capita Spending on
Other Services, FY1977-2000
Source ASPE, 2004
26
Net Change in State Spending

• Per capita ? in TANF 14
• From 54 in FY 1997 to 40 in FY 2003
• Per capita ? in Medicaid 400
• From 600 in FY 1997 to 1000 in FY 2004
• Per capita ? in non-health services 88
• From 74 in FY 1997 to 162 in FY 2004
• Per capita ? in Total Spending 474
• (Source ASPE, 2004)

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29
Source for the previous 2 slides

• Therese McGuire and David F. Merriman, Has
  welfare reform changed State Expenditure
  patterns?, Policy Brief 7, National Poverty
  Center available at http//www.npc.umich.edu/publi
  cations/policy_briefs/brief7/

30
Control Welfare Spending?

• State total spending increased in absolute and
  real dollars
• Medicaid, and other services increased much more
  than TANF assistance decreased
• Federal Spending increased in absolute and real
  dollars
• SSI and EITC ( both indexed) increased more than
  Food Stamps and TANF decreased
• Overall increase in total (State plus Fed)
  welfare spending
• Would the increase be larger in the absence of
  PRWORA?

31
Source ASPE, 2004
32
Did Welfare ReformDecrease Dependency?

• Welfare rolls fell by around 60 percent between
  1996 and 2000.
• Caseloads continued to fall after 2000 as poverty
  began to rise.
• Caseloads did not increase with recession
• Personal responsibility
• Employment rates for single mothers rose from 62
  in 1995 to 73 in 2000. In 2005 they had fallen
  to 69.
• Source TANF AT 10?Program Results are More Mixed
  Than Often Understood, Sharon Parrott and Arloc
  Sherman http//www.cbpp.org/8-17-06tanf.htm.

33
National Welfare Caseloads, March 1994-September
2004
Source U.S. HHS, Administration for Children and
Families, http//www.ncsl.org/statefed/welfare/cas
eloadwatch.htmoverall
34
Alternative Criteria Work and Income, aka
Personal Responsibility

• LFPR for single mothers rose from 44 to 66
  percent between 1994 and 2001
• (Source Blank, 2006)
• Employment rates
• Rose from 62 to 73 percent, 1995-2000
• Fell to 69 percent in 2005
• (Source Parrot and Sherman, 2006)

35
Alternative Criteria Work and Income, cont.

• Adequacy
• Average incomes rose by about 5,000
• Earnings increases were larger than welfare
  benefits declines
• Income is not adjusted for costs of working
• Modest income growth over time
• (Source Blank, 2006)

36
Work and Income, cont.

• Hardship? (Adequacy)
• More single-mothers report not being on welfare
  and not working
• Fewer poor children receiving cash assistance
• Women involuntarily terminated have lower incomes
  and worse outcomes--how are they surviving?
• Source Parrott and Arloc Sherman, 2006
• http//www.cbpp.org/8-17-06tanf.htm.

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38
Poverty Reduction

• Poverty fell initially
• Poverty rates for single-mother households fell
  to historically low levels by late 1990s
• ? Slight increase in past 4 years
• Increases in employment greater than declines in
  poverty
• Share of the working poor rose and is higher than
  in early 1990s
• Share of the poor living in extreme poverty
  reached a historic high, 43 percent in 2005.

39
Poverty reduction, cont.

• 1994 2000 2004
• All ages
• All races 14.5 11.3 12.7
• Blacks 30.6 22.5 24.7
• Hispanics 30.7 21.5 21.9
• Under 18
• All races 21.8 16.2 17.8
• Blacks 43.8 31.2 33.6
• Hispanics 41.5 28.4 28.9

40
Especially for children . . . Poverty Rates
Among Children
Source U.S. Census Bureau, http//www.mindfully.o
rg/Reform/2005/37-Million-US-Poverty1oct05b.gif
41
Poverty Rates Among Black Children, cont.
Melissa G. Pardue, Sharp Reduction in Black
Child Poverty Due to Welfare Reform, The
Heritage Foundation Backgrounder 1661, June
12,2003 http//www.heritage.org/Research/Welfare/b
g1661.cfm?renderforprint1
42
Extreme Poverty (lt50 PL ) (Source P60-231)

• Trends 1994-2005
• ? Fell from 5.9 percent in 1994 to 4.5 percent in
  2000
• ? Rose continuously to 5.4 percent by 2004
  didnt change in 2005.
• By age in 2005
• Persons 18-24 had highest rates--9.4 percent
• Persons under 18 were next at 7.7 percent
• By family status
• Persons in unrelated subfamilies have highest
  rates of extreme poverty 25.2 percent
• Children under 6 years 8.9 percent
• By race
• Blacks have highest rates (11.7 percent) followed
  by non-white Hispanics (8.6 percent)

43
Extreme Poverty Rates Among Children by Race
Source U.S. Census Bureau, http//www.jointcenter
.org/DB/printer/chilpovt.htm
44
Alternative Criteria Other effects

• Effects on Children
• child abusedown since early 1990s
• Some positive achievement and behavioral effects
  on young children associated with use of
  center-based child care
• Some small negative effects on adolescents
  associated with lack of parental supervision
• Source Blank, 2006

45
What really caused the changes in work and income?

• TANF Work enforcement
• Diversion effects.
• Sanctions, time limits, messages??
• Good economy
• Many jobs, even for the unskilled.
• Rising real wages.
• New benefits
• Especially EITC
• a higher minimum wage (Sept. 1997)
• Relative role of these factors is disputed.

46
Limitations of reform A conservatives agenda

• By and large, welfare reform was a grand success!
• Finish work enforcement.
• Recent reauthorization of TANF.
• Keep welfare leavers at work
• An hours threshold for EITC.
• Raise the incomes of leavers
• EITC, minimum wage.
• Extend work enforcement to men
• Using criminal justice and child support.
• Strengthen marriage.
• Source Larry Mead

47
Limitations of reform A liberals agenda

• Too soon to claim success
• Collect and analyze nuanced data on
• Well-being of low-income families no longer on
  welfare
• Child effects
• Family effects
• Determine what combination of negative and
  positive incentives work best
• Increase child care subsidies
• Expand health insurance for low-income working
  adults
• Sustain safety net for those for whom employment
  is just not possible
• Source Blank, 2006

48
Key Elements of TANF Reauthorization (Signed
into law, February 8, 2006)

• Eliminates the separate work participation rate
  requirements for two-parent families (thus
  applying the same lower rate to all families).
• Increases minimum state work participation rates
  from 50 for FY2006 to 70 for FY2010.
• Revises requirements for calculation of
  participation rates and recalibration of the
  caseload reduction credit (base year is 2005).

49
Key Elements of TANF Reauthorization Work
Requirements

• Adds a new part C (Fatherhood Program) to promote
  responsible fatherhood.
• Requires TANF programs to be mandatory partners
  with One-Stop Employment Training Centers created
  under the Workforce Investment Act of 1998
• Includes 150 million to support programs
  designed to help couples form and sustain healthy
  marriages.
• For more information, see http//www.cbpp.org/2-9
  -07tanf.htm