After the Revolution: Welfare Patterns since TANF Implementation

Abstract

Welfare programs changed dramatically in 1996. Caseloads dropped by more than 9 million recipients over an eight-year period, and millions entered the labor market in the wake of these changes. Since the start of the revolution, research has emerged to document the ways former welfare recipients are using federal entitlement programs as they navigate and negotiate the post-AFDC era. In this article, the authors examine patterns of participation in TANF, the Food Stamp program, and Medicaid in Wisconsin. Very distinct patterns of participation emerged among the three programs: a single short period of receipt was common for TANF cycling was typical for food stamps, and a long spell was the standard for Medicaid. The authors also explored multiple program participation over a three-year period. Analysis revealed interactions and transitions not normally considered in this line of research. One key finding was the high number of transitions on and off benefits during these three years when the three programs were considered simultaneously. Policy implications are discussed. KEY WORDS: poverty; single mothers; social policy; TANF; welfare ********** In the 1990s the main cash welfare program for single-parent families, Aid to Families with Dependent Children (AFDC), faced widespread criticism. An oft-cited concern was that the structure of welfare meant that working did not pay. Because most AFDC recipients would have received a fairly low wage had they entered the labor market, and because they would have been ineligible for some ancillary benefits had they worked, the total package of support provided to many women on welfare was often higher than the income they might have earned in the labor market. Those receiving AFDC typically also received Medicaid, food stamps, and benefits through other programs. These incentives may have encouraged women to turn to welfare and use it long term. Working without these additional benefits might have fostered greater poverty among women and children. There were several policy responses as AFDC increasingly came under attack in the political campaigns of the mid-1990s. Some policy changes were designed to move women off welfare altogether. The Personal Responsibility and Work Opportunity Reconciliation Act (PRWORA) of 1996 (P.L. 104-193) eliminated AFDC, replacing it with Temporary Assistance for Needy Families (TANF). TANF instituted time limits for receiving federal cash assistance and required most participants to work. Other policy changes in the late 1990s were designed to increase income when women were in the labor market. For example, the Earned Income Tax Credit (EITC) was increased substantially, providing considerable benefits, but only to those with earnings. Funding for child care assistance was also increased. Moreover, some of the support programs were decoupled from AFDC, so that families could receive Medicaid (and later the State Children's Health Insurance Program, SCHIP) even when not receiving cash assistance. In addition, in the rollout of TANF states were allowed to design and implement policies and programs, and they responded with a wide array of innovations. Many of these programs were designed to move families off cash assistance and into work quickly but to provide them with other supports such as child care subsidies, access to health insurance, and transportation services. Have these policy changes affected welfare use? We know that there were dramatic declines in the AFDC/TANF caseloads throughout the 1990s, from 14.4 million individuals in March 1994 to 5.0 million in September 2002. We know relatively little, however, about the dynamics and correlates of program participation in the new world of welfare. Perhaps more important, in light of the interest in the interactive effects of multiple programs, we know even less about how families may use several programs simultaneously, even when they are not receiving cash. …