Impact of South Carolina’s TANF Program on Earnings of New Entrants Before and During the Great Economic Recession

Abstract

AbstractThis study assesses the impact of South Carolina’s Temporary Assistance for Needy Families (TANF) program, Family Independence (FI), on the longitudinal earnings of three cohorts of new entrants who entered the study before, at the beginning of, and at the height of the 2007-2009 recession. Applicants who began the application process but did not enroll in TANF were propensity-score matched to entrants by background characteristics including pre-intervention earnings history, and served as the comparison group. We constructed a latent growth curve model to test whether earnings histories were similar for the program and comparison groups up until FI intake, to estimate program impact by comparing post-intake earnings of program participants to those of the comparison group, and to determine the statistical significance of cohort differences in program impact. The findings showed FI had a positive impact on the earnings of participants before the recession. The effect became weaker during the state’s period of rising unemployment, and disappeared during the worst economic recession in decades. This study demonstrates the usefulness of longitudinal administrative data, propensity score matching, and latent growth modeling techniques for evaluating the impact of program interventions.