Watching the Clock Tick: Factors Associated with TANF Accumulation

Abstract

The 1996 welfare reform made extended welfare stays more difficult. One of the most notable provisions was the 60-month lifetime limit on cash benefits through the Temporary Assistance to Needy Families (TANF) program. This study investigated the personal characteristics associated with accumulating more months on TANF. Using four waves of data from the Women's Employment Study, we examined factors surrounding receipt at varying levels: low (less than 20 months), medium (20 to 39 months), and high (40 to 60 months). Medium and high accumulation groups had many factors in common relative to the low group. However, demographic variables, such as the presence of a partner and number of children, mattered more in determining whether someone would accumulate a relatively low as opposed to medium amount of time on TANF. For the high accumulation group, the presence of human capital problems, as well as persistent personal and family challenges, such as child and maternal health problems and domestic violence, greatly increased the likelihood of a longer stay. KEY WORDS: time limits; welfare receipt; welfare reform ********** In the years since passage of the Personal Responsibility and Work Opportunity Reconciliation Act (PRWORA) of 1996 (R L. 104-193), which changed cash welfare from an income support entitlement to a time-limited, work-based system, welfare caseloads have been cut by more than half. Studies of welfare have documented that between 40% and 70% of those leaving the Temporary Assistance for Needy Families (TANF) program were employed during the quarter of their exit (Acs & Loprest, 2004).This success in transition was in part a result of a strong U.S. economy. However, a growing concern among welfare policymakers and frontline program staff is that those still receiving welfare are significantly more disadvantaged or harder to serve in a work-based welfare system than those who left the rolls following the 1996 reform. During the economic boom of the late 1990s, many argue, the most employable welfare recipients were likely to have found employment, leaving behind recipients with more significant barriers to employment, such as physical and mental health problems, low levels of education, or substance abuse issues. Furthermore, not everyone who leaves welfare remains off the rolls. Estimates of the proportion of leavers returning to welfare some time in the year following their exit range from 17% to 38% (Acs & Loprest, 2004). Given the now time-limited nature of welfare, it is crucial to know more about those who accumulate more months on their TANF clocks and are thus at-risk of losing cash benefits. Employment opportunities for recipients since 2001 have not been as plentiful as they were in the late 1990s, making this new line of research more paramount. In this article, we use a panel survey of women who received TANF in a Michigan county to determine which personal characteristics are associated with accumulating a relatively low, medium, or high number of months toward the federal 60-month time limit on welfare receipt. CONCEPTUAL FRAMEWORK A major criticism of the Aid to Families with Dependent Children (AFDC) program was that providing cash assistance offered women an alternative to seeking employment. Some argued that recipients were behaving rationally by staying on welfare. Employment has costs, such as transportation and child care, and under old rules, wage earnings usually resulted in a dollar-for-dollar reduction of AFDC benefits and reduction or loss of associated benefits such as food stamps and Medicaid. PRWORA dramatically altered welfare and its work incentives through policies such as work requirements and time limits, as well as through expanded child care assistance and other work supports. In addition, several provisions made it more difficult to stay on welfare for extended periods. For example, the reform legislation mandated that recipients be working or engaged in work-related activities within 24 months of entering the TANF program or they could be dropped from the rolls. …