Welfare Participation Research Articles

Economic self-sufficiency among immigrant TANF-leavers: Welfare eligibility as a natural experiment

We capitalize on inter- and intra-state variation in state welfare rules regarding new immigrants to simulate a “natural experiment” that provides evidence on the impact of post-reform welfare (TANF) participation on immigrant women’s economic self-sufficiency. Using data from the Survey of Income and Program Participation (1996–1999 and 2001–2003 panels) and textual data on state welfare rules, we examine three measures of economic well-being – employment, employment stability, and wage trajectories – to obtain a comprehensive picture of immigrants’ post-welfare experiences. Findings suggest that immigrant TANF-leavers are no more or less likely to be employed than either TANF-eligible (but not receiving) or TANF-ineligible immigrant women (statistical and natural control groups, respectively). However, given employment, TANF-leavers have substantially longer spells of stable employment and steeper wage trajectories than immigrant women in both control groups.

‘When one person makes it, we all make it’: a study of Beyond Welfare, a women‐centered community‐based organization that helps low‐income mothers achieve personal and academic success

Access to post‐secondary education for welfare recipients has been profoundly curtailed by social and welfare policies. However, many low‐income mothers know that post‐secondary education is the best means to escape poverty. This article focuses on five ‘student mothers’ who have persisted in fulfilling their dreams of a college education with the aid of Beyond Welfare, a community‐based organization (CBO) that helps soften the hardships of juggling family, college, and work while in poverty. Based on interviews with five Beyond Welfare participants, this article explores the organization’s role in supporting the student mothers’ personal and academic success. This article illustrates how important it is for student mothers to have a supportive community, education focused on the structural barriers to leaving poverty, and encouragement for academic success. To conclude, the article reflects on why educators need to become involved in activism and research on behalf of low‐income families.

EXPLAINING THE DISTINCTIVENESS OF MEXICAN-IMMIGRANT WELFARE BEHAVIORS: THE IMPORTANCE OF EMPLOYMENT-RELATED CULTURAL REPERTOIRES.

Social scientists generally seek to explain welfare-related behaviors in terms of economic choice, social structural, or culture of poverty theories. Because such explanations incompletely account for nativity differences in public assistance receipt among those of Mexican origin, this paper draws upon the sociology of migration and culture literatures to develop alternative materialist-based cultural repertoire hypotheses to explain the welfare behaviors of Mexican immigrants. We argue that immigrants from Mexico arrive and work in the United States under circumstances fostering employment-based cultural repertoires that, compared with natives and other immigrant groups, encourage less welfare participation (in part because such repertoires lead to faster welfare exits) and more post-welfare employment, especially in states with relatively more generous welfare-policies. Using individual-level data predating Welfare Reform from multiple panels of the Survey of Income and Program Participation (SIPP), merged with state-level information on welfare-benefit levels, we assess these ideas by examining immigrant-group differences in welfare receipt, retention, and transition to employment across locales with varying levels of welfare benefits. Overall, the results are consistent with the notion that cultural repertoires incline Mexican immigrants to utilize welfare not primarily to avoid work, cope with disadvantage, or perpetuate a culture of dependency, but rather mostly to minimize employment discontinuities. This result carries important theoretical and policy implications.

The dynamic effects of an earnings subsidy for long-term welfare recipients: Evidence from the self sufficiency project applicant experiment

In the Self Sufficiency Project Applicant Experiment, new welfare entrants were informed that if they remained on public assistance for a year they would become eligible to receive a generous earnings subsidy offer. Those who satisfied the waiting period, and then left welfare and began working full time within the following year, were entitled to receive payments for up to 36 months whenever they were off welfare and working full time. A simple optimizing model suggests that the program rules created an unusual sequence of incentives: (1) to prolong the initial spell on welfare for at least 12 months to become eligible for the subsidy offer; (2) to lock in subsidy entitlement by finding full time work and leaving welfare in the 12–24 month period after initial entry; and (3) to choose work over welfare during the three years that subsidies were available. Consistent with these implications, comparisons between the experimental treatment group and a randomly assigned control group show that the program increased welfare participation in the first year after initial entry and lowered it over the following 5 years. We develop an econometric model of welfare participation and program eligibility status that allows us to separately identify the behavioral effects associated with the program rules. We find important responses to all three incentives, and that the program impact persisted after subsidy payments ended, although the effect decayed over time.

Assessing the literacy skills of adult immigrants and adult English language learners

AbstractThis chapter examines the characteristics and performance of adult immigrants and adult English language learners on the National Assessment of Adult Literacy. These factors are related to key social outcomes such as involvement in the labor force, income, and welfare participation, and the data reported can be used in making decisions about program planning, as well as in implementation of adult ESOL programs and services.

How Program Participants Learn Program Rules: Implications for Implementation and Evaluation

Recent research suggests that program participants have limited knowledge of the rules governing social programs. These knowledge gaps limit program effectiveness. This article uses a unique survey of Wisconsin welfare participants to explore factors associated with whether single mothers have accurate knowledge of child support rules. It also assesses the accuracy of knowledge gained from their own experience, formal sources, and informal sources. Multivariate analyses document the difficulty participants have in understanding new rules. They also highlight the roles that formal sources and clients’ own experience play in obtaining accurate program information. Results suggest the possibility that informal sources provide inaccurate information.

On Mandatory Activation of Welfare Recipients

This paper investigates whether mandatory activation programs for welfare recipients have effects on welfare participation, employment and disposable income. In contrast to earlier studies, we are able to capture both entry and exit effects. The empirical analysis makes use of a Swedish welfare reform in which the city districts in Stockholm gradually implemented mandatory activation programs for individuals on welfare. Overall, we find that mandatory activation of welfare recipients reduces overall welfare participation and increases employment. We also find that mandatory activation programs appear to work best for young people and for people born in non-Western countries.

SWEtaxben: A Swedish Tax/Benefit Micro Simulation Model and an Evaluation of a Swedish Tax Reform

The purpose of SWEtaxben is to evaluate the impact of changes in the tax/benefit systems on households as well as the central governmental budget. Relating to the micro simulation literature this model can be labeled a static micro simulation model with behavioral changes. This behavioral change takes two different forms and use two different types of models; first binary models that describe mobility in/out from non-work states such as old age pension, disability, unemployment, long term sickness and second models that describe change in working hours and welfare participation. Thus, apart from the choice to work or not to work, working hours conditional on working as well as welfare participation are treated as endogenous variables. As an application the model is used to evaluate the recent Swedish make work pay reform, effective from 2007 and further reinforced in 2008 and 2009. The key characteristic of this reform is an in-work tax credit and decreased state tax rate. Simulations performed by SWEtaxben show increased working hours at both the intensive as well as extensive margin. The tax decrease together with dynamic changes results in a strong increase in household's incomes but also a reduction in income inequality. However, even considering the increase in hours of work, the reform is far from being self-financed.

The Social Construction of Client Participation: The Evolution and Transformation of the Role of Service Recipients in Child Welfare and Mental Disabilities

This article presents a comparative analysis of client participation (CP) in child welfare and mental health and mental retardation systems. It identifies three rationales for client participation (philosophical, pragmatic, and political), along with the limitations surrounding each rationale. It uses social construction theory to examine the historical and ideological underpinnings of organized, institutionally-sanctioned client involvement inside and outside government. In order to enhance the capacity of clients to influence service and benefit systems, their role must evolve through the mutual efforts of government-strengthening client participation policies and independent organizing from the bottom up through community development and advocacy programs.

Welfare Usage in the U.S.: Does Immigrant Birthplace and Immigration Status Matter?

The study of welfare participation in the U.S. prior to the 1996 welfare reform act and even afterward has focused on comparisons between native born and immigrant households. Analyses that have gone beyond this broad classification have focused on comparisons across race or with particular focus on particular groups like Hispanic immigrants. To the best of our knowledge, there is no study yet that tests for difference in welfare usage among immigrant groups and immigrant status. We do not expect welfare usage to differ among immigrant groups if we control for the factors that should predict welfare usage. Similarly, if immigration status does not prevent welfare usage for certain immigrants, then ceteris paribus, we do not expect welfare usage to differ among immigrant based on status. We investigate these possibilities by testing three related hypothesis using probability models. Our results suggest that birth place matters and the probability of welfare usage is not the same for all groups. We also find that for some birthplace groups, citizen and non-citizens differ with respect to welfare usage. Finally, we find that post welfare reform, the probability of being on welfare in comparison to U.S. born increased for all immigrant groups and these increases differed across groups. We provide possible explanations for our unexpected results.

Immigrants and welfare programmes: exploring the interactions between immigrant characteristics, immigrant welfare dependence, and welfare policy

The primary purpose of this paper is to provide a review of the papers within the economics literature that have examined the questions of immigrant welfare use and the responsiveness of immigrants to the incentives created by welfare systems. While our focus is largely on papers looking at the European case, we also draw on studies from the United States, in particular on issues where the European literature is thin. One set of papers asks whether immigrants who are more likely to use welfare are attracted to more generous welfare states. The results from these papers are not clear-cut. Another set of papers asks if immigrants use welfare more intensively than natives and if they assimilate out of or into welfare participation. In most cases, the unadjusted data show higher use of welfare by immigrants, although for some countries, for example Germany, this can be explained by differences in immigrants’ characteristics. Yet another set of papers finds that the rate of welfare use by existing migrants can influence the welfare use of newly arrived co-nationals. We illustrate some of these issues by looking at immigrant welfare use in Ireland and the UK. Immigrants in the UK appear to use welfare more intensively than natives, but the opposite appears to be the case in Ireland.

The Effects of Single Mothers’ Welfare Use and Employment Decisions on Children’s Cognitive Development

This research examines the effects of mothers' welfare and work decisions on their children's attainments using a random effect instrumental variables (REIV) estimator. The estimator employs sibling comparisons in a random effect framework and an instrumental variables approach to address the unobserved heterogeneity that may influence mothers' work and welfare decisions. The identification comes from the variation in mothers' different economic incentives that arises from the AFDC benefit structures across U.S. states. We focus on children who were born to single mothers with twelve or fewer years of schooling. The short-run child attainments under consideration are the Peabody Individual Achievement Test math and reading recognition scores from the Children of the National Longitudinal Survey of Youth 1979 cohort. Long-run attainments are a child's number of years of schooling by age 25 and his or her early adulthood labor income, drawn from the Panel Study of Income Dynamics. The REIV estimates imply that, relative to no welfare participation, participating in welfare for one to three years provides up to a 5 percentage point gain in a child's Picture Individual Achievement Test (PIAT) scores. The negative effect of childhood welfare participation on adult earnings found by others is not significant if one accounts for mothers' work decisions. At the estimated values of the model parameters, a mother's number of years of work contributes between $3,000 and $7,000 1996 dollars to her child's labor income, but has no significant effect on the child's PIAT test scores. Finally, children's number of years of schooling are relatively unresponsive to mothers' work and welfare participation choices.

Forward-Looking Behavior and Time Limits: How Do Rural TANF Clients Manage Their Welfare Eligibility?

ABSTRACT Placing time limits on benefits was seen by the proponents of the 1996 Personal Responsibility and Work Opportunity Reconciliation Act as a means to encourage welfare recipients to engage in forward-looking behavior so that they can plan for a life without welfare. Current studies provide mixed findings regarding the effects of time limits on welfare participation and focus primarily on the urban poor. In this study, we examine how Temporary Assistance for Needy Families (TANF) participants interpret and respond to time limits under different personal and local conditions. Data come from interviews conducted with 60 low-income women from two rural Mississippi counties. The results suggest that not all welfare clients are aware of time limits and that time limits rarely impact their behavior. Their views of time limits were influenced by three major factors: (1) a belief that their welfare status is temporary, (2) a misunderstanding of welfare policy, and (3) an inability to acknowledge personal and structural barriers to leaving welfare.

The impact of changes in child support policy

This paper measures the impact of child support reforms on payments to divorced mothers and welfare participation rates among them. A Stackelberg model of divorced parents’ behavior is calibrated to data from Wisconsin, where child support payments increased from $2,175.35 to $3,431.77 and welfare participation rates decreased from 33.5% to 9% between 1981 and 1992. Results show that new guidelines accounted for 24.4% and improved enforcement for 74% of the increase in payments. Higher payments accounted for a 3.9-percentage-point decline, decreasing welfare benefits an 8.4-percentage-point decline, and the two combined a 15-percentage-point decline in the welfare participation rate.

The dynamics of immigrant welfare and labor market behavior

This paper analyzes transitions into and out of social assistance, unemployment, and employment. We estimate a dynamic multinomial logit model, controlling for endogenous initial condition and unobserved heterogeneity, using a large representative Swedish panel data set. The empirical results suggest that particularly refugee immigrants display a greater degree of “structural” state dependence than natives. The high welfare participation rates among refugee immigrants may be due to the existence of a “welfare trap”, while participation among natives and non-refugee immigrants is largely due to permanent unobserved characteristics. These results suggest that welfare reforms may have differential effects on refugee immigrants and natives.

A Migration Study of Mother's Work, Welfare Participation, and Child Development

Abstract. This paper investigates how women's migration and labor supply behaviors respond to changes in welfare policies and labor market conditions, controlling for endogenous initial residence and unobserved heterogeneity. It also traces out how these responses influence educational inputs and child outcomes. The simulation results show that poor and low‐educated single women with children do change their residential locations in response to changes in welfare policies and labor market conditions. The magnitude of this response in the form of migration is rather modest. More importantly, however, such policy changes often have large and important impacts on particular at‐risk groups.

Public Health Insurance and SSI Program Participation Among the Aged

Previous researchers have noted that the 'categorical' Medicaid eligibility accompanying the welfare programs Aid to Families with Dependent Children (AFDC) and Supplemental Security Income (SSI) often far exceeds the value of these programs' cash benefits. It may be the case that the accompanying health insurance, not the cash benefit, is often the decisive factor in welfare participation. If so, welfare participation should decrease when cash and health insurance benefits are unbundled. We present a simple model of program participation with heterogeneous valuation of health insurance and transaction costs of participation. We evaluate the following four implications of the model: 1) SSI participation declines with the expansion of alternative routes to Medicaid (i.e., non-categorical Medicaid); 2) the availability of non-categorical Medicaid increases Medicaid participation among SSI nonparticipating eligibles; 3) the average SSI benefit collected by welfare recipients is higher when non-categorical Medicaid is available; and 4) the average SSI benefit rejected by nonparticipating SSI eligibles is higher when non-categorical Medicaid is available. Overall, the findings on the model's testable implications are mixed. The estimates imply strikingly large effects of the presence of alternative routes to Medicaid on both SSI and Medicaid participation, but the results for the hypotheses about SSI benefit amounts are sensitive to controls for recipient characteristics.

Evaluation of an In-Work Tax Credit Reform in Sweden: Effects on Labor Supply and Welfare Participation of Single Mothers

The purpose of this paper is to evaluate a recent Swedish in-work tax credit reform where we pay particular attention to labor market exclusion; i.e. individuals in as well as outside the labor force are included in the analysis. To highlight the importance of the joint effects from the tax and the benefit systems it appears particular relevant to analyze the labor supply behavior of single mothers. To this end, we estimate a structural microeconometric model of labor supply and welfare participation. The model accounts for heterogeneity in consumption-leisure preferences as well as for constraints in job opportunities. The results of the evaluation show that the reform generates welfare-gains for virtually every single mother, and moreover benefits low-income households. Finally, due to increased labor supply and decline in welfare participation we find that this reform is almost self-financing.

Immigrants and Welfare Programmes: Exploring the Interactions between Immigrant Characteristics, Immigrant Welfare Dependence and Welfare Policy

The primary purpose of this paper is to provide a review of the papers within the economics literature that have examined the questions of immigrant welfare use and the responsiveness of immigrants to the incentives created by welfare systems. While our focus is largely on papers looking at the European case, we also draw on studies from the United States, in particular on issues where the European literature is thin. One set of papers asks whether immigrants who are more likely to use welfare are attracted to more generous welfare states. The results from these papers are not clear-cut. Another set of papers asks if immigrants use welfare more intensively than natives and if they assimilate out of or into welfare participation. In most cases, the unadjusted data shows higher use of welfare by immigrants although for some countries, for example Germany, this difference can be explained by differences in characteristics. Yet another set of papers finds that the rate of welfare use by existing migrants can influence the welfare use of newly arrived co-nationals. We illustrate some of these issues by looking at immigrant welfare use in Ireland and the UK. Immigrants in the UK appear to use welfare more intensively than natives but the opposite appears to be the case in Ireland.

Governance and Participation in Local Welfare: The Case of the Italian Piani di Zona

Abstract This article analyses four cases of governance in Italian local welfare systems. Following Law 328/2000, the design and management of the social services system in Italy involve different public responsibility levels, mainly regional and municipal. In order to manage social policies, Italian municipalities have to join in new inter‐municipal groupings called ‘Piani di Zona’ (Area Plans). Moreover, the law provides for engaging in these Plans even local third‐sector organizations and citizens. The article attempts to highlight the implications of this complex system that is leading local authorities to open new governance arenas. We hereby present the results of a research project on two Piani di Zona in the Region of Lombardy (Northern Italy) and on two in the Region of Campania (Southern Italy), carried out by means of institutional analysis. We particularly focus on the dynamics of participation triggered by the Piani di Zona. Our hypothesis is that the role of public administration is a fundamental variable to understand the different ways of participating. In this sense, we discuss the dynamics of local governance by relaying them to four main questions: who participates in what, where and how?