Does state AFDC generosity affect child SSI participation?

This article examines the extent of interactions or spillovers between the Supplemental Security Income (SSI) and Aid to Families with Dependent Children (AFDC) programs for children. In the early 1990s, the Social Security Administration substantially relaxed child eligibility criteria for SSI benefits. Since the changes, the number of U.S. children receiving cash and medical benefits through SSI tripled to nearly 1 million. The article describes a family's decision to participate in SSI and/or AFDC, and uses state‐level data for three years before, and three years after, the Zebley decision to estimate the effect of state program generosity on child program participation. The expansions in child SSI eligibility increased child SSI participation and contributed to increased total program participation by children in the early 1990s. Child SSI participation increased more in states with lower AFDC payments and higher state SSI supplementation payments. These results suggest that families use SSI and AFDC as substitutes. At least 32 percent of the Zebley increase in SSI is likely attributable to the SSI–AFDC benefit gap for the median AFDC benefit state. © 2000 by the Association for Public Policy and Management.     

The interaction between single mothers' living arrangements and welfare participation

This article examines the interaction between single mothers' living arrangements and their welfare participation, taking into account the endogeneity embedded in the two decisions. Using data from the 1990 Survey of Income and Program Participation, I estimate a two‐stage instrumental variables model and simulate the effects of partial‐ and full‐family benefit reductions on both the distribution of living arrangements and the rate of welfare participation. Tabulations show that 62 percent of single mothers live independently, 16 percent live in the home of their parents, 12 percent cohabit with an unrelated man, and 11 percent share with others. Reductions in combined AFDC and food stamp benefits increase mothers' probability of living with their parents relative to living independently, cohabiting, or sharing with others. Benefit reductions also decrease the probability of welfare receipt. The resulting drop in the participation rate is even more pronounced once the simultaneous effect on the distribution of living arrangements is taken into account. The implication of these findings is that policies aimed at reducing welfare caseloads may have the unanticipated effect of shifting families' living arrangements, potentially confounding the impacts of policy changes in either positive or negative ways. © 2000 by the Association for Public Policy Analysis and Management.     

Transitions from AFDC to SSI before welfare reform

The Supplemental Security Income (SSI) and Aid to Families with Dependent Children (AFDC) programs serve populations with similar characteristics. SSI serves adults and children with disabilities who are in low-income families, and AFDC serves low-income families with children. Because of that overlap, policy changes in one program can affect the other. In 1996, Congress enacted the Personal Responsibility and Work Opportunity Reconciliation Act, which transformed AFDC into the Temporary Assistance for Needy Families (TANF) program. Many people have expected that implementing that welfare reform legislation would eventually increase SSI participation, for two reasons. First, TANF includes new work requirements and time limits that induce more AFDC/TANF recipients with disabilities to obtain SSI benefits. Second, the change in the funding mechanism--from open-ended funding on a matching basis for AFDC to cash assistance block grants for TANF--gives states a stronger incentive to shift welfare recipients to SSI. This article examines the interaction between the SSI and AFDC programs in the prereform period (1990 to 1996) and discusses the potential implications of welfare reform on that interaction. Using matched data from the Survey of Income and Program Participation and Social Security Administration (SSA) records, our analysis focuses on how the interaction of those programs affects young women (aged 18 to 40) and children (aged 0 to 17). We find a very strong link between AFDC and SSI for young women and children. Significant portions of young female and child SSI beneficiaries in the 1990-1993 period were in AFDC families or had received AFDC in the past. In addition, a substantial share of young women and children who received AFDC during that period eventually entered SSI. Because the SSI program is now serving a much larger population of families with young women and children than in the past, SSA might need to develop policies to better serve that group. The findings also suggest that the prereform period is a poor baseline against which to measure the impact of TANF, primarily because of the instability in programs and policies.     

Interstate Competition and Welfare Policy

In 1996, the federal government terminated the Aid to Familieswith Dependent Children (AFDC) program and replaced it withthe Temporary Assistance for Needy Families program (TANF).Many powers once held by the federal government are now beingused by state governments. Will welfare assistance be redesignedand expanded or will states "race to the bottom?" This issueis investigated by examining state welfare policy choices duringthe latter years of AFDC(1976–1994). Because each stateunder AFDC had the authority to set the level of its welfareguarantee for families that had no income, it is possible toestimate the effects of interstate competition on AFDC guaranteelevels. By estimating a spatial autocorrelation coefficientwhile controlling for theoretically relevant variables and statefixed effects, this study finds evidence that states are sensitiveto the welfare policies of their competitors.     

WELFARE TO WORK PROGRAMS: LESSONS ON RECENT STATE INITIATIVES

Since the federally supported public assistance program became law in 1935, many developments have challenged our perceptions about the employability of welfare mothers and the appropriate design of the AFDC program. A consensus has been building that the AFDC program should be redesigned with the view that employable women and men have a responsibility to work and support their families. The result has been proposals stressing some form of work requirement. Several years ago, the Manpower Demonstration Research Corporation (MDRC) began a five-year social experiment examining current state efforts to restructure the relationship between welfare and work. The MDRC demonstration addresses four questions. First, is it feasible to impose work-related obligations as a condition of reviewing welfare? Second, what do workfare-type programs look like in practice and how do welfare recipients themselves judge the fairness of mandatory requirements? Third, do these initiatives make a difference? Fourth, how do program benefits compare to costs? Issues, findings, and conclusions are related to these questions.     

How welfare reform affects young children: Experimental findings from Connecticut—A research note

As welfare‐to‐work reforms increase women's labor market attachment, the lives of their young children are likely to change. This note draws on a random‐assignment experiment in Connecticut to ask whether mothers' rising employment levels and program participation are associated with changes in young children's early learning and cognitive growth. Children of mothers who entered Connecticut's Jobs First program, an initiative with strict 21‐month time limits and work incentives, displayed moderate advantages in their early learning, compared with those in a control group. A number of potential mechanisms for this effect are explored, including maternal employment and income, home environment, and child care. Mothers in the new welfare program are more likely to be employed, have higher income, are less likely to be married, have more children's books in their home, and take their children to libraries and museums more frequently. However, these effects explain little of the observed gain in child outcomes. Other parenting practices and the home's social environment do explain early learning, but these remained unaffected by welfare reform. © 2003 by the Association for Public Policy Analysis and Management     

Constructing ‘active citizenship’: single mothers,welfare, and the logics of voluntarism

Across welfare states, rights-based conceptions of citizenship are losing ground to obligation-centred notions. Drawing on in-depth longitudinal interviews with lone mothers receiving income assistance in British Columbia during a period of significant welfare reform, we explore the mothers' practices and narratives of volunteer labour in relation to conceptions of ‘active citizenship’. Volunteer work and the narratives women construct about it emerge as key sites of struggle and tension over the meaning of motherhood, work, and social contribution.     

Incentives,challenges, and dilemmas of TANF: A case study

This paper compares the incentives inherent in TANF (Temporary Assistance for Needy Families), the U.S. welfare system in place after the 1996 reforms, with those of TANF's predecessor, AFDC (Aid to Families with Dependent Children), using the experience in one state, Wisconsin, as an example. Is the new program successful in avoiding the “poverty trap” of the old welfare system, in which the marginal tax rates imposed on earnings and benefits were so high that they discouraged work effort outside a narrow earnings range? As women receiving assistance begin working more hours and earning more, income‐conditioned benefits (Food Stamps, EITC, Medicaid, and subsidies for child care) are reduced and withdrawn, in effect constituting a “tax” on earnings. Under TANF, there is more support for these families, at least in Wisconsin, and so economic well‐being should be higher for most women with earning in this range than it was under AFDC. But marginal tax rates under TANF remain high, and in some income ranges they are higher than under AFDC. Once in the work force, former TANF recipients have earnings over the long run that expose them to very high marginal tax rates, which decrease the benefits of working harder and make it very difficult to gain full eonomic independence. Evidence from other sources suggest that most low‐skilled women have earnings in the same range and so are likely to face similar reductions in benefits such as child care subsidies or the EITC as their earnings increase, even if they are not receiving welfare‐related benefits. © 2002 by the Association for Public Policy Analysis and Management.     

The effect of incremental benefit levels on births to AFDC recipients

We examine the relationship between fertility and incremental AFDC benefits using the 1990 Panel of the Survey of Income and Program Participation (SIPP). Estimating a logit equation for the probability of a higher-order birth among a sample of AFDC recipients, we find a positive coefficient (although statistically insignificant) on the incremental AFDC benefit level. However, we find a positive correlation between incremental benefits and fertility for several nonrecipient comparison groups which is larger than the positive correlation for AFDC recipients. This finding suggests that the previously estimated relationship between incremental benefits and fertility among AFDC recipients is largely the result of a spurious correlation. We find similar results among whites, blacks, and never-married women, but less consistent results among Hispanics and divorced or separated women. We infer from these results that family cap policies, which eliminate the incremental benefits entitled to AFDC recipients who have additional children, are not likely to result in a large reduction in the number of out-of-wedlock births to AFDC recipients.     

The TANF/SSI connection

Interactions and overlap of social assistance programs across clients interest policymakers because such interactions affect both the clients' well-being and the programs' efficiency. This article investigates the connections between Supplemental Security Income (SSI) and Temporary Assistance for Needy Families (TANF) and TANF's predecessor, the Aid to Families with Dependent Children (AFDC) program. Connections between receipt of TANF and SSI are widely discussed in both disability policy and poverty research literatures because many families receiving TANF report disabilities. For both states and the individuals involved, it is generally financially advantageous for adults and children with disabilities to transfer from TANF to SSI. States gain because the federal government pays for the SSI benefit, and states can then use the TANF savings for other purposes. The families gain because the SSI benefits they acquire are greater than the TANF benefits they lose. The payoff to states from transferring welfare recipients to SSI was substantially increased when Congress replaced AFDC with TANF in 1996. States retained less than half of any savings achieved through such transfers under AFDC, but they retain all of the savings under TANF. Also, the work participation requirements under TANF have obligated states to address the work support needs of adults with disabilities who remain in TANF, and states can avoid these costs if adults have disabilities that satisfy SSI eligibility requirements. The incentive for TANF recipients to apply for SSI has increased over time as inflation has caused real TANF benefits to fall relative to payments received by SSI recipients. Trends in the financial incentives for transfer to SSI have not been studied in detail, and reliable general data on the extent of the interaction between TANF and SSI are scarce. In addition, some estimates of the prevalence of TANF receipt among SSI awardees are flawed because they fail to include adults receiving benefits in TANF-related Separate State Programs (SSPs). SSPs are assistance programs that are administered by TANF agencies but are paid for wholly from state funds. When the programs are conducted in a manner consistent with federal regulations, the money states spend on SSPs counts toward federal maintenance-of-effort (MOE) requirements, under which states must sustain a certain level of contribution to the costs of TANF and approved related activities. SSPs are used for a variety of purposes, including support of families who are in the process of applying for SSI. Until very recently, families receiving cash benefits through SSPs were not subject to TANF's work participation requirements. This article contributes to analysis of the interaction between TANF and SSI by evaluating the financial consequences of TANF-to-SSI transfer and developing new estimates of both the prevalence of receipt of SSI benefits among families receiving cash assistance from TANF and the proportion of new SSI awards that go to adults and children residing in families receiving TANF or TANF-related benefits in SSPs. Using data from the Urban Institute's Welfare Rules Database, we find that by 2003 an SSI award for a child in a three-person family dependent on TANF increased family income by 103.5 percent on average across states; an award to the adult in such a family increased income by 115.4 percent. The gain from both child and adult transfers increased by about 6 percent between 1996 (the eve of the welfare reform that produced TANF) and 2003. Using data from the Department of Health and Human Services' TANF/SSP Recipient Family Characteristics Survey, we estimate that 16 percent of families receiving TANF/SSP support in federal fiscal year 2003 included an adult or child SSI recipient. This proportion has increased slightly since fiscal year 2000. The Social Security Administration's current procedures for tabulating characteristics of new SSI awardees do not recognize SSP receipt as TANF We use differences in reported TANF-to-SSI flows between states with and without Separate State Programs to estimate the understatement of the prevalence of TANF-related SSI awards in states with SSPs. The results indicate that the absolute number of awards to AFDC (and subsequently) TANF/SSP recipients has declined by 42 percent for children and 25 percent for adults since the early 1990s. This result is a product of the decline in welfare caseloads. However, the monthly incidence of such awards has gone up-from less than 1 per 1,000 child recipients in calendar years 1991-1993 to 1.3 per 1,000 in 2001-2003 and, for adult recipients, from 1.6 per 1,000 in 1991-1993 to 4 per 1,000 in 2001-2003. From these results we conclude that a significant proportion of each year's SSI awards to disabled nonelderly people go to TANF/SSP recipients, and many families that receive TANF/SSP support include adults, children, or both who receive SSI. Given the Social Security Administration's efforts to improve eligibility assessment for applicants, to ensure timely access to SSI benefits for those who qualify, and to improve prospects for eventual employment of the disabled, there is definitely a basis for working with TANF authorities both nationally and locally on service coordination and on smoothing the process of SSI eligibility assessment. The Deficit Reduction Act of 2005 reauthorized TANF through fiscal year 2010, but with some rules changes that are important in light of the analysis presented in this article. The new law substantially increases effective federal requirements for work participation by adult TANF recipients and mandates that adults in Separate State Programs be included in participation requirements beginning in fiscal year 2007. Thus SSPs will no longer provide a means for exempting from work requirements families that are in the process of applying for SSI, and the increased emphasis on work participation could result in more SSI applications from adult TANF recipients.     

Maternal employment and teenage childbearing: Evidence from the PSID

Over the last 30 years, the tenet of promoting self‐sufficiency through work has become one of the primary objectives of many social welfare policies in the United States. Using the Panel Study of Income Dynamics, the author asks if a mother's work hours influence her daughter's teenage fertility. The findings suggest a negative relationship, with the largest effects for the daughters of mothers who work more than 1,000 hours per year. Results among AFDC recipients suggest that an increase in a mother's work hours from zero to 20 hours per week reduces her daughter's probability of a teen birth by 33 percent. © 2005 by the Association for Public Policy Analysis and Management.     

Determinants of initial entry onto welfare by young women

Using data from the youngest cohorts of women in the National Longitudinal Survey of Youth, this study constructs Aid to Families with Dependent Children (AFDC) histories starting at age 15. Most young women go on AFDC for the first time between ages 18 and 25 and do so in the first few years after the birth of their first baby. These histories are used to estimate models of the determinants of initial use of AFDC. The models provide mixed evidence that the financial or other incentives of welfare policy affect the likelihood and timing of AFDC use. Benefit levels do not seem to affect participation, but the presence of a program for medically needy families who are not on welfare appears to decrease entrance to welfare for some groups. Parental poverty, family structure, academic achievement, attitudes toward school, and race are significantly related to the likelihood of participating in AFDC, and the rate of entry. © 2000 by the Association for Public Policy Analysis and Management.     

The effect of disabilities on exits from AFDC.

The Personal Responsibility and Work Opportunity Reconciliation Act (PRWORA) of 1996 replaces AFDC, the largest means-tested cast assistance program for low-income families, with the Temporary Assistance for Needy Families (TANF) block grant. Unlike AFDC, assistance under TANF is limited to five years in a lifetime, and states are required to move families from the assistance rolls into jobs. But not all adult welfare recipients can easily move to work because either they themselves are disabled or they have a child with disabilities requiring special care. This article examines the extent and impact of disability among families on AFDC to gain insight into the potential impact of changes under TANF. Using data from the 1990 Survey of Income and Program Participation (SIPP), we find that in nearly 30 percent of the families on AFDC either the mother or child has a disability. Furthermore, we find that having a disability significantly lowers the probability that a woman leaves AFDC for work but not for other reasons, such as a change in living arrangements. Finally, we find little evidence that having a child with a disability affects the probability of leaving AFDC for any reason.     

The new supplemental security income—Implications for other benefit programs

Supplemental Security Income (SSI), a federal assistance program for the needy aged, blind and disabled, replaced the old federal-state welfare programs in January 1974. The enactment of this income floor, following a decade of revolutionary growth in aid to these three groups, may precipitate further program reform. First, the VA pension program aiding a beneficiary group similar to that of SSI, could be merged with SSI into a single federal program. Second, SSI may mark a turning point in the development of the social security system. A federally-administered income floor for the poor who are elderly or disabled can relieve social security of the welfare elements built into that system in an earlier period, allowing its original function of wage-replacement to be improved. A reorientation of social security vis-à-vis SSI would also allow a more equitable treatment of persons covered under one or both programs.     

State strategies for welfare reform: The Wisconsin story

Wisconsin is commonly cited as exemplar of the capability of states for reforming welfare. Wisconsin's welfare and caseload declined 22.5 percent between 1986 and 1994. I argue that the decline resulted from restriction of eligibility and benefits, a strong state economy, and large expenditures on welfare-to-work programs encouraged by an exceptional fiscal bargain with the federal government. Continued reduction of welfare utilization by means other than denying access are jeopardized by proposed changes in federal cost-sharing, a prospective state deficit, and the growing share of the caseload accounted for by residents of Milwaukee. Wisconsin Works, the state's plan for public assistance in a post-block grant world, continues benefit reduction and eligibility restriction but expands emphasis on employment. The special circumstances enjoyed by Wisconsin are unlikely to be duplicated elsewhere.     

An empirical investigation of interstate AFDC benefit competition

Claims that states which offer generous welfare benefits attract the poor and that some states pay low benefits intending to drive the poor away are neither uncommon nor entirely unfounded. This paper employs a two player (state) generalized game to model states' choice of a benefit level in the Aid to Families with Dependent Children (AFDC) program. Migration by the poor in response to interstate differentials in earnings and welfare opportunities, and the subsequent changes in AFDC caseloads, drive this game. Estimation of the model (using 1979 data) suggests that states within approximately 750 miles of each other do engage in a benefit-setting game. The rival's initial number of poor and preference for non-AFDC consumption appear to be the more influential rival characteristics. These findings, while derived from a different methodological approach, are consistent with previous studies which indicate that welfare recipients tend to move toward higher benefit states. Such migration may impede the efficient spatial allocation of labor. The results also indicate that states will tend to offer lower benefits given recipient migration than would be the case otherwise. State jurisdiction over benefits consequently leads to underprovision of AFDC. Federalization of the AFDC program would improve efficiency in terms of the spatial allocation of labor and the provision of AFDC.     

Symposium Introduction: Anthony Atkinson's ‘The Case for a Participation Income’

This article introduces the published proceedings of a symposium into Anthony Atkinson's proposal for a participation income. Just one of his many intellectual contributions, Atkinson famously argued for a scheme that gave up on the ambition of an unconditional scheme in order to press the case for a universal and non‐means tested income support scheme. The 'participation requirement' was a response to criticisms of basic income based on the absence of reciprocity. The contributions represent a range of responses and includes critics of participation income as well as those who are sympathetic to the goal of a participation income. All of them demonstrate the continuing relevance of Atkinson's proposal to ongoing debates on the reform of the welfare state.     

Nationally poor,locally rich: Income and local context in the 2016 presidential election

When social scientists examine relationships between income and voting decisions, their measures implicitly compare people to others in the national economic distribution. Yet an absolute income level (e.g., $57,617 per year, the 2016 national median) does not have the same meaning in Clay County, Georgia, where the 2016 median income was $22,100, as it does in Old Greenwich, Connecticut, where the median income was $224,000. We address this limitation by incorporating a measure of one's place in her ZIP code's income distribution. We apply this approach to the question of the relationship between income and whites' voting decisions in the 2016 presidential election, and test for generalizability in elections since 2000. The results show that Trump's support was concentrated among nationally poor whites but also among locally affluent whites, complicating claims about the role of income in that election. This pattern suggests that social scientists would do well to conceive of income in relative terms: relative to one's neighbors.     

A research context for welfare reform

Responsibility for the social safety net continues to “devolve” from the federal to state governments, and many states are now confronting the dilemmas inherent in redesigning welfare—dilemmas that faced Congress, too, as it sought to impose new conditions on receipt of public assistance. This article argues that reforming AFDC is difficult because the public has conflicting goals: putting welfare recipients to work; protecting their children from severe poverty; and controlling costs. For 25 years, reformers have viewed requiring welfare recipients to participate in work-promoting programs as uniquely able to balance these goals. Numerous studies have shown that this approach modestly increased employment and reduced welfare costs. More substantial gains have been achieved by some “mixed-strategy” programs, which stress immediate job entry for some recipients and employment-directed education or training for others. Many people remain on the rolls, however, prompting some policymakers to argue for substituting work-for-benefits or community service work (“workfare”) for welfare after a certain period of time, and others for ending all support. The limited knowledge about work-for-benefits programs suggests that, in contrast to work-promoting activities, this approach ultimately costs money. The research record confirms that there are no easy answers in welfare reform, and that states will have to weigh the trade-offs in considering alternative strategies.