These outcomes are perfectly consistently with a 1997 special report by the Council
of Economic Advisors on this issue.. That study reported that economic growth
accounted for 44 percent of the decline, while 31 percent of the decline derived
from changes in the law. An appendix to the report, however, admits that changes in
the law could account for as little as 13 percent. Hiliary Williamson Hoynes at
Berkeley has done some useful work on this issue. She concludes that a 10 percent
increase in employment growth combined with a 5 percent increase in real earnings
would lead to a 16 percent decline in the welfare caseload.
Joel Blau
Margaret Coleman wrote:
> A couple of comments on the excerpts Max sent us from the prez report....
> 1. Mathematica (a fairly conservative (imho) think tank/number crunching group)
> came and presented an unpublished paper to us census dweebs about a month ago.
> They compared the effect of the reduction of caseload under afdc (old cash
> benefits) and tanf (new cash benefits) rules during the recessionary late 80s
> and the expansion of the 90s. Their main conclusion was that the new rules
> explain less than 10% of the reduction in case load, while the expansionary
> economy explains about 40-50%. The rest is unknown.
> 2. I suspect that a huge portion of the non-collection of benefits like food
> stamps is due to a lack of information as states rush to reduce case load so
> they can keep the block grant monies to spend on 'other' items.
> 3. Mathematica and the Urban Institute have both sent people to the field in
> different states and the administration of new rules is tremendously at odds
> with the rules as written -- in short, no one actually has any real clue at all
> as to how many people are eligible, how many people are collecting, and what has
> happened to leavers.
> 4,,,,, factoids: There is a provision in prowra (new rules) which gives
> additional block grant money to the states which reduce unwed births the most
> WITHOUT use of abortion (perhaps an aspirin held tightly between the knees?).
> Personally, I read this as an incentive to discourage legal abortions. AND in a
> study about school enrollment (which I am authoring, though it is not 'official'
> yet), using the survey of income and program participation (SIPP), there has
> been a small, but clear increase in the number of people not receiving benefits
> but living at the lowest end of the income spectrum between March, 1996 and
> March, 1998. maggie coleman
>
> Max Sawicky wrote:
>
> > "Two of the most impressive achievements of the past 8 years have been the
> > reduction in the number of Americans receiving welfare, and the increase in
> > the numbers of current and former welfare recipients who are working. . .
> >
> > . . . The 1996 reforms have undeniably been successful in reducing the
> > number of people receiving welfare. But reductions in caseloads are not the
> > only measure by which to judge the reforms: the well-being of the millions
> > of former welfare recipients is at least as important. Much of what we know
> > about outcomes for welfare leavers comes from studies undertaken in
> > individual States. . . .
> >
> > . . . Welfare leavers are unlikely to thrive in the workplace if they are no
> > better off financially than they were before leaving the welfare rolls.
> > Evidence from State studies indicates that, at least initially, few leavers
> > are significantly better off. . .
> >
> > . . . For 44 percent of leavers, household income plus food stamps in the
> > year following exit was more than $50 per month higher than in the months
> > before; for 49 percent it was at least $50 lower. . . . "
> >
> > . . . Enrollment in the food stamp program has fallen dramatically since
> > 1994, from a high of 27.5 million participants to 18.2 million in 1999, in
> > part because of the strong economy. Of concern, however, is the fact that
> > the participation rate for eligible families declined from 71 percent in
> > September 1994 to 62 percent in September 1997. This decline is particularly
> > marked for families with children. In 1999 only 51 percent of children in
> > families with incomes below the poverty line received food stamps. Even
> > among the very poorest children�those in families with incomes less than 50
> > percent of the poverty line�data indicate that only 58 percent received food
> > stamps in 1999, down from 76 percent in 1993. . . .
> >
> > Chapter 5, Economic Report of the President, 2001
> >
> > [note: a "leaver" is someone who joins the caseload of Temporary Assistance
> > for Needy Families (formerly AFDC) and separates from the program, either
> > voluntarily or otherwise. It does not include those who never enter the
> > program, who might have under other circumstances.]
