Purpose: Under Temporary Assistance for Needy Families (TANF) families are subject to greater work requirements, and the severity of sanctions for noncompliance has increased. However, little research has focused on the impacts of welfare sanctions. Most of previous research on sanctions relied on cross-sectional survey data. To date, no longitudinal data has been collected specifically to examine the effects of sanctions over time. This paper examines the effects of sanction on welfare recipients' employment, level of earnings, and welfare participation over time. The paper also investigates whether the effects of sanctions vary according to the different levels of sanctions, the timing of sanctions, and the duration of sanctions.

Methods: I utilized a unique monthly administrative data on the timing and severity of sanctions, and outcomes of interests from 1997 to 2003 in Wisconsin. The sample included all participants (N=13,171) who entered tiers with cash benefits in Wisconsin during its first year of implementation, and were not working either in the quarter of entry or the first quarter after entry. Event history analysis was used to examine the effects of sanctions on economic well-being of TANF recipients, and document the sensitivity of results to alternative measures of sanctions over time. Using event history analysis allows me to determine the effect of longer welfare spell from higher probability of being sanctioned. These have different implications for policy and practices.

Results: Findings indicate that those who are currently sanctioned are at significantly increased risk of leaving welfare either without a job or with a lower-earning job. However, welfare participants with different levels of sanctions and different durations of sanction spells have different patterns of welfare exit and employment outcomes. Those who received a small sanction are significantly less likely to leave welfare regardless of post-welfare employment status. Full sanctions and longer spells of sanctions are associated with welfare exits to either no job or to a lower-earning job. The results also suggest lagged effects of sanctions on employment outcomes. Previous sanction experience appears to be an important component of transitions from welfare to work. Overall, sanctions increase the probability of finding lower-earning jobs but there is no significant sanction effect on the likelihood of finding higher-earning jobs in most specifications.

Implications: This study has potentially important implications for social work and public policy. It highlights the importance of the severity, timing, and duration of the effects of sanctions. It also highlights the importance of considering the needs of sanctioned families, especially hard-to-employ families and those who leave welfare without a job when implementing sanction policies.