Bridging Disciplinary Boundaries (January 11 - 14, 2007)

Purpose: Since the passage of Personal Responsibility and Work Opportunity Reconciliation Act (PRWORA) of 1996, welfare programs have aimed to move low-income women with children from welfare to work. Many studies have found that a majority of former welfare participants are employed, however many have low earnings and are unstable to sustain employment and to move out of poverty. Much of prior research examined employment and earnings patterns over fairly short period of time. Relatively little work has examined welfare participants' employment and earnings over longer periods. Moreover, very little is known about the dynamics of multiple program use and the relationship between public assistance use and long-term economic well-being. In this paper, we examine the following questions: (1) What are patterns of participations in cash benefits, food stamps, Medicaid, and child care subsidy and how do dynamics of multiple program use change over a six-year period? (2) What are trajectory patterns of long-term employment and earnings among TANF participants? (3) How do multiple program participations affect long-term employment and earnings of TANF recipients?

Methods: This study uses a detailed and unique administrative data and longitudinal survey data from Wisconsin. The sample includes all participants who entered Wisconsin's TANF program (W-2) during its first year of implementation (N=22,576). We follow each woman for six years after she entered W-2. Descriptive statistics and event history analysis are used to examine dynamics of multiple program participation, trajectory patterns of long-term employment and earnings, and the relationship between multiple program use and employment transitions and long-term economic success. We also document the sensitivity of results to alternative measures of economic success over time and to different entry cohorts.

Results: Findings indicate that receipt of cash payments declined dramatically over the six-year period but participation in Food Stamp program and Medicaid remained relatively high. Only a minority of the sample received a child care subsidy. Very few women received benefits for all these programs simultaneously over a long period but we found very high number of transitions on and off benefits during the six-year period.

We documented the long-term employment and earnings patterns and found substantial diversity in employment and earnings patterns. Some women made significant and stable improvement in the employment and earnings. In contrast, some women were not able to sustain their progress and had very low earnings or did not work at all. Moreover, our results highlight the important role of program participation in cash assistance, Food Stamp, Medicaid, child care subsidy, and multiple program use in long-term economic success.

Implications: Results will inform policymakers about the mechanism of economic success and diversity of pathways of employment and earnings patterns. Our results will also inform policymakers in understanding how use of multiple programs associated with long-term economic success. Policymakers may need to pay particular attention to the special needs of families who have left cash assistance but continue to need other supports.