One Step Forward, Two Steps Back: Preserving Economic Success Among Welfare Leavers

Background: Past research on welfare reform finds inconsistent earnings and high poverty rates among former participants. We know relatively little, however, about those who leave welfare and have some measure of economic success. This study explores factors that are associated with continued earnings growth among welfare leavers. We summarize the economic situation of the participants of the study and report on the reasons leavers believed they were, or were not, able to sustain economic well-being over time. We also identify resources, both formal and informal, participants believed were most crucial to their economic success or setbacks.

Methods: We began with a sample of all individuals who applied for services at one of the four largest (caseload) welfare agencies in Wisconsin in the fall of 2006 (N=1,683). Because we were interested in factors associated with economic success, we limited our sample to only those with at least a $5,000 increase in earnings in the year post-welfare relative to the year prior to applying for services (N=120). We randomly selected 40 individuals and interviewed 15 individuals. Respondents were asked a series of open-ended questions regarding their perspectives on what helped or hindered their economic status since leaving welfare, past and current employment, welfare program experience, sources of help and hardship, and information on sources of income and general demographic information.

Results: We find that economic well-being ebbs and flows over time even among welfare leavers with the most resources. Moreover, employment patterns for many of our respondents were tied to workplace issues such as discrimination, complications with disabilities, flexible managers and schedules, and complex life circumstances.

Conclusions & Implications: Sustained economic success is elusive even among many of the “most-able” respondents highlighting movement in and out of “self-sufficiency” among successful welfare leavers. While prior research in this area using administrative data has found inconsistent earnings over time, the qualitative nature of this study allows us to uncover potential explanations for difficulty in sustaining economic well-being for welfare participants.