And yet, because height is a measure of health that expresses itself cumulatively over time, it was possible that stunting would start to be reversed only after continued assistance from the program. That was precisely what happened. We found similar effects with respect to education.
At the two-year mark, PKH had increased school enrollment for children aged , but not for those aged At the time, we reasoned that older children who had dropped out prior to the program would have a harder time returning to school than would their younger counterparts, even if their family resources had recently improved.
But we suspected that if families could benefit from sustained access to the program, their kids would not drop out at an earlier age, with enrollment among those in the age bracket thus improving over time. Again, this turned out to be the case. The importance of these improvements in health and education can hardly be overstated. Leaving aside the obvious moral arguments for guaranteeing children access to nutrition and schooling, these investments in low-income households will likely translate into far-reaching economic benefits, including increased labor-market participation and productivity.
And that, in turn, could lead to reduced participation in social programs themselves. More to the point, these gains were made possible by a cumulative investment in children over the course of six years. Most likely, these results would not have been achieved under a program providing temporary or sporadic benefits.
In the case of PKH, children who grow up healthier and more educated will arguably be better positioned to earn higher incomes and work longer into the future.
Of course, to confirm this empirically, we would need to follow the original sample population into adulthood as they enter the workforce and develop careers. In the meantime, critics will doubtless argue that the program creates dependency for able-bodied adults today. Yet here it is worth taking a step back and exploring where the idea of welfare dependency comes from in the first place. We know that beliefs about dependency, laziness, and voluntary unemployment among the poor are pervasive.
The importance of these improvements in health and education can hardly be overstated. Leaving aside the obvious moral arguments for guaranteeing children access to nutrition and schooling, these investments in low-income households will likely translate into far-reaching economic benefits, including increased labor-market participation and productivity.
And that, in turn, could lead to reduced participation in social programs themselves. More to the point, these gains were made possible by a cumulative investment in children over the course of six years. Most likely, these results would not have been achieved under a program providing temporary or sporadic benefits. In the case of PKH, children who grow up healthier and more educated will arguably be better positioned to earn higher incomes and work longer into the future.
Of course, to confirm this empirically, we would need to follow the original sample population into adulthood as they enter the workforce and develop careers.
In the meantime, critics will doubtless argue that the program creates dependency for able-bodied adults today. Yet here it is worth taking a step back and exploring where the idea of welfare dependency comes from in the first place.
We know that beliefs about dependency, laziness, and voluntary unemployment among the poor are pervasive. But why is that? Similarly, if recipient worry about losing eligibility for benefits if they earn more, they may abstain from work. It is this moral hazard that supposedly leads people to remain poor and rely on welfare indefinitely. But the evidence does not always support this theory. In another study , my colleagues and I re-analyzed data from seven different experimental trials of government cash-transfer programs throughout the developing world, from the Philippines to Morocco to Mexico.
We found that in most cases, men who received benefits tended to be working already, and that there was no evidence that systematic income support reduced work. As for PKH, we did not find that program recipients stopped working, even after six years of receiving cash transfers.
To be sure, some social programs might well reduce work. Obviously, policymakers should consider the downstream effects of public benefits on labor markets and other areas of the economy. The claim that transfers necessarily reduce work may hold true in Economics ; in the real world, much depends on context and how policies are designed and implemented in practice.
There is an extensive and growing body of evidence from around the world showing that even very simple cash-transfer programs need not have adverse effects on work. As we have seen, the returns on such investments are real, and will accumulate over time. At least on average, this has not occurred. The fact that 60 to 75 percent of welfare leavers found employment is especially remarkable given that, over the decade prior to reform, the employment rate of mothers while they were on AFDC was never more than 9 percent.
Equally notable in this light is the fact that almost 30 percent of women currently on the rolls are now employed. The 60 percent employment rate of welfare leavers is not much different than that of women who left the AFDC program prior to welfare reform. Employment rates over the period to ranged from 48 percent to 65 percent, varying by the state of the economy and the area of the country.
These rates are similar to the rates following reform. This is surprising because many more women have left the welfare rolls in this era of reform than in any prior period, and many of those who left recently are more disadvantaged than women who left the rolls in prior periods.
The fact that employment rates of leavers have not been lower than those experienced by past leavers further supports the strong effect of welfare reform. In addition, random assignment evaluations of pre reform programs which had time limits and work requirements and were reasonably close in character to the post programs put in place by the states also show positive effects on employment and earnings.
The employment and earnings gains in these demonstration programs are the average gains for both women who have left welfare as well as women who stayed on the rolls, and they therefore represent a more comprehensive measure than studies of leavers alone. Two of the most important reforms in the legislation were the imposition of federal time limits on the length of welfare receipt, and the use of more stringent sanctions for not complying with work requirements and other rules.
A natural question is how women who hit a time limit or were sanctioned have fared relative to women who left welfare voluntarily or because of different inducements. Time limits have had relatively little effect so far because most states have retained the five-year federal maximum and, as a result large numbers of recipients did not begin to hit time limits until the late fall of Some states do have shorter time limits than five years, but they have exempted large numbers of families from those limits and have granted large numbers of extensions.
These exemptions and extensions have typically been granted to the most disadvantaged families, so that it is primarily those with significant employment and earnings while on TANF who hit the time limit in these few states. As a consequence, in the one or two states where significant numbers of families have left welfare because they hit a time limit, post-welfare employment rates of those leavers are quite high e.
But in other states where fewer families have hit the limit, employment rates of time-limited leavers are no different than those of other leavers. More is known about sanctions because they have been in force for most of the time since and in some cases even before then. Many more women have been sanctioned than have been hit by time limits.
The studies of women who have left welfare because of sanctions show that such women are less likely to have jobs than other welfare leavers. This appears to be because sanctioned welfare recipients tend to be less educated, have lower job skills, and are in poorer health than other welfare recipients. Unfortunately, these findings suggest that sanctioning may often occur among women who are the most disadvantaged and have the greatest number of difficulties with work.
Despite the high employment levels of women who have left welfare, their incomes increase only modestly after leaving the rolls.
About half experience an increase in income immediately after leaving, with the other half experiencing a decline. After a year or two off the rolls, earnings gains slightly exceed the losses in TANF benefits. When EITC income is added in, the gains are slightly higher. However, the major change in income after leaving welfare comes from increased income from other family members very little from boyfriends and other unrelated persons, however.
Such income is a larger component of total household income than either the earnings of the leaver herself or TANF and food stamp income. As a result of additional income from this source, total household income grows by about 20 percent after two years off the rolls. Income from other household members is thus a key ingredient to sustaining the incomes of women leaving welfare. Random assignment demonstrations measuring the effects of several pre state welfare reform plans provide additional evidence of the impact of welfare reform on income.
For states whose plans most resembled those implemented after those with work requirements and time limits , income was essentially unchanged by the reforms three years after they began. However, neither the EITC nor the income of other family members was included in the income calculation, so it is probable that some income gains were in fact attained, possibly in the same 20 percent range found in other studies.
These demonstrations also show that, in the absence of earnings disregards, income is not likely to greatly increase for several reasons. These mothers used to simply stay on welfare where they were more or less invisible. Now that mothers are expected to leave welfare by finding a job, the problems of this seriously disadvantaged group are coming more clearly into view—as is the fact that not much is known about how to help them.
Congress will devote substantial attention to this problem and is likely to consider directing research funds at interventions designed to learn how adults with multiple barriers can be helped to hold jobs and become less dependent on welfare. Congress may also consider some loosening of the five-year time limit for families with multiple barriers to employment.
There are several reasons why so many children are growing up in poor, single parent families. The first is the continuing high rates of nonmarital births, including teen births.
A concern for this problem animated Republicans during the debate on the legislation and many provisions to address the problem were included in the law. Although all the measures of nonmarital births have leveled off for the first time in half a century, and the rate of birth among teens has dropped every year for nearly a decade, the levels are still among the highest in the industrial world.
Moreover, few states have made a concerted effort to develop policies to reduce nonmarital births. In fact, several researchers have reported that there is a reluctance among welfare caseworkers to broach issues of sex or marriage with clients. A related reason for the growth of poor single-parent families is that marriage has declined precipitously, especially in poor communities. In the past, both the federal government and the states have been reluctant to become deeply involved in promoting marriage, in part because of the fear of stigmatizing single parents.
However, recent years have seen some movement on this front. Oklahoma has established the promotion of marriage as a major goal of its TANF program and has formed a panel of researchers, practitioners, and advocates to advise the state about policies that can be adopted to promote marriage. In , both Houses of Congress passed legislation that would have reduced the marriage penalty on low-income families receiving the Earned Income Tax Credit EITC , a program that now provides cash assistance to over 19 million working families.
The th Congress will almost certainly return to legislation designed to promote marriage among poor families, and to reduce the marriage penalty in the EITC. Another reason for the growth of poor single parent families is deteriorating economic prospects among low-income fathers. As welfare reform and the strong economy lured millions of poor mothers into the workforce, many of the fathers of their children remained jobless. Indeed, Census Bureau data show that between and , as the economy boomed and the labor force participation of to year old black females increased from less than 65 percent to nearly 80 percent, the labor force participation of comparable black males actually declined from almost 85 percent to less than 80 percent.
By , young black females had a higher employment rate than young black males. Congress has already signaled its interest in this issue by nearly passing legislation in the last session that would have funded a national network of programs designed to promote marriage, better parenting, and employment among poor fathers.
Congress will undoubtedly return to this issue as part of the reauthorization debate. Two of the more controversial features of the law were the imposition of the five-year time limit on use of federal dollars to provide assistance to any adult and the mandatory use of financial sanctions against families that do not comply with program requirements.
Given the raucous debate surrounding both of these issues, it would be a surprise if Congress failed to revisit these issues during reauthorization and if Democrats did not introduce legislation to soften the five-year time limit and the use of financial sanctions against recipients. There are good studies on both of these issues.
Briefly, the research on time limits shows that most recipients leave the rolls before the time limit hits, even in cases in which the time limit is much less than 5 years.
Not surprisingly, one reviewer concluded that time limits have produced neither the strong positive effects expected by conservatives nor the strong negative effects predicted by liberals.
Even so, it is clear that a substantial number of families will hit the five-year time limit in and every year thereafter. States now have the flexibility to provide federally financed benefits beyond the five-year limit for up to 20 percent of their caseload and can use their own funds for families that have passed the time limit.
But whether this will be enough flexibility to help all the families that hit the time limit—assuming states want to continue providing these families with some benefits or services—is an open question. One policy reform that is bound to receive attention in the reauthorization debate is whether states should be allowed to stop the time-limit clock for recipients who are working some minimum number of hours per week—perhaps Research on sanctions shows that many states routinely use them.
In some states, as many as a third of the cases are under sanction or have received a sanction, and 35 states use full family sanctions, meaning they can end the entire cash welfare benefit of families that fail to meet requirements. Some research suggests that states use sanctions against families that do not understand why they are being sanctioned and that sanctions are sometimes applied inequitably. Congress will certainly want to examine these issues and some lawmakers are likely to support legislation that restricts the circumstances under which full family sanctions can be applied and that addresses issues such as adequate notice and due process rights.
One of the most widely studied and agreed upon problems associated with welfare reform is that a large number of families who are eligible for food stamps and Medicaid are not receiving these benefits.
Based on careful research in 12 states, for example, the Urban Institute found that many families leaving welfare are eligible for food stamps but are not receiving the benefit. Similarly, many investigators have shown that families and children are also not receiving the Medicaid coverage to which they are entitled.
The problem in both cases is not that changes in federal statutes during welfare reform rendered families and children ineligible for food stamp or Medicaid benefits. Rather, the problem appears to be that for some reason, families that are eligible under federal statutes do not participate. Under the old AFDC program, families that applied for welfare were automatically given food stamps and Medicaid. But under the TANF program, some applicants are diverted from the welfare program into work and never appear on the rolls, thereby missing out on food stamps and Medicaid.
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