Families on TANF in Illinois: Employment Assets and Liabilities
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In the six years since the passage of the Personal Responsibility and Work Opportunity Reconciliation Act of 1996, the dramatic decline in state welfare caseloads has drawn considerable attention from policymakers, program administrators, and researchers alike. Numerous studies have focused on understanding the characteristics and circumstances of families that have left TANF. Yet, many families are still on public assistance despite PRWORA's strong work requirements, its 60-month lifetime limit on the receipt of assistance, and the strong economy of the late 1990s. In this chapter, we summarize our key findings on the characteristics and circumstances of single-parent families currently on TANF in Illinois and discuss the relevance of the findings to TANF policy and administration.
Most single-parent TANF cases in Illinois are not long-term recipients of assistance. Nationally, close to half of all TANF cases have received assistance continuously for two or more years. But in Illinois, only 39 percent of TANF cases have continuously received assistance for that long. The median duration of the current welfare spell is 16 months. The relatively short time on welfare may be attributable to the state's particular combination of incentives and penalties that encourage work and self-sufficiency.
To promote work, Illinois provides a 67 percent earned-income disregard and stops the 60-month TANF clock for single-parent cases in which heads are working 30 or more hours per week. This means that a single-parent TANF case head with two children can earn up to $1,100 per month before she is ineligible for a cash grant. It also means that a case head who has received cash assistance for 36 months, for example, but has worked 30 hours per week for 20 of those months, would log not 36 but 16 months on her TANF benefits clock. As a result, most cases have no more than 24 elapsed months on their TANF clocks, and only 3 percent are at risk of reaching the 60-month lifetime limit on assistance within one year. In addition to these incentives to work, Illinois penalizes noncompliance with program requirements, including the work requirement. One-quarter of all single-parent TANF cases are under a sanction, and 9 percent of these cases are under a full-grant sanction.
Two out of every five TANF recipients are currently working for pay, but they do not work enough hours, earn sufficiently high wages, or remain in jobs long enough to achieve self-sufficiency. Compared with former TANF recipients across the nation, a smaller percentage of current TANF recipients in Illinois work full time, and their median rate of pay of $6.50 per hour is about 10 percent lower. About half of all recipients who held a job at any time worked in their most recent position for only five months or less. Only 6 percent of these jobs have the characteristics that are likely to lead to greater self-sufficiency in that they pay over $8.00 per hour, are not temporary or seasonal, involve daytime hours, and make paid leave (vacation and/or holidays) and health insurance available to qualified employees.
Notwithstanding the incentives for employment, the heads of many single-parent TANF cases in Illinois have limited attachment to the labor market. Three-fifths of them are not currently employed. One-fifth have not been employed during the past year, and three percent have never been employed.
The heads of single-parent TANF cases in Illinois have relatively weak educational backgrounds, but most bring other human capital assets to the labor market. Slightly more than half of these individuals have a high school diploma or a GED, compared to about three-fourths of TANF case heads in Michigan and Nebraska. However, about three in every four case heads in Illinois have made an effort during the past year to increase their human capital by participating in an employment-focused education or training program. About three-fourths of Illinois TANF case heads also have worked for pay during the past two years and are familiar with at least four common job tasks such as talking with customers in person or by telephone, doing arithmetic, or filling out forms. Some case heads have very substantial recent work experience: nearly half of them have been employed in at least four of the last eight calendar quarters.
Despite their assets, TANF recipients face a number of personal liabilities for employment, the most prevalent being poor physical and mental health. One-fifth of the heads of single-parent TANF cases in Illinois have a physical health problem, and one-quarter have a mental health problem. These rates are similar to those documented in studies of current and former TANF recipients in other states. Lower proportions of case heads have a history of multiple arrests (16 percent), have experienced severe domestic violence in the past year (13 percent), or are at risk for a learning disability (12 percent). And only a very small proportion is chemically dependent (3 percent) or has a language difficulty (2 percent).
Logistical and situational liabilities for employment are more prevalent than personal liabilities. The single most prevalent liability of this type is neighborhood problems. Over half (55 percent) of TANF recipients believe that their neighborhood is home to a serious problem related to crime, drugs, unemployment, or poor housing. One-fifth to one-third of recipients have each of the other logistical and situational liabilities measured in the study. These include an unstable housing situation characterized by multiple moves or an eviction in the past year. Despite the extensive public transit system in Cook County, where most Illinois TANF recipients live, it is not unusual for them to encounter transportation problems that interfere with their ability to work or participate in work-related activities. The situational liability with the lowest incidence is discrimination by a potential employer on the basis of race, gender, appearance, or welfare receipt. However, a full 20 percent of case heads who have ever worked for pay believe that a potential employer discriminated against them during the past year.
Family circumstances can also constitute logistical and situational liabilities for employment. About one-third of TANF case heads care for a family member or friend with a health or behavioral problem or a special need. Providing this care may limit the head's availability for work. Approximately the same proportion of heads is either pregnant or caring for an infant in her household, both of which may influence a parent's job performance and decisions about employment as well as an employer's decisions about hiring. Among single-parent case heads, one-third have had child-care problems during the past year that have interfered with their ability to participate in work or training.
Multiple liabilities for employment are extremely common among the heads of single-parent TANF cases in Illinois. Only 4 percent of case heads have none of the liabilities for employment measured in the study, and 12 percent have just one. On average, TANF case heads have 3.6 liabilities for employment, and those who are not substantially employed (not working 30 or more hours per week) are much more likely to have multiple liabilities than are those who are substantially employed. Among those not substantially employed, the presence of multiple human capital and multiple logistical and situational liabilities is more pronounced than the presence of multiple personal liabilities.(1)
Findings from multivariate analyses indicate that few individual liabilities alone actually affect the likelihood that the head of a single-parent TANF case will be substantially employed when background characteristics and the presence of other liabilities are held constant. Rather, the presence of multiple liabilities decreases the probability that a case head will work 30 or more hours per week. Only 4 of the 16 individual liabilities examined in the study have a significant negative association with employment. Limited recent work experience, a physical health problem, multiple arrests, or a child care problem significantly reduce the likelihood of substantial employment. Consistent with studies of current and former TANF recipients, we found that as the number of liabilities increases, the probability of working decreases. TANF recipients without any liabilities have a 58 percent likelihood of working 30 or more hours per week. The probability drops to 35 percent for those with one liability, 33 percent for those with two or three liabilities, 23 percent for those with four to six liabilities, and to just 7 percent for those with seven or more liabilities.
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Illinois' efforts to promote employment among recipients have yielded some success; two out of every five heads of single-parent TANF cases in the state are working for pay. However, few of these individuals hold jobs with convenient hours, wages over $8.00 per hour, and fringe benefits. Recipients who do hold such jobs have longer terms of employment, on average, than recipients with other jobs. They are also more likely to believe that their jobs provide opportunities for advancement.
These findings suggest that increased efforts to improve the quality of the jobs secured by TANF recipients could improve job retention and advancement as well as place recipients on a more certain path to long-term self-sufficiency. This is a difficult task under even the best economic conditions.
Illinois stops the 60-month TANF clock while recipients comply with program work requirements by working 30 or more hours per week or maintaining a 2.5 grade point average in a full-time postsecondary education program. Although this strategy has been advocated elsewhere by some researchers and policymakers, others believe that it might undermine the temporary nature of cash assistance as mandated by PRWORA. However, the proportion of long-term TANF recipients is lower in Illinois than it is nationwide, suggesting that stopping the clock can promote work without prolonging cash assistance.
In Illinois, the stop-the-clock policy rewards those who are meeting the full work requirement of 30 hours per week. Stopping the clock for compliance with broader program requirements--such as looking for work or participating in other work-related activities--is an option that could benefit those trying to build connections with the labor market and those at greatest risk of reaching the 60-month lifetime limit.
In 2002, the federally mandated work participation rate was that 50 percent of the heads of single-parent TANF cases must work or participate in work-related activities for at least 30 hours per week. Today's policy debate on welfare reform centers on increasing the number of required weekly work hours, decreasing the types of activities that can be defined as "work," and increasing the proportion of families on the caseload that are working. Yet, even in Illinois, which has one of the nation's strongest work-incentive packages, only 30 percent of the heads of single-parent cases are working at least 30 hours per week.
The state's experience to date suggests that a narrowing of the definition of work and work-related activities would require states to adopt even more innovative strategies for moving recipients into work. However, the TANF caseload, at least in Illinois, is heterogeneous, and each case head brings a different set of liabilities to the labor market. Our evidence suggests that a strategy that focuses on just one or two liabilities would do little to raise the probability of substantial employment (30 or more hours per week) for the caseload as a whole. In addition, the policy simulations based on our multivariate analyses suggest that the most promising approaches are those that would address sets of multiple related liabilities. Our simulations suggest that, in Illinois, a strategy that would increase work experience while reducing the logistical challenges of child care and transportation would have the greatest impact on employment rates.
A strategy that focuses on the acquisition of work experience might include work experience or transitional job programs. Evidence on the effectiveness of work experience programs is mixed and suggests that the programs often do not meet the needs of individuals who face multiple liabilities for employment. Transitional job programs more closely mirror the working world by providing a paycheck while meeting the needs of hard-to-employ recipients through enhanced case management and job coaching. An advantage of both of these types of programs is that they can increase work participation rates among TANF recipients in the short term while giving them the work experience and skills development they need to find unsubsidized jobs in the long term. One disadvantage of transitional job programs is that they can be costly.
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In the coming months, additional studies of current TANF recipients in California, Colorado, Maryland, Missouri, South Carolina, and the District of Columbia will be released. These forthcoming studies, along with this study of TANF recipients in Illinois, are based on a common survey instrument. The data will therefore provide a unique opportunity to examine how the characteristics and employment assets and liabilities of current TANF recipients compare across the states.
In addition to this work, it would be useful to conduct a longitudinal study of new TANF entrants, who constituted a small share of our study population simply because of the study design and the dynamic nature of the TANF caseload. A longitudinal study of new TANF entrants would provide insight into the characteristics and needs of families as they come onto and continue to receive assistance. Ideally, such a study would include two surveys of household heads--one shortly after they begin receiving TANF and another several years later. A multivariate analysis of employment outcomes similar to that presented in Chapter IV of this report could identify the types of entrants who are at greatest risk for failing to achieve substantial employment. It could also identify the interventions that are most strongly associated with their success in the labor market. Targeting policy interventions to the new entrants most at-risk could reduce the proportion of TANF cases that reach time limits or become long-term recipients.
This study also suggests a need for a more extensive qualitative study of TANF recipients as the means to developing a deeper understanding of the factors that influence employment. While this study shows that current TANF recipients have many liabilities for employment, only a few exert a significant influence on a recipient's employment status. Research that delves further into recipients' experiences could identify not only the factors not captured in our survey that may influence the ability to find and maintain employment but also how multiple liabilities might interact to constrain the ability to work. Because the survey of TANF recipients in Illinois captured information on the most commonly cited liabilities to employment, it would be important for the suggested study to use innovative interviewing and case study techniques to identify the additional factors that might influence TANF recipients' employment status. For example, such an approach may be able to examine problem solving skills and functional capacity in order to assess the ease with which a person is able to carry out tasks of daily life.
This study was not designed to identify the effectiveness of various strategies for increasing employment among recipients deemed "hard to employ." However, obtaining such information should be part of the future research agenda on how to help more TANF recipients make the transition to employment. In the coming years, two studies funded by the U.S. Department of Health and Human Services will increase our knowledge about the effectiveness of various strategies to help TANF recipients find and maintain employment. The Employment Retention and Advancement Evaluation is examining the effectiveness of various strategies designed to help current and former TANF recipients stay employed and advance to better jobs. The Enhanced Services for the Hard-to-Employ Evaluation is examining the effectiveness of various strategies designed to help TANF recipients who face employment liabilities make the transition to employment.
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This study has assessed the job readiness of the heads of single-parent families currently on TANF in Illinois by documenting the prevalence of specific labor market assets and liabilities and by analyzing their effects on employment. The study contributes to a small but growing body of research on current TANF recipients. The findings from this study and from other studies in progress should provide valuable information to policymakers and program administrators as they make welfare policy decisions and develop program strategies to improve employment outcomes for TANF recipients.
1. For the purpose of analyzing effects on employment, we broadened the definition of liabilities to include the absence of human capital assets. So, for example, the absence of a high school diploma or GED is classified as a human capital liability.
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