Academic journal article Social Work

"Leavers" from TANF and AFDC: How Do They Fare Economically?

Academic journal article Social Work

"Leavers" from TANF and AFDC: How Do They Fare Economically?

Article excerpt

Temporary Assistance for Needy Families (TANF) was enacted as a part of the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (PRWORA) (P.L. 104-193) and is a drastic departure from the Job Opportunity and Basic Skills Training Program (JOBS), enacted as part of the Family Support Act of 1988 (P.L. 100-485; for information on how TANF is implemented in the states, see Stoltzfus, Burke, & Falk, 2000). This historic departure is reflected in TANF's "work first" orientation, the two-year limit in any spell of receiving cash assistance without engaging in work or work-related activities, and the five-year lifetime limit on receiving cash assistance.

The JOBS policy with regard to work and work-related activities had an enabling rather than mandatory tone. It allowed, but did not require, states to offer job development, job placement and job search services, on-the-job training, work supplementation (wages subsidized by benefits), and community work experience. Moynihan (1990) and others (for example, Lurie & Sanger, 1991) argued that the JOBS program established a mutually understood social contract, under which recipients of Aid to Families with Dependent Children (AFDC) were to assume responsibility for becoming self-sufficient while the government provided necessary education, training, child care, and supportive services.

The JOBS program imposed no time limit on any spell of welfare dependence or a work trigger. If states wanted to experiment with a time limit, they were required to receive waivers from the U.S. Department of Health and Human Services. The JOBS programs prohibited states from terminating family benefits as a penalty for not working.

The TANF two-year limit began in July 1997, and the five-year limit was effective in July 2002. Some states, (for example, New York) implemented TANF in December 1996, and the five-year limit became effective in December 2001.

Across-the-board mandates with regard to work and time limits might have reflected a shift in the U.S. public's attitudes toward recipients of cash assistance. For example, in establishing TANF in 1996, some congressional leaders thought that providing permanent income support for needy children in single-parent families had encouraged family breakup, enabled out-of-wedlock births, and fostered long-term dependence (U.S. House of Representatives, 2000). What really pushed such mandates through Congress, however, was the Clinton administration's co-optation of a conservative agenda for political reasons (Goldberg & Collins, 2001).

Economic theory on rational decision making suggests that such an across-the-board treatment of low-income families headed by single mothers may not have desirable effects. Economists argue that individuals decide to change, or not to change, their life courses to maximize their economic well-being (see McConnell & Brue, 2002). Thus, it would be expected that welfare recipients who choose to exit from welfare do so because they believe they can improve their economic well-being through work. These recipients would take into account the level of wages they think they could receive based on their work experience (economists call such wages "reservation wages"); the level of market wages that may be offered to them; and the level of income they need to support their families, including the cost of child care. Conversely, recipients who decide to stay on welfare conclude that the market wages are not enough to support their families and take care of their children.

The time limits and work-related rules under TANF operate against such a theoretical assumption and prevent individuals from deciding their life courses according to their own sense of rationality. In particular, the two-year limit in any spell of welfare dependence and a five-year lifetime limit in receiving cash assistance do not take into account individual differences in employability and family needs. …

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