The Working Poor and Welfare Recipiency: Participation, Evidence, and Policy Directions
Kim, Marlene, Mergoupis, Thanos, Journal of Economic Issues
Current welfare debates assume that the poor are taking unfair advantage of the government's largess by shunning work for welfare benefits. Yet many studies indicate that many of those who qualify for welfare benefits fail to receive assistance. This study adds to this growing body of research by finding that a substantial number of the working poor do not receive the Aid to Families with Dependent Children (AFDC) and Food Stamp benefits for which they qualify. Thus, it does not appear that the working poor (nor the general population of the poor) are taking advantage of the welfare system. In addition, we examine the argument that the working poor are poor because they are somewhat unusual - that they are either very young or old, do not work many hours, drop out of high school, or are in unusual family arrangements. We find that the working poor do not share these characteristics to the extent previously claimed. Many of the working poor are in married-couple families, most are in their prime working years, most have at least a high school education, and the majority work many hours. We conclude that rather than being poor because of their own bad choices or behavior, the working poor are destitute because of the particular jobs they hold, which tend to be in low-paid service occupations and industries.
Research on Welfare Participation
A small body of research has examined the curious fact that many of those who qualify for welfare programs fail to receive benefits(1) [see Bendick 1980, who surveyed this phenomenon during the 1970s]. For example, among those eligible for benefits, 25 percent fail to receive AFDC [Willis 1981; Ruggles and Michel 1987; Giannarelli and Clark 1992], and 50 percent fail to receive Food Stamps [Doyle and Beebout 1988; Trippe and Beebout 1988; Trippe et al. 1992]. Survey research, which directly asks participants why they do not participate in welfare programs, suggests that the main reason is lack of information: most simply do not know that they are eligible [Coe 1983; 1979]. Other factors include desires to avoid the increased administrative hassles, feelings that they do not need the income, accessibility problems (inadequate transportation or child care, limited staffing hours in welfare offices, or problems filling out the forms), and stigma [Bendick 1980; Coe 1983, 1979; Allin and Beebout 1989].
Those who are less likely to participate in welfare programs tend to share the following characteristics: they are older, male, and able-bodied; they have higher incomes, more education, and fewer children; and they live in rural areas or in states with low unemployment rates. Those who work, who qualify for smaller welfare benefits and for a shorter duration of time, who live in families with at least two adults, and who live in households in which other members do not participate in welfare programs are also less likely to receive benefits [Blank and Ruggles 1993; Coe 1979, 1983; Willis 1981; Doyle and Beebout 1988; Allin and Beebout 1989; Fraker and Moffit 1988].
None of the welfare participation research has examined the participation of the working poor, however. Yet the working poor may act quite differently from the non-working poor. With generally higher incomes, more education, and more continuous work experience than the general population of the poor, the working poor are probably less likely to receive welfare assistance. This essay examines the participation rates of the working poor in Food Stamps and AFDC and whether those who do not participate in these programs do so because of a lack of need. It also comments on the debate regarding why workers are so destitute that they qualify for either of these programs.
Data and Methodology
Data for this study are from the U.S. Census' Survey of Income and Program Participation (SIPP), a multi-panel longitudinal data set. Those followed in each panel of this survey are a representative sample of the civilian U. …