The Welfare Indicators Act of 1994 (part of Public Law 103-432) directed the Secretary of Health and Human Services to study the most useful statistics for tracking and predicting dependence on three means-tested cash and nutritional assistance programs: Aid to Families with Dependent Children (AFDC), Food Stamps, and Supplemental Security Income (SSI). It also required the submission of annual reports on welfare receipt in the United States that track key indicators and predictors of welfare dependence. An Interim Report to Congress addressing the development of welfare indicators and predictors and assessing the data needed to report annually on the indicators and predictors was submitted a year ago. This report is the first of the annual reports required under the law.
This year's first annual report differs from the Interim Report in several important ways. While the Interim Report provided a wide-ranging list of indicators, this report highlights a few measures of dependence that were recommended for consideration by the Advisory Board. Although recognizing the difficulties inherent in defining and measuring dependence, the Advisory Board proposed the following definition that could be tracked over time:
- A family is dependent on welfare if more than 50 percent of its total income in a one-year period comes from AFDC/TANF, Food Stamps and/or SSI, and this welfare income is not associated with work activities. Welfare dependence is the proportion of all families who are dependent on welfare.
The Advisory Board's recommended definition would count as work activities only unsubsidized and subsidized employment and work required to obtain benefits. This concept and measures of this definition, as well as a duration of receipt measure, are presented and discussed in Chapter I. A discussion of measures of deprivation is also included in Chapter I to ensure that dependence measures are not assessed in isolation.
Chapter II includes indicators of income and food assistance program participation and program-related measures of dependence. These indicators focus on recipients of cash and nutrition assistance, and reflect both the range and depth of dependence. Data relating recipients' level of welfare income, amount of earnings, duration of receipt, participation in the labor force while receiving assistance, and multiple program receipt are included, along with information on events associated with beginning and ending receipt of means-tested assistance. Trend data on these indicators are provided where available.
Data on risk factors that have been identified as associated with welfare utilization and dependence are provided in Chapter III. While the Advisory Board was in agreement that a smaller set of dependence indicators should be highlighted, they were also in agreement that, since the causes of welfare receipt and dependence are not clearly known, the report should include a larger set of risk factors associated with welfare receipt. Still this report reduces the overall number of predictors and risk factors by about 20 percent from the number included in the Interim Report. Most of the deleted indicators are measures of well-being, particularly child well-being, that are tracked in other publications of the Department of Health and Human Services. The risk factors in Chapter III are loosely organized into three categories: economic security measures, measures related to employment and barriers to employment, and measures of teen behavior, including nonmarital childbearing.
Chapter IV addresses some of the complexities of data reporting and collection under the Temporary Assistance for Needy Family (TANF) block grants. Since the 1996 welfare law fundamentally changed the nation's cash assistance programs, it is important to understand the policy and program context that may surround changes in welfare dependence over time. It is crucial to collect a sufficient level of detailed administrative data about the TANF program and its recipients and benefits to permit tracking trends in dependence and deprivation over time. The quality and level of detail of TANF administrative data takes on even greater importance in the context of this report's proposed primary indicator of welfare dependence. In addition, despite the fact that most national survey data are not representative at the state level, they are critical for capturing indicators of adult labor force participation, earnings, program participation, fertility and child well-being, as well as complementing caseload data for tracking changes in dependence.
Because welfare programs have changed substantially in the recent past and are continuing to change rapidly, Appendix A is included to give basic data on each of the three main welfare programs and their recipients over the past several years. Appendix A briefly describes the three programs covered by the Welfare Indicators Act and highlights some of the recent legislative changes that will affect participation and/or expenditures in those programs. It also includes information on the population and characteristics of individuals and families receiving AFDC/TANF, Food Stamps and SSI, and national and state data on program participation and expenditures trends.
Other Appendices provide more detailed information on several related subjects. Appendix B consists of a series of tables on poverty issues. Appendix C includes a comparison between the indicators and predictors included in this Annual Report and those recommended in the Interim Report. Additional data on nonmarital childbearing is included in Appendix D. (author abstract)