September 23, 2004

Welfare research

Illinois reform creates two classes

The latest findings of the Illinois Families Study (IFS) suggest that in the years since Illinois implemented welfare reform, two distinct groups of families who once received benefits have emerged. Members of the first have found jobs and are faring reasonably well. Members of the second, however, remain unemployed and — with welfare virtually unavailable — subsist on benefits such as food stamps, Medicaid and housing assistance.

Titled “The Two Worlds of Welfare Reform in Illinois,” the IFS report depicts far different circumstances for former welfare recipients who are employed. According to the report, they are faring as well or better than they did prior to welfare reform, despite the downturn in the economy from 2001 to 2003.

“More than six years after the implementation of welfare reform, Illinois has experienced a significant decline in welfare receipt but has failed to see an accompanying increase in workforce participation,” said Dan A. Lewis, professor of human development and social policy and a faculty fellow at the Institute for Policy Research (IPR). Lewis is the principal investigator of IFS.

“The latest wave of IFS findings showed a continued and troubling growth in the group of families who were neither working nor receiving welfare,” said Lewis. “Although many families have successfully left Temporary Assistance for Needy Families (TANF) for work, a group of families of almost equal size exists that relies neither on work nor TANF.”

Illinois’ moderate policies and the provision of several strong work supports have helped to make work “pay” for many families. For about one-half of the families studied, employment — often supported by resources such as childcare subsidies, health insurance, and food stamps — has offered a boost in earnings and overall well-being. For the other half who were jobless in 2003, welfare reform has meant hardship and vulnerability.

IFS has followed more than 1,000 of the state’s poorest families — all of whom were TANF grantees in the fall of 1998 (approximately one year after welfare reform was initiated in Illinois).

On the positive side, the latest findings from 2003 reveal that work remained stable, earnings increased, and TANF use dropped sharply since the first interviews were conducted in 1999-2000. Homelessness among working families was down to 3 percent from 7 percent in 1999-2000 and the percentage receiving work-related benefits increased.

Eighty-one perent of those who were working (48 percent) reported relatively stable levels of job satisfaction, and most adults reported that they (80 percent) and their children (96 percent) were experiencing “good” to “excellent” levels of health. Overall, depression seems to have declined with those adults reporting depressive symptoms falling from 24 percent in 1999-2000 to 18 percent in 2003.

Yet Lewis emphasized the daily hardships that current and former welfare recipients still face in their attempts to better their lives. He stresses that two issues must be addressed. First, while working families seem to be doing better after welfare reform, they still live in poverty. Many earn less than $15,000 a year, and 45 percent still experience some type of hardship.

Second, there remains the troubling and widening gap between the employed and the unemployed. This has led to a dramatic growth in the group of families neither working nor receiving cash assistance.

This “no-work/no-TANF” group represents some of the most vulnerable families in the study. Many of its families share an increased likelihood for chronic health problems and for having children with a severe health condition.