View Research by Author - Linda Giannarelli

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Citation URL: http://www.urban.org/LindaGiannarelli

This report presents an analysis of policies recommended by the Center for American Progress Task Force on Poverty. The analysis uses the TRIM3 microsimulation model. The policies include increasing the minimum wage, expanding the EITC and other tax credits, expanding the child care subsidy system, increasing participation in the Food Stamp Program, rescinding restrictions on legal aliens' eligibility for benefits, and increasing the number of housing vouchers. The analysis focuses on the policies' impacts on poverty, using a broad definition of income—after taxes and child care expenses and including the value of food and housing aid.

Congress reauthorized TANF in February 2006 as part of the Deficit Reduction Act of 2005. The changes included under reauthorization will require most states to greatly increase work participation among their caseloads in order to avoid financial penalties and could cause many states to rethink their current welfare policies overall. This marks a good time to review states' current rules, which provides a benchmark against which future changes can be assessed. This brief reviews the multiple ways a family can get on welfare, stay on, and leave (or lose) assistance. It uses the Urban Institute's Welfare Rules Database (WRD) to examine the variation in key policies as of 2003.

Data from the 1999 National Survey of America's Families examines the help families get paying for child care expenses. Twenty-nine percent of employed families with children under age 13 get help paying for care, or free care, from relatives, the government, private organizations, employers, non-resident parents, or other individuals. At least 14 percent of families get free child care from relatives, and at least 12 percent get free child care or pay lower bills due to help from the government or private organizations. The report examines the help received by families by income and family structure as well as expenses with and without preschool-aged children. The report updates earlier research on the incidence and amount of child care expenses. Despite the help they receive, low-income families paying for child care spend an average of 14 percent of their earnings to purchase that care. [View the corresponding press release]

About 300,000 more persons in single-parent families lived in extreme poverty in 1998 than 1996. This primarily reflects an increase in the number of low-income families that left or chose not to enroll in government support programs. Increasing enrollment in government safety net programs could make a big difference. In 1998, if all families with children participated in the post-reform government safety net programs for which they qualified, poverty would have been 20 percent lower and extreme poverty would have been 70 percent lower. These poverty improvements provide a strong rationale for changing existing programs to provide "family-friendly" delivery systems and more standardized eligibility requirements. These changes could maximize the number of families that take advantage of government safety net programs.

Nearly half of America's working families with a child under age 13 have child care expenses that consume on average 9 percent of their monthly earnings. Working low-income families, single parents, and families with younger children spend a considerably higher share of their earnings on child care. Families with earnings below the federal poverty level who pay for child care spend an average of 23 percent of their monthly earnings on childcare. The average dollar amount that a family spends on child care in a month varies widely across states, reflecting differences in state costs of living, but the share of earnings that a family spends does not.

There are two Highlights for each state. The income support and social services Highlights look at basic income support programs, employment and training programs, child care, child support enforcement, and the last-resort safety net. The Highlights capture policies in place and planned in 1996 and early 1997.

Concerned that some states were promoting family break-ups by limiting cash assistance to only single-parent families, Congress passed the Family Support Act of 1988, which required all states to provide assistance to intact families through the AFDC Unemployed Parent program (AFDC-UP). This evaluation examines the effect of the mandatory program, four years after its inception. The authors examine what happened to the UP and AFDC Basic caseloads and what effect UP has had on family stability and child poverty.

The state reports describe the safety net and health care programs in place for low-income people on the eve of welfare reform. The reports also analyze the particular circumstances that are shaping the state's response to the Personal Responsibility and Work Opportunity Reconciliation Act (PRWORA). The state reports are based on case studies in the respective state.

This brief depicts the diversity of state AFDC programs prior to passage of TANF. It concludes that states with low benefit levels under AFDC may have the hardest time implementing the new work requirements included in TANF. They will have fewer federal resources per family to prepare recipients for moving into jobs. States with relatively large shares of child-only cases may have an easier time meeting work-participation requirements because these cases are excluded from the work target calculation.

The authors present the results of a two-year study to develop the capability to provide comprehensive, population-wide estimates of true tax rates faced by individuals participating in most social welfare and tax programs with respect both to current law and proposed changes in the law. The results focus on households receiving Aid to Families with Dependent Children. Also discussed are the work and marriage penalties in welfare and the implications of this study for welfare reform efforts.

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