Publications on State Programs, Budgets

This report examines the effects of a comprehensive set of 13 welfare, Food Stamp, individual development account (IDA), earned income tax credit (EITC), and minimum wage program rules on the asset holdings of low-education single mothers and families. This report finds empirical evidence that more lenient asset limits in means-tested programs and more generous IDA program rules may have positive effects on asset holdings of low-education single mothers and families.

Wide variation in states’ welfare policies and needy recipients’ access to local services pose special challenges to low-income parents who already have employment barriers.

Many low-income parents with personal challenges that make work difficult (sometimes called the "hard to employ") seek help from the Temporary Assistance for Needy Families (TANF) program, but many do not. The most effective TANF programs offer cash assistance along with services that alleviate barriers and help clients find jobs. Other federal-state programs offer help by providing either generic employment services or specialized services that address particular challenges. Hard-to-employ parents probably fare best when they enroll in TANF and receive a holistic set of supports. A redesigned system should marshal all program resources to provide an integrated system that addresses barriers and supports work simultaneously.

Federal and state spending on work supports for low-income families grew between 2002 and 2005, with Medicaid accounting for most of the spending growth. After 2002 states spent less on child care, and federal EITC spending declined slightly as the number of employed parents decreased. Yet, food stamp spending increased as family incomes declined and program changes expanded eligibility and participation. The weaker economy also explained a large share of the increase in Medicaid spending. Differences in the design of programs and needs among families led to wide variation in the amount of support received by families across states.

Low-income families in Alaska, Connecticut, Maine, Maryland, Minnesota, New York, Rhode Island, and Vermont received more than $4,000 in work supports per person in 2005, more than double what their counterparts in Idaho, Nevada, and Utah received, an Urban Institute analysis of data for 44 states reveals.