Bane, Mary Jo and David Ellwood, Welfare Realities: From Rhetoric to Reform. (Cambridge, Massachusetts: Harvard University Press, 1994).
Manpower Research Demonstration Corporation (1994a), Florida’s Project Independence: Program Implementation. Participation Patterns, and First-Year Impacts. (New York: MDRC, January 1994).
Manpower Research Demonstration Corporation (1994b) GAIN: Benefits. Costs. and Three-Year Impacts of a Welfare-To-Work Program (New York: MDRC June 1994.)
Urban Institute “Lessons From Welfare Reform Efforts in Washington State” Policy and Research Report Vol. 24 No. 1 (Winter/Spring 1994) pp. 16–17.
U.S. House of Representatives, Committee on Ways and Means 1993 Green Book: Background Material and Data on Programs Within the Jurisdiction of the Committee on Ways and Means. (Washington: Government Printing Office 1993).
The author would like to thank colleagues in the Western Hemisphere Department for useful comments and discussion.
An additional 6 percent of the budget is devoted to other income support and related programs, such as housing assistance, food and nutrition assistance, and the Supplemental Security Income (SSI) program which provides cash payments to low-income aged, blind, and disabled persons.
The number of families on AFDC rose in 1993, but projections by the Department of Health and Human Services show the number of families on AFDC falling during 1994-95 as the effect of the economic downturn dissipates. Subsequently, the number of recipients is projected to increase at about the rate of population growth.
Analyses using monthly rather than annual data show that 70 percent of all welfare recipients leave within two years.
Because recipients who experience longer spells tend to accumulate In the system, the dynamics of welfare look quite different if one looks at expected total spell duration for the welfare caseload at a point in time. According to the authors’ estimates, less than 15 percent of all current recipients will be on welfare for two years or less and 48 percent will be on welfare for ten years or more (Bane and Ellwood (1994), p. 29).
Alaska and Hawaii are excluded from the following discussion since their poverty lines are set 25 percent and 15 percent higher, respectively, than that for the continental United States.
Council of Economic Advisors (1994), pp. 134 and 165-66.
Source: U.S. House of Representatives (1993), p. 647. The calculations of AFDC benefits assume that benefits are reduced in proportion to earnings increases after disregarding the following: $120 a month, plus child care costs equal to 20 percent of earnings (up to a maximum of $350 a month for two children). For purposes of calculating disposable income, work expenses are the sum of child care costs and 10 percent of earnings (up to a maximum of $100 a month).
The EITC is a refundable tax credit to low-income families with children.
For comparison, a full-time job at the minimum wage ($4.25 an hour) would pay $8,840 a’year.
Includes state option to reduce AFDC-UP eligibility requirements; investments in automation; and incentives to work and save.
These calculations are based on the following assumptions: $1.5 billion in federal funding for JOBS; the minimum federal match rate of 70 percent; 965,000 JOBS participants in 2004; and a projected rate of inflation of 3.4 percent during 1995-2004.