Standing Still or Moving Up? Evidence from Wisconsin on the Long-Term Employment and Earnings of TANF Participants

This study identified the employment and earnings trajectories of welfare recipients over six years for a sample of 14,150 women who entered the Temporary Assistance for Needy Families program (TANF) in Wisconsin in its first year. Wisconsin longitudinal administrative data were used to examine differential patterns of mid-term (three years) and long-term (six years) employment and earnings success. We developed a conceptual approach to categorizing participants' employment and earnings trajectory groups. Results indicate substantial diversity in employment and earnings patterns. Some women have consistently positive outcomes, others show steady improvements over time, and others have inconsistent patterns that end strong. We found that 46% of the sample fit into one of three successful employment trajectories, and 22% fit into one of three successful earnings trajectories. Results also reveal that many women who were successful in the mid-term were not able to sustain their progress. For example, only 56% of those who were earning successes in the mid-term were still successful in the long-term. Final]y, logistic regression models were used to compare the factors associated with mid-term and long-term success and with employment success and earnings success. Implications of findings are discussed. KEY WORDS: employment and earnings; poverty; social policy; TANF; welfare reform ********** Since the passage of the Personal Responsibility and Work Opportunity Reconciliation Act (PRWORA) of 1996, welfare programs have aimed to move low-income women with children from welfare to work. In the past decade, the number of single-mother families receiving traditional cash assistance (now called Temporary Assistance for Needy Families [TANF]) has fallen dramatically, and employment rates have risen. However, much of the literature on the economic well-being of welfare recipients and welfare leavers suggests that many who have moved from welfare to work move in and out of the labor market frequently, are working for low wages, and have insufficient earnings to support a family above the poverty line without receiving public means-tested benefits. (For a discussion of post-TANF economic status, see Blank, 2006; Cancian & Meyer, 2004; Danziger, Heflin, Corcoran, Oltmans, & Wang, 2002; Grogger & Karoly, 2005; Johnson & Corcoran, 2003.) Most of the early studies on economic well-being of welfare recipients after welfare reform have examined employment, earnings, and income after leaving cash benefits over fairly short periods of time. Less is known about whether the short-term economic success (or lack of success) has persisted in the long-term. In this article, we use longitudinal administrative data to examine the employment and earnings trajectories of welfare recipients over six years for a sample of approximately 17,000 women who entered TANF in Wisconsin in its first year. We propose a method to characterize the six-year patterns of employment and earnings and consider differential patterns of mid-term (three years) and long-term (six years) employment and earnings success. We compare the factors associated with mid-term and long-term success. POLICY CONTEXT This article focuses on TANF participants in Wisconsin. Wisconsin's TANF program, called Wisconsin Works (W-2), was instituted in September 1997. W-2 consists of several "tiers" and is structured to mirror the world of employment. Thus, individuals do not receive a cash payment unless they are working in a community service job, are engaged in a work-like activity (W-2 Transitions), or have a child younger than 13 weeks old (caretaker of newborn). In addition, individuals who are the most work-ready can receive a variety of services without receiving cash (case management). Individuals are expected to begin in the tier that corresponds to their level of work-readiness and to progress up the tiers until they no longer need any W-2 services. …