Welfare Plan Gives Families Surer Footing, Study Says
Five years ago, Bridget Ellis didn’t think she could sink any lower. She was jobless, on welfare and had a 2-year-old daughter to support.
Today she works in the accounting branch of a bank. Her daughter is thriving. And Ellis, 29, is planning a summer wedding to a man she met after she began working. She has been off welfare completely now for three years.
She is convinced that what changed her life was an experimental welfare program in Minnesota that continued her benefits at a high level--even though she was working--and subsidized her child care costs so she could stay above the poverty level.
In a comprehensive study that tracked the lives of 14,000 families, half in the experimental program and half in the traditional welfare program, a research firm Wednesday reported dramatic results for one approach to breaking welfare recipients free from the cycle of poverty.
In many places, the success of welfare recipients in finding jobs has been undercut by their continuing poverty and by the family problems that especially afflict the poor.
But the new study--conducted by the nonprofit Manpower Demonstration Research Corp. in New York--indicates that extended help during the transition phase can help provide that needed boost to lasting stability.
Among participants in the experimental program, the number of marriages increased, existing marriages become more stable, domestic abuse dropped and children’s behavior and academic performance improved.
“Social scientists have argued for years about whether or not the welfare system discourages marriage or encourages parents to split up,” said Lisa A. Genetian, one of the study’s authors. “This is the first solid evidence that changing the rules of the welfare system can actually increase the likelihood that single parents get married and that parents in two-parent families stay together.”
Getting Recipients Out of Poverty Is Goal
The catch is money. The Minnesota Family Investment Program, launched six years ago in seven urban and rural counties, had as its goal not only to get welfare recipients off the rolls and into jobs but to lift them out of poverty.
Workers were allowed to continue receiving some welfare benefits by not counting 38% of their earnings when calculating their welfare benefits. They were allowed to continue receiving some benefits until their income was 40% above the poverty line. Child care subsidies were paid directly to child care providers for parents who worked.
But “the extra income was available only if you worked,” said Ginger Knox, the study’s lead author. “The program was presented as a very positive opportunity and the program’s staff encouraged people to use that opportunity to move ahead.”
Although expensive--the Minnesota program was more costly than the Aid to Families With Dependent Children system it replaced in the seven counties--the results could prod other states into considering similar, explicit anti-poverty objectives. It cost from $2,000 to $3,800 more per family each year than does the regular welfare system.
“It’s worth every penny,” said Ron Haskins, Republican staff director for the human resources subcommittee of the House Ways and Means Committee. “In Minnesota, they get extra money because of how generous they are with welfare--that could be what’s producing the effect here.”
Haskins, who has studied welfare reform nationwide, added: “Families need more money than they can earn themselves. For the first time, we see that this can have an impact on families--on people staying together and on kids.”
The differences between the two groups in the study, closely monitored for 2 1/4 years, were striking.
Employment went up for both groups but not equally. By the end of the study, nearly 50% of the Family Investment group worked, compared to 37% of the AFDC group. Earnings also had increased by 23% more among the experimental group.
Family Financial Effect Called Dramatic
Because of financial incentives, earnings in the Family Investment program averaged 15% higher from earnings and welfare combined ($2,700 compared to $2,348). Likewise, the percentage of families with above-poverty income rose at different rates--15% of the AFDC group and 25% of the Family Investment group throughout the study period.
Most dramatic, however, was the effect that financial outcomes had on family life, the study said.
Domestic abuse of mothers decreased 18% (49% of the Family Investment group, compared to nearly 60% of the AFDC group, reported instances of abuse); marriage rates increased 7% in the AFDC group, compared to 11% in the Family Investment group, and children’s behavior improved.
“Compared with mothers in the AFDC group, mothers in [Family Investment] were less likely to report that their children exhibited problem behaviors, such as cheating or being cruel, disobedient or moody,” the report says.
Among two-parent families, those in Family Investment “were more likely to maintain their marriages without separation or divorce throughout the three years after the start of the program,” the report says. “At the end of year three, 67% were married, compared with 48.5% of AFDC families--a 38.1% increase.”
The program’s “positive effects on economic outcomes and on family and child well-being are unprecedented,” said Gordon Berlin, senior vice president of the research firm.
“By supporting people when they work, [Family Investment] has succeeded where other reforms have failed--increasing work, income and marriage together,” Berlin added.
Whether the Minnesota pilot program would work as well in other states is unclear and untested.
“These are interesting findings--encouraging on a number of fronts,” said Earl Johnson, associate secretary for planning and evaluation for the California Health and Human Services Agency. But he cautioned: “Minnesota is very different from California.”
The study comes at a time when many states are evaluating their own programs, established after federal welfare reform legislation was enacted in 1996. The legislation provided guidelines and block grants to states to craft plans to reduce welfare rolls and move welfare recipients into the work force but left to the states the methods for accomplishing those objectives.
Federal law limits federal funds to covering 60 months of benefits, so most states set time limits for receiving them. States are free to use state funds to pay benefits beyond federal limits.
The majority of states have imposed time limits of one form or another, including California--and now even including Minnesota. In Minnesota, the Family Investment pilot project--which was begun in 1994 before the federal law was enacted--did not have a time limit. In 1998, Minnesota took its experimental program statewide, imposing time limits at the same time.
“The big important difference is that the Minnesota program provided continuing help to working families without imposing time limits,” said Mark Greenberg, a senior staff attorney with the liberal Center for Law and Social Policy, a Washington-based research and advocacy organization. “Families may be fearful that getting help now may hurt the family later. One thing a state could do is change its rules so that time limits aren’t used to cut off assistance to working families--only to nonworking families. Time limits weren’t thought of as a way to cut off help to people who are working.”
Or, suggested Berlin, “the study results may prompt Minnesota officials to take another look at time limits.”
