Employment, Earnings, and Recidivism among Georgia's TANF Leavers: Findings from the TANF Follow-Up System Georgia Department of Human Resources Division of Family and Children Services March, 2005 Acknowledgments This report was prepared by Nancy Bross under contract to the Georgia Department of Human Resources. She would like to thank the staff of the Division of Family and Children Services, Evaluation and Reporting Section for their continuing support of the development and maintenance of the TANF Follow-Up System and for their assistance in the preparation of this report. Contents Executive Summary .....................................................................................................................i Introduction ................................................................................................................................ 1 The Welfare Environment .......................................................................................................... 3 The TANF Leaver Population..................................................................................................... 5 Patterns of Employment and Recidivism in the First Year after Exit ..........................................11 Longer Term Outcomes ............................................................................................................17 Industries Employing TANF Leavers .........................................................................................24 Appendices: Appendix A ............................................................................................................................29 Appendix B ............................................................................................................................31 Executive Summary The TANF Follow-Up System tracks the employment, earnings, and return to TANF of adult recipients who have left TANF. It uses administrative data from the Department of Human Resources' management information system and the Georgia Department of Labor's Unemployment Insurance (UI) wage report files. This report focuses on four annual groups of leavers ("annual cohorts") who left TANF from 2000 through 2003. Welfare Environment From 1997 through 1999, the number of families receiving TANF dropped by 52 percent, leveling off around 50,000 household a month in 2002. In January 2001 the US economy began an economic downturn that resulted in substantial and persistent job loss here in Georgia. During the period from 2001 to 2003, the number of household receiving TANF increased to almost 60,000. In 2001, recipients began to reach the 48-month State lifetime limit on receipt of TANF benefits. A year later, recipients who had been granted waivers of the State limit began to reach the 60-month Federal lifetime limit. Coupled with the economic downturn, this event created a harsh economic reality for long-term TANF recipients. Throughout this period, TANF benefits remained the same as the cost of living increased. Population of TANF Leavers During the period from 2000 through 2003, 111,889 adult recipients left TANF. Of these, 78 percent appeared in only one of the four annual leaver cohorts. The remaining 22 percent appeared in two or more cohorts. Although the number of leavers increased as the number of households receiving TANF increased, the demographic characteristics of the TANF leavers remained relatively stable from 2000 through 2003. In 2003, the leavers' median age was 27, their average number of dependent children was 2.0, and the median age of their youngest child was 2. Only 59 percent of the leavers were high school graduates. At the time they left, 48 percent of the 2003 leavers had accrued 1 to 12 lifetime limit months and 72 percent had accrued fewer than 25 months. These leavers were younger, had fewer children, and were more likely to be high school graduates and to be married or to have been married than longer-term recipients. Five percent of the 2003 leavers left TANF after receiving benefits for 49 to 84 months. These leavers were clearly more disadvantaged than other leavers with regard to their ability to support their families. They had more children, and the majority had not graduated from high school. Eighty-four percent had never been married, compared to sixty-nine percent of the leaver population as a whole. Sixteen percent were receiving mental health, substance abuse, or rehabilitation services at the time they left TANF. The most important predictor of how many lifetime limit months a recipient will accrue is number of children. Other important factors predicting longer-term receipt of benefits are lack of a high school diploma and receipt of mental health, substance abuse, and i rehabilitation services. For black leavers, never having been married is associated with an especially substantial increase in number of accrued months. Patterns of Employment and Recidivism in the First Year after Exit We do not know to what extent recipients leave TANF because of employment, but the presence of earnings in the quarter in which an adult left TANF is indicative of employment around the time of exit. From 2000 through 2003, the percentage of leavers who were employed during the quarter in which they left TANF decreased from 62 to 54 percent. Eighty-five percent of the 2003 leavers who had earnings in their exit quarters worked in services or retail trade. During this same period, the percentage of leavers who were employed in at least one quarter of the first year after leaving TANF decreased from 75 to 69 percent. The percentage who returned to TANF ranged from 26 to 29 percent. There was a strong relationship between number of accrued lifetime limit months and employment and earnings in the first year after exit. In the 2002 leaver cohort, as number of accrued months increased, number of quarters worked, average earnings in quarters worked, and average annual earnings all decreased. Only 6 percent of those who had accrued more than 48 months when they left TANF had average monthly earnings in the first year after exit that exceeded the TANF Gross Income Ceiling for their family size, compared to 24 percent of those who had accrued only 1 to 12 months when they left TANF. Within each annual cohort, the majority of those who returned to TANF in the first year after exit had also been employed during that year. Among the 2002 leavers, those employed leavers who returned to TANF worked fewer quarters, earned less in each quarter of employment, and earned less than half as much over the course of the year as those who did not return $3,916, compared to $8,372. They also were younger, were less likely to have graduated from high school, and had accrued more lifetime limit months There was a strong relationship between continuity of employment and earnings. Higher earnings motivate, support, and result from steady employment. Consequently, the more quarters leavers worked in the year following exit from TANF, the more they earned in each quarter worked. Leavers who worked in all four quarters had annual earnings that were 12 times higher than those who worked in only one quarter. Other factors that had a substantial impact on earnings were having a high school diploma and, among high school graduates, living in a Metropolitan Statistical Area (MSA). Graduates who were employed earned an average of $2,837 more than non-graduates in their first year after exit. Longer Term Outcomes Within annual leaver cohorts, employment decreased in successive post-exit years, but the earnings of those who were employed increased. Within each post-exit year, employment rates decreased with each successive cohort. The decline in percentage of leavers employed in all four quarters of a year is of particular concern because it is leavers who work steadily who make the most economic progress. ii The economic downturn that began in 2001 undoubtedly contributed to decreasing employment. By the first quarter of 2004 the most recent quarter for which earnings data are available the economy had begun to improve, but there was no corresponding improvement in the employment and earnings of TANF leavers. When the annual earnings of employed leavers are compared to the Federal Poverty Guidelines, which are keyed to family size and adjusted annually for increases in the cost of living, it is clear that, as a group, TANF leavers are losing ground. While it continues to be true that the longer it has been since recipients left TANF, the greater the probability that their annual earnings will exceed the Poverty Guidelines, the percentage of leavers whose earnings have exceeded this measure of economic well- being has decreased with every successive annual cohort since 1997. Among the 2000 leavers the most recent cohort for whom three full years of follow-up data are available 83 percent worked at some time in the 3 years following exit, and 18 percent worked in all 12 quarters. Number of quarters worked was strongly associated with whether a leaver had earnings in the third year after exit that exceed the Poverty Guidelines. Forty-three percent of those who had worked in every quarter had earnings above the Poverty Guidelines, compared to twelve percent of all 2000 leavers. However, leavers with three or more children were very unlikely to have earnings that exceeded the Poverty Guidelines, regardless of how many quarters they had worked. A "snapshot" of dependency on public assistance, taken in June 2004, showed that the longer it had been since an annual cohort had left TANF, the smaller the percentage of leavers who received Food Stamps, Medicaid, or Child Care Assistance that month. Dependency on public assistance was strongly associated with accrued lifetime limit months at time of exit. In the 2003 leaver cohort, 55 percent of those who had 1 to 12 accrued months at exit received Food Stamps in June 2004, and 64 percent received Medicaid. However, 89 percent of those who had accrued 49 to 84 months received Food Stamps in June 2004, and 84 percent received Medicaid. Industries Employing TANF Leavers Standard Industrial Classification (SIC) codes are available for leavers' employers. These codes provide information at three levels of detail: industrial divisions, major industrial groups, and specific industries. Eighty-two percent of the 2002 leavers who were employed in the fourth quarter after exit worked in the industrial divisions of Retail Trade or Services. At the next level of detail, 56 percent of the 2002 leavers were employed in just ten major industrial groups. The top three industrial groups were Eating and Drinking Places, Personnel Supply Services, and Nursing and Personal Care Facilities. Overall, 42 percent of the 2002 leavers had not graduated from high school, but only 37 percent of those who were employed were non-graduates. Among industries employing 75 or more leavers, there was a generally inverse relationship between average quarterly earnings and the percentage of leavers employed in the industry who had not graduated from high school. iii iv Introduction The TANF Follow-Up System was established by the Georgia Department of Human Resources (DHR) in 1997 to track the employment, earnings, and recidivism of adults leaving Temporary Aid for Needy Families (TANF). Since then, over 190,000 adults have left TANF. This report summarizes the post-TANF outcomes of those who left during the period from 2000 through 2003. Methodology The TANF Follow-Up System is a data base containing information on adult recipients from closed TANF cases. In this data base, DHR data on TANF recipients are matched to quarterly earnings data from the Georgia Department of Labor (GDOL). Identifying Adult Leavers. The event that triggers inclusion in follow-up is case closure. However, because families may go on and off TANF as their circumstances change or they go in and out of compliance with program requirements, it is not always clear when a case is truly closed. Therefore, for purposes of follow-up, a case is considered closed when no benefits are received in two successive months. Recipients are added to the TANF Follow-Up System the first time they meet the criterion for inclusion during a calendar year. If they receive additional benefits at a later date, they are considered recidivists. However, they only appear once in the follow-up file for that year. The adults who left TANF during a calendar year make up the "annual leaver cohort" for that year. Only those adults who were actually TANF recipients are addressed in this report. Excluded are adults who received a benefit on behalf of a dependent child but who were not, themselves, part of the TANF grant. Data. All of the data in the TANF Follow-Up System come from administrative data systems. The advantages of such data are low cost and continuity over time. The disadvantage is that neither what is collected nor how it is organized and maintained is likely to be ideal for research purposes. Data on TANF recipients and households come from DHR's SUCCESS system. Data on employment and earnings come from GDOL's unemployment insurance (UI) wage record. This record is a report of quarterly earnings submitted by all employers in the state whose workers are covered under the UI system. It does not include information on wage levels, number of hours worked, or whether employment was continuous. However, it does provide total earnings in the quarter and the employer's Standard Industrial Classification code. Leavers are considered to have been employed in a particular quarter if they had any reported earnings for that quarter. UI earnings data provide a low-cost way of tracking employment over time. However, they have two important limitations. First, UI earnings data are only available for those jobs covered under the unemployment insurance system. Notable exclusions are federal jobs and self-employment, including informal work arrangements. For example, if a TANF leaver supplements her income by providing occasional childcare to a neighbor, the resulting earnings are unlikely to be reported to the UI system. In addition, the earnings of Georgians who work in neighboring states are not included in Georgia's UI data base. Therefore, UI data consistently 1 underestimate employment and earnings (especially in interstate labor markets) and the figures contained in this report reflect minimum levels of employment and earnings among former TANF recipients. Second, because of the time required for employer reporting and State processing of UI earnings data, complete data on earnings for any quarter are not available until three quarters later. Therefore, in this report, data on employment in the exit quarter are available for all adult recipients who left TANF during 2000 though 2003. However, post-exit earnings data are only available through the first quarter of 2004. Data on recidivism come from SUCCESS files of active TANF recipients. This report includes data on recidivism through September 2004. In addition, "snapshot" data for the month of June 2004 on receipt of Food Stamps, Medicaid, and Child Care Assistance have been added to leaver's follow-up records. 2 The Welfare Environment TANF Work Requirements and Lifetime Limits Under TANF, welfare is no longer an entitlement. Recipients must meet work requirements in order to maintain their benefits, and there is a 60-month Federal lifetime limit on receipt of family assistance. In addition, Georgia has established a more stringent State limit of 48 months. While these limits may be waived for reasons such as domestic violence or disability, Georgia's TANF recipients know that TANF benefits are limited and should be saved for when they are needed most. When the TANF rules went into effect, they had an immediate and dramatic effect on the number of families receiving assistance. In December 1996, 116,213 families received benefits under Aid for Families with Dependent Children (AFDC), the welfare program that was replaced by TANF in January 1997. By December 1999, the number of families receiving TANF was 55,327 a 52 percent decrease in just three years. In January 2001, recipients began to reach their State lifetime limits. A year later, recipients who had been granted waivers of the State limit began to reach the 60-month Federal limit. Some waivers of the limits have been granted, but only about five percent of the current TANF population has received benefits for more than 48 months. Similarly, about five percent of the leavers in the 2001, 2002, and 2003 cohorts had exceeded the State or Federal lifetime limits at the time they left TANF. Reduced Opportunity for Employment Georgia enjoyed strong economic growth during the first four years of the TANF program. Figure 1 shows Georgia's non-farm employment in January of each year from 1997 through 2004.1 From January 1997 through January 2001, employment in Georgia increased steadily. But job loss began early in 2001, and by the following January, there were over 116,000 fewer employed Georgians. Through 2002 and 2003, employment remained at about the same level, rising slightly by January 2004. However, employment still had not reached the level seen at the beginning of 2001, and it fell far short of the level one would predict based on the trend seen from 1997 through 2000. Figure 1 January Non-Farm Employment - Georgia, 1997 to 2004 4,000,000 3,800,000 3,600,000 3,400,000 3,200,000 1997 1998 1999 2000 2001 2002 2003 2004 1 Employment data in Figure 1 were obtained from the U. S. Department of Labor, Bureau of Labor Statistics, at http://www.bls.gov. 3 AJJJOOUUAPCCNLLRTT00000003233232 APR 02 AAJJJJJOOUUAAAPPCCNNNLLRRTT0000000001100101 With reduced employment opportunity, the TANF caseload began to rise, reaching almost 60,000 by December 2003. (See Figure 2). Figure 2 Increased Cost of Living and Average Earnings During the period from 2000 through 2003, the Consumer Price Index for Southern cities increased from 167.2 to 177.3 an increase of 6%2. Meanwhile, TANF benefit levels have remained the same since 1997, effectively diminishing their value to recipients. Over the same period, the average weekly earnings of US non-farm workers increased by 8%3. This report addresses the question of whether the earnings of those who left TANF kept pace with increases in wages and the cost of living. Number of Familes Receiving TANF: 2000 - 2003 60,000 58,000 56,000 54,000 52,000 50,000 48,000 46,000 Growing Urban Regions Georgia experienced very substantial population growth between the 1990 and 2000 Censuses. While many counties in Georgia remain rural, Georgia's Metropolitan Statistical Areas (MSAs) were redefined and expanded in 2003 to reflect the state's expanding urban areas. Under the 2003 map, 70 counties are part of 15 MSAs, including MSAs for smaller cities such as Rome, Brunswick, and Valdosta.4 Under the current definition, an MSA is an area with a population of 50,000 that is centered on an urban core and linked by commuting patterns. Workers residing in MSAs have access to larger and more diverse labor markets than those residing in areas outside of the MSAs. The impact of living with one of Georgia's MSAs on employment and earnings is also examined in this report. 2 The Consumer Price Index is based on the cost of a standard "basket" of goods and provides an indicator of changes in the cost of living. It is calculated by the U.S. Department of Labor, Bureau of Labor Statistics and is available at their website at http://www.bls.gov. 3 "Average Weekly Earnings of Production Workers," U.S. Department of Labor, Bureau of Labor statistics at http://www.bls.org. 4 Information on Georgia's 2003 MSAs was obtained from the Carl Vinson Institute of Government, University of Georgia at http://www.cviog.uga.edu. 4 The TANF Leaver Population Leaver Characteristics This report focuses on adult TANF recipients who left TANF during the period from 2000 through 2003. The demographic characteristics of these leavers are shown in Table 1, below. The number of leavers increased as the total number of families receiving assistance increased, but leaver characteristics remained highly consistent over time. Table 1 Leaver Characteristics by Annual Leaver Cohort Characteristic Number of Leavers Women Median Age Black White Other Married, Living Together Never Married Divorced, Separated, Widowed Average Number of Dependent Children Median Age of Youngest Child High School Graduate Median Accrued Lifetime Limit Months Resides in MSA Annual Leaver Cohort 2000 2001 2002 2003 33,407 32,359 35,566 39,836 96% 96% 95% 95% 27 76% 24% 1% 7% 71% 22% 2.1 27 74% 24% 1% 7% 70% 23% 2.0 27 72% 26% 2% 8% 69% 23% 1.9 27 72% 26% 2% 8% 69% 23% 2.0 3 2 2 2 60% 58% 58% 59% n.a. 13 13 13 71% 71% 72% 73% Characteristics of Recidivists One reason why the cohorts are similar is that there is considerable overlap between them. During the period from January 2000 through December 2003, 111,889 adult recipients left TANF. Of these, 78 percent appeared in only one for the four annual leaver cohorts. The remaining 22 percent were members of at least one other leaver cohort. Table 2 compares the characteristics of those who left in 2003, based on the number of annual leaver cohorts in which they appeared since 1997. The differences between those who appeared in only one cohort and those who appeared in three or more cohorts are striking. Those who appeared repeatedly in the leaver population are older, and have more and older 5 children. They are less likely to be or to have been married, less likely to have graduated from high school, and more likely to be black. They are less likely to live in an MSA. Table 2 2003 Leaver Characteristics by Number of Cohorts in which Leaver Appeared Since 1997 Characteristic Percentage of Leavers Median Age Women High School Graduate Married, Living Together Never Married Divorced, Separated, Widowed Ave. Number of Children Median Age of Youngest Child Black White Other Resides in MSA Number of Cohorts 1 2 3 or More 54% 27% 19% 26 27 28 92% 98% 99% 61% 11% 66% 23% 1.7 58% 6% 72% 22% 2.1 56% 4% 75% 21% 2.4 2 65% 32% 3% 74% 3 78% 21% 1% 73% 4 86% 14% 0% 70% Long-Term Recipients Patterns of TANF receipt vary widely. The majority of leavers received TANF for two years or less and did not return. However, some recipients leave and returned to TANF repeatedly, while others receive TANF steadily over a period of years before leaving. Therefore, the characteristics of those who appear in multiple cohorts reflect the TANF recidivist population, but not necessarily the population of long-term recipients. Table 3 compares leaver characteristics by number of tracked TANF months. It is based on leavers from the 2003 cohort since that cohort includes those leavers who received TANF the longest before they left. The majority of the 2003 leavers were in no immediate danger of reaching their lifetime limits. Seventy-two percent left TANF with fewer than 25 accrued lifetime limit months. These leavers were younger, had fewer and younger children, were more likely to be married or to have been married, and were more likely to have graduated from high school than those who left after accruing more than two years of lifetime limit months. 6 Clearly, those who remained on TANF longer were more disadvantaged with regard to their ability to support their families more children, less education, and less apparent connection to the fathers of their children. In addition, they were more likely to have received mental health, substance abuse, or rehabilitation services while on TANF. In general, longer term recipients were more likely to have exited from and returned to TANF in the past. Table 3 2003 Leaver Characteristics by Accrued Lifetime Limit Months Characteristic Percentage of Leavers Median Age Women High School Graduate Married, Living Together Never Married Divorced, Separated, Widowed Ave. Number of Children Median Age of Youngest Child Black White Other Resides in MSA Received Mental Health, Substance Abuse, or Rehabilitation Services Median Leaver Cohorts Since 1997 Accrued Lifetime Limit Months 1 12 13 24 25 36 37 48 49 84 48% 24% 13% 10% 5% 26 26 27 28 30 91% 97% 98% 99% 99% 62% 12% 63% 25% 59% 7% 72% 21% 57% 4% 74% 22% 52% 3% 80% 17% 46% 2% 84% 14% 1.7 1.9 2.2 2.5 2.8 2 62% 35% 3% 2 75% 24% 1% 3 83% 16% 1% 3 91% 9% 0% 4 94% 6% 0% 73% 71% 70% 74% 82% 6% 7% 8% 8% 16% 1 2 2 3 3 Recipients may only remain on TANF after reaching the 48-month State lifetime limit if they receive a waiver from their county TANF program. Just four urban counties Fulton, Richmond, Dougherty, and Muscogee accounted for 63 percent of all the 2003 leavers who had received TANF for more than 48 months, although together these large counties served just 27 percent of the 2003 leaver population. Predictors of Number of Accrued Lifetime Limit Months Because of the inter-relationships between leaver characteristics, Table 3 does not make it clear whether each of the observed differences is important in understanding those most at risk of becoming long-term TANF recipients. Table 4 shows the results of the linear regression of key 7 leaver characteristics on number of accrued lifetime limit months.5 Each of these characteristics makes a statistically significant contribution to accounting for accrued lifetime limit months, and together they account for 22 percent of the variance in number of accrued months across the 2003 leavers. That percentage is substantial, but it also points to the importance of other, unknown factors and individual differences. Table 4 Predicting Accrued Lifetime Limit Months from 2003 Leaver Characteristics Model (Constant) B* -2.730 Standard Error .395 T Significance -6.907 .000 Age .179 .014 13.154 .000 Male -8.323 .338 -24.639 .000 Black 6.061 .171 35.440 .000 High School Graduate -3.180 .296 -21.886 .000 Married, Together -1.994 .296 -6.747 .000 Never Married Mental Health, Substance Abuse, or Rehabilitation Services Number of Children 4.618 5.738 4.288 .190 24.343 .000 .276 20.825 .000 .067 63.979 .000 Age of Youngest Child .418 .021 19.478 .000 * Unstandardized regression coefficient The value of "T" is indicative of the relative magnitude of the effect of each variable, given the presence of all of the other variables in the equation. The value of "B" is the weight by which each factor is multiplied in order to predict number of lifetime limit months. In the case of dichotomous variables such as high school graduate, "yes" has a value of one and "no" has a value of zero. Variables within this model can be understood as, for example, "when all of these variables are taken into consideration together, each child in the grant adds 4.288 months to a recipient's predicted accrued lifetime limit months at exit" or "when all of these variables are taken into consideration together, never having been married increases a recipient's predicted accrued months by 4.618." Within the model, the characteristic accounting for the most variation in number of accrued lifetime limit months is the number of children in the grant. Because TANF eligibility rules take number in family into consideration in evaluating income eligibility, recipients with larger families 5 Residing in an MSA was also tested, but did not make a significant, independent contribution to accounting for number of tracked months. 8 can earn more without becoming ineligible. As a practical matter, the more children recipients have, the more they must earn to support their families and the more complex the problems they must resolve in order to be able to go to work. Both factors eligibility and feasibility probably contribute to keeping larger families on TANF longer. Racial Differences and Factors Contributing to Dependency Differences between racial groups among the 2003 TANF leavers suggest differences in the factors contributing to welfare dependency. (See Table 5.) Number of children and age of the youngest child are similar among black, white, and other leavers. However, white leavers and members of other racial groups were less likely to have graduated from high school and white leavers were more likely to have received mental health, substance abuse, or rehabilitation services than members of any other group. On the other hand, black leavers were much less likely to be married and more likely to never have been married than white and other leavers. Table 5 2003 Leaver Characteristics by Racial Group Characteristic Percentage of Leavers Median Age Women High School Graduate Married, Living Together Never Married Divorced, Separated, Widowed Ave. Number of Children Median Age of Youngest Child Mental Health, Substance Abuse, or Rehabilitation Services Median Accrued Months Racial Group Black White 72% 26% 26 28 97% 90% 61% 4% 80% 16% 2 55% 20% 42% 38% 2 4 5 5% 13% 16 8 Other 2% 29 91% 52% 18% 56% 26% 2 4 4% 7 Figure 3 looks more closely at the relationship between race, marriage, and accrued lifetime limit months. While never having been married was associated with a moderate increase in number of accrued lifetime limit months for white leavers and members of "other" racial groups, it was linked to a very substantial increase for black leavers. The reason for this difference is not clear. It is not associated with differences in receipt of child support, since very few of the never-married recipients received child support, regardless of their racial group. 9 Median Accrued Months Figure 3 Accrued Months by Marital Status and Race 20 15 10 5 0 Married, Together Never Married Marital Status Black White Other Other 10 Patterns of Employment and Recidivism in the First Year after Exit The TANF work requirements, combined with lifetime limits on receipt of benefits, reflect a belief that most recipients can make the transition to steady employment, capable of supporting themselves and their families, within the benefit period. The employment, earnings, and recidivism of TANF leavers over the first year after they leave TANF reveal the efforts of former recipients to meet the challenge set by TANF policy, and the extent to which they are successful. It is not clear to what extent adult recipients leave TANF because of employment. However, UI wage data tell us the percentage of leavers who had earnings during the quarter in which they left. That percentage declined substantially over the period covered by this report. Employment rates in the exit quarter for 2000 though 2003 were: 2000 2001 2002 2003 62% 61% 56% 54% This decrease cannot be explained by the presence of longer-term recipients in the later annual cohorts. While those who have exceeded their lifetime limits have relatively low employment rates in their exit quarters, they make up a small percentage of leavers. Among the 2003 leavers who had earnings in their exit quarters, 45 percent worked in service industries and 40 percent worked in retail trade. Over half of those employed in retail trade worked in eating and drinking establishments. The industries in which TANF leavers work are discussed in detail in "Industries Employing TANF Leavers," page 24. Table 6 Employment and Return to TANF in the First Year after Exit by Annual Leaver Cohort Employment/Return Group 2000 2001 2002 2003* Employed, Did not Return 54% 52% 50% 49% Employed, Returned 21% 22% 20% 20% Not Employed, Returned 5% 7% 7% 8% Neither Employed nor Returned 20% 20% 22% 23% Total Employed 75% 74% 71% 69% Total Returned 26% 29% 28% 28% *Based on the 10,291 2003 leavers for whom a full year of follow-up data is available. 11 Table 6, above, looks at employment and return to TANF in the first year following exit for the leaver cohorts from 2000 through 2003. Over this period, the percentage of leavers who were employed during the year (i.e. had earnings in at least one of the four quarters following their exit from TANF) decreased from 75 to 69 percent. The 2003 leavers were the first annual cohort since 1997 in which fewer than half the leavers were employed and did not return to TANF. In 2000 and 2001, an increase in recidivism mirrored the decrease in employment. However since 2002, when recipients began to reach the 60-month Federal lifetime limit, recidivism decreased slightly and the number of leavers who were neither employed nor returned to TANF increased. Outcomes by Number of Accrued Lifetime Limit Months The effect of lifetime limit policies on recidivism can be seen in Table 7. This table presents data on employment and return to TANF by number of accrued TANF months for those who left TANF in 2002, the most recent cohort for which a full year of follow-up data is available. Among the 2002 leavers, the employment rate was substantially lower for those who had received TANF for more than 48 months. Recidivism was highest for those with 25 to 36 accrued months. Those who had reached the State or Federal lifetime limits had the lowest recidivism rates in spite of the fact that relatively few were employed. The percentage of leavers who neither worked nor returned to TANF was much higher for those who had exceeded either lifetime limit than for any other group. We do not know what those who were not found in either the Georgia unemployment insurance records or the TANF rolls were doing. They may have married and stayed home with their children, depended on family members, moved out of Georgia, received disability payments, worked in a neighboring state, or held a job that was not covered by unemployment insurance. However, the high proportion of these leavers among those who left TANF after receiving TANF for more than 48 months points to a group of leavers who were unable to make a successful transition off welfare within the time allowed by TANF. Table 7 Employment and Recidivism in the First Year after Exit by Number of Tracked TANF Months among 2002 Leavers Employment/Return Group Percentage of Leavers Employed, Did not Return Employed, Returned Not Employed, Returned Neither Employed nor Returned Total Employed Total Returned 1 - 12 50% 53% 18% 6% 23% 71% 24% 13 - 24 23% 49% 24% 8% 19% 73% 32% 25 - 36 13% 44% 28% 10% 18% 72% 38% 37 - 48 10% 47% 22% 9% 22% 68% 31% 49 - 72 5% 46% 9% 8% 36% 56% 18% 12 Until they approach their lifetime limits, longer-term recipients who leave TANF are more likely to return to TANF than those who have received benefits for fewer months. The reason for this pattern may be seen in Table 8, which presents data on employment and earnings in the first year after exit by number of accrued lifetime limit months. Most leavers do not work steadily in the first year after they leave TANF, so they may experience periods of TANF eligibility. On average, however, longer-term recipients earn less when they work and so are more likely to return. The plight of those who have reached their lifetime limits, most of whom are unable to return to TANF, is very clear in Table 8. They work less, they earn less when they work, and their incomes are very low. Very few have average monthly earnings in the first year following exit from TANF that exceed the TANF Gross Income Ceiling, the basis for determining income eligibility for TANF. Table 8 Employment and Earnings in the First Year after Exit by Number of Accrued Lifetime Limit Months among 2002 Leavers Employment and Earnings Ave. Quarters Worked (All) Employed in All Quarters Average Quarterly Earnings in Quarters Worked Ave. Annual Earnings (Employed Only) Ave. Monthly Earnings above TANF Gross Income Ceiling6 (All) 1 - 12 13 - 24 25 - 36 37 - 48 49 - 72 2.1 2.1 2.1 1.9 1.5 34% 33% 32% 27% 19% $2,635 $2,342 $2,121 $1,973 $1,526 $7,872 $6,926 $6,156 $5,463 $4,717 24% 21% 16% 11% 6% Those Who Return to TANF The majority of TANF leavers work during at least one quarter in the year following their exit from TANF. Among those who are employed, most do not return. However, those who do reflect the tension inherent in TANF the need to work, the difficulty of sustaining employment over time, and approaching lifetime limits. Employed leavers who do and do not return to TANF can be compared in two respects their characteristics and their employment experiences. Table 9 compares the characteristics of the 2002 leavers who were employed during the first year after they left TANF based on whether or not they returned to TANF during that year. Those who returned to TANF were younger but had accrued more lifetime limit months. They were less likely to have graduated from high school and to be or have been married. 6 See Appendix A. 13 Those employed leavers who did not return to TANF worked more quarters, earned more in the quarters in which they worked, and had annual earnings that were, on average, more than twice as high as the earnings of those who returned to TANF. A majority of the employed leavers who did not return to TANF had earnings in all four quarters of the first year following exit from TANF. (See Table 10.) Table 9 Characteristics of 2002 Leavers Employed in the First Year After Exit by Recidivism Status* Characteristics Returned Did Not Return Percentage of Employed Leavers 29% 71% Women 99% 95% Median Age Black White Other Married, Living Together Never Married Divorced, Separated, Widowed Ave. Number of Dependent Children 25 83% 16% 1% 4% 78% 18% 2.0 27 72% 26% 2% 8% 69% 23% 2.0 Median Age of Youngest Child 2 2 High School Graduate 55% 63% Median Accrued Lifetime Limit Months 15 11 Resides in MSA 71 71 * Based on 25,091 2002 leavers employed in the first year following exit. 14 Table 10 First Year Earnings and Quarters Worked by Recidivism Status: Employed 20010 Leavers Outcome Quarters Worked: One Two Three Four Average Earnings in Quarters Worked Average Annual Earnings Returned Did Not Return 24% 25% 24% 28% $1,535 $3,916 14% 16% 18% 53% $2,705 $8,372 Labor Force Attachment Labor force attachment is the strength of a worker's connection to the workforce. Figure 4 Number of quarters worked is an indicator of labor force attachment, with more quarters $3,500 indicative of steadier employment. Higher earnings promote labor force attachment by motivating and supporting continued $3,000 employment. In turn, as workers remain in the workforce, their earnings increase. $2,500 Average Quarterly Earnings The relationship between labor force attachment and earnings is seen in Figure 4, $2,000 which shows average quarterly earnings by number of quarters worked for employed 2002 leavers who did, and did not, return to $1,500 TANF. In both groups, average quarterly earnings increased as number of quarters of $1,000 employment increased. However, the rate of increase was substantially higher for those Returned No who did not return to TANF. $500 Yes 1 2 3 4 Another way of understanding the role of Quarters Employed earnings in sustained employment is by looking at the relationship between employment and earnings in one quarter and employment in the next quarter. The experience of the 2002 leavers in the third and fourth quarters after they left TANF is typical. Among those who were employed in the third post-exit quarter, 83 percent were also employed in the fourth quarter, while only 16 percent of those who were not employed in the third quarter were employed in the fourth. But among those who were employed in the third post exit quarter, those who earned more were more likely to work in the fourth quarter as 15 well. (See Figure 5.) At the very lowest earning levels, the probablility of subsequent employment was less than 60 percent, but for those who earned $2,400 or more, it was over 90 percent. For those earning $6,100 or more in the third post-exit quarter, the predicted probability of employment in the fourth post-exit quarter was essentially 100 percent. Both local labor market conditions and what workers have to offer affect the price they can get for their labor. Table 11 shows average annual earnings by quarters worked, high school graduation, and residence within or outside an MSA. Figure 5 Table 11 Average Annual Earnings by Quarters of Employment, High School Graduation and MSA Residence* Quarters of Employment High School Graduate MSA Non-MSA Non-Graduate MSA Non-MSA One $1,073 $1,107 $825 $775 Two $3,239 $2,968 $2,329 $2,289 Three $6,352 $5,627 $4,765 $4,775 Four $13,073 $11,431 $9,961 $9,637 * Based on the 25,901 2002 leavers who were employed in the first year following their exit from TANF. The importance of working steadily is seen across all groups. Those who worked four quarters had average annual earnings that were more than 12 times higher than the average annual earnings of those who worked only one quarter. In general, those who lived in one of the state's MSAs earned more than those living in rural areas. Regardless of where they lived, high school graduates earned more than those who did not have a high school diploma. Overall, average earnings in the first year after exit among those who were employed were $2,837 higher for high school graduates than for non-graduates. 16 Longer Term Outcomes Building economic stability and well-being is a gradual process. Longer term outcomes provide evidence of the extent to which leavers are or are not improving their circumstances and becoming more self-sufficient. In addition, longer term outcomes provide evidence of the effects of economic conditions on the employment and earnings of TANF leavers. Table 12 Employment, Earnings and Recidivism by Annual Leaver Cohort and Post-Exit Year* Outcome 2000 2001 2002 2003 First Year Employed in at Least One Quarter 75% 74% 71% 69% Employed in All Four Quarters 38% 35% 32% 31% Ave. Annual Earnings (Employed Only) $7,199 $7,097 $7,083 $7,072 Ave. Earnings per Quarter Worked $2,350 $2,384 $2,107 $2,117 Returned to TANF 27% 29% 28% 28% Ave. Months on TANF (Returned Only) 5.3 5.4 5.4 5.3 No Known Outcomes 20% 20% 22% 23% Second Year Employed in at Least One Quarter 68% 66% 65% Employed in All Four Quarters 34% 32% 31% Ave. Earnings (Employed Only) $7,880 $7,913 $8,039 Ave. Earnings per Quarter Worked $2,272 $2,301 $2,337 Returned to TANF 29% 30% 29% Ave. Months on TANF (Returned Only) 6.3 6.3 6.1 No Known Outcomes 24% 25% 26% Third Year Employed in at Least One Quarter 63% 63% Employed in All Four Quarters 32% 30% Ave. Earnings (Employed Only) $8,500 $8,274 Ave. Earnings per Quarter Worked $2,440 $2,398 Returned to TANF 26% 25% Ave. Months on TANF (Returned Only) 6.3 6.2 No Known Outcomes 28% 29% * For cohorts 2001 to 2003, the most recent data shown are for leavers who left TANF between January and March of the cohort year, as these are the only cohort members for whom complete data are available. 17 Table 12 compares employment, earnings, and recidivism across three annual cohorts and three post-exit years. In the first and second year following exit, more recent cohorts had lower employment rates. Within each annual leaver cohort, the average annual earnings of employed leavers increased over time, but within post-exit years, the earnings of those who were employed did not show consistent improvement across cohorts. Recidivism remained relatively consistent over time, with a modest peak in the second year following exit. Employment Comparison of employment rates across post-exit years is complicated by the fact that over time, more former recipients are likely to have moved out of Georgia. Increasing percentages of leavers for whom no outcomes are known in each successive post-exit year supports the hypothesis that the available leaver population shrinks over time. Nevertheless, a substantial proportion of the decreasing employment rates can be attributed to the effects of the economic downturn that began in the first quarter of 2001. The downturn had an immediate effect on employment rates across all cohorts. Table 13 Quarterly Employment Rates by Exit Cohort and Post-Exit Quarter Leaver Cohort N Exit Qtr Post-Exit Quarter 1st 2nd 3rd 4th 5th 6th 7th 8th 9th 10th 11th 12th 20001 9,243 61% 63% 58% 58% 55% 54% 53% 51% 49% 51% 49% 48% 46% 20002 8,595 64% 62% 60% 55% 55% 53% 52% 49% 50% 50% 49% 46% 47% 20003 7,852 62% 63% 58% 57% 55% 53% 51% 52% 51% 49% 47% 48% 48% 20004 7,717 61% 60% 56% 54% 52% 49% 51% 49% 48% 46% 46% 46% 47% 20011 8,961 60% 60% 55% 53% 50% 52% 50% 48% 47% 48% 46% 47% 46% 20012 8,579 61% 60% 54% 50% 52% 50% 49% 46% 48% 48% 47% 46% 20013 7,627 61% 60% 55% 55% 53% 52% 49% 49% 49% 49% 47% 20014 7,192 61% 58% 57% 54% 52% 50% 50% 48% 49% 47% 20021 8,864 54% 57% 53% 51% 49% 49% 48% 48% 47% 20022 9,399 57% 55% 52% 49% 49% 48% 49% 46% 20023 8,869 57% 56% 52% 51% 49% 50% 48% 20024 8,434 56% 53% 52% 50% 50% 48% 20031 10,291 51% 53% 51% 50% 48% 20032 10,089 54% 53% 51% 49% 20033 9,679 55% 55% 51% 20034 9,777 55% 53% Note: Shaded cells contain data for the first quarter of 2001 the first quarter of the economic downturn. Boxed cells contain data for the first quarter of 2004. That effect can be seen in Table 13, which presents quarterly employment rates by quarterly leaver cohort and post-exit quarter. In this table, employment rates for the first quarter of 2001 are shaded. Figures below the shaded cells reflect employment taking place after the downturn began. The most recent quarter of earnings displayed is the first quarter of 2004. In spite of the fact that economic conditions had begun to improve by that time, there was no corresponding improvement in the employment of Georgia's TANF leavers. In fact, employment rates were consistently the same or lower than they had been a year earlier. 18 Earnings The pattern of leavers' earnings over time is mixed. The average quarterly earnings of employed leavers by exit cohort and post exit quarter are shown in Table 14. The columns in this table show earnings at the same point relative to exit, across quarterly leaver cohorts. These columns show modest improvement from early to later cohorts.7 For example, comparing the average quarterly earnings for the first post-exit quarter for leavers from comparable quarters of 2000 and 2003, the average increase is only 4 percent. However, during the period from 2000 through 2003, the average weekly wages on non-farm workers increased from $480.41 to $517.36 an increase of 8 percent.8 Table 14 Average Quarterly Earnings of Employed Leaver by Quarterly Leaver Cohort and Post Exit Quarter Leaver Cohort 20001 20002 20003 20004 20011 20012 20013 20014 20021 20022 20023 20024 20031 20032 20033 20034 1st $2,186 $2,195 $2,374 $2,211 $2,231 $2,172 $2,404 $2,208 $2,281 $2,221 $2,395 $2,239 $2,274 $2,264 $2,506 $2,288 2nd $2,321 $2,378 $2,318 $2,317 $2,318 $2,387 $2,347 $2,396 $2,363 $2,398 $2,304 $2,370 $2,391 $2,513 $2,366 3rd $2,463 $2,304 $2,400 $2,387 $2,479 $2,313 $2,465 $2,485 $2,590 $2,342 $2,435 $2,549 $2,610 $2,347 4th $2,391 $2,409 $2,483 $2,548 $2,373 $2,422 $2,560 $2,702 $2,511 $2,494 $2,545 $2,712 $2,455 Post-Exit Quarter 5th 6th 7th 8th $2,492 $2,552 $2,689 $2,600 $2,488 $2,642 $2,560 $2,649 $2,667 $2,569 $2,641 $2,703 $2,476 $2,572 $2,629 $2,783 $2,516 $2,533 $2,672 $2,594 $2,489 $2,640 $2,555 $2,614 $2,716 $2,614 $2,704 $2,778 $2,590 $2,660 $2,783 $2,949 $2,593 $2,691 $2,851 $2,675 $2,549 $2,743 $2,547 $2,774 $2,597 $2,562 9th $2,665 $2,699 $2,883 $2,665 $2,671 $2,687 $2,976 $2,763 10th $2,749 $2,883 $2,796 $2,782 $2,776 $2,871 $2,795 11th $2,889 $2,719 $2,868 $2,850 $2,933 $2,680 12th $2,787 $2,802 $2,922 $3,072 $2,725 On the other hand, the rows in Table 14 show that those TANF leavers who were employed made steady progress over time. That is, the more time that had elapsed since a cohort had left time, the higher its average quarterly earnings. For example, among the employed 2000 leavers, the increase in average quarterly earnings from the first to the third post-exit years averaged 20%. This increase far exceeded increases in both average wages and the cost of living for the period. Movement out of Poverty The effect of these patterns on the ability of Georgia's leavers to support their families can be seen by comparing their earnings to the Federal Poverty Guidelines, which are keyed to family 7 Because leaver's earnings show seasonal effects, generally peaking in the third quarter of the year, comparisons across years should be made between the same quarters of each year. 8 "Average Weekly Earnings of Production Workers," U.S. Department of Labor, Bureau of Labor statistics at http://www.bls.org. 19 size and adjusted annually for increases in the cost of living. Table 15 shows the percentage of employed leavers with annual earnings above the Federal Poverty Guidelines across five annual cohorts and four post-exit years. Within each annual leaver cohort, the percentage of leavers employed within the post-exit year who had annual earnings above the Federal Poverty Guidelines increased over time. But within post-exit years, the percentage of employed leavers with annual earnings that exceed the Poverty Guidelines has decreased with each successive cohort. Clearly, more recent leavers are not doing as well as earlier leavers in keeping up with the increasing cost of living and lifting their families out of poverty. Table 15 Percentage of Employed Leavers with Annual Earnings in Excess of Federal Poverty Guidelines Leaver Cohort 1997 1998 1999 2000 2001 2002 First 18% 15% 14% 14% 13% 13% Post-Exit Year Second Third 24% 29% 20% 23% 18% 20% 17% 19% 17% Fourth 31% 24% 23% The increased average earnings of employed leavers over time are due to the fact that those who worked steadily made substantial progress. The 2000 leaver cohort illustrates the importance of stable employment in moving out of poverty. Over the three yearperiod following exit, 83 percent of cohort members worked in at least one quarter, and 18 percent worked in every quarter. (See Figure 6.) As in the first year following exit, those who worked more quarters had higher average quarterly earnings and therefore much higher average earnings over the entire three-year period. (See Table 16.) While 12 percent of all 2000 leavers had earnings over the Poverty Guidelines for their family size in the third year following exit, 43% of those who had worked in every quarter had third-year Cumulative Percentage Figure 6 Total Quarters on Employment: 1st through 3rd Post-Exit Years 100% 80% 60% 40% 20% 0% 0 1 2 3 4 5 6 7 8 9 10 11 12 Quarters of Employment 20 earnings above the Poverty Guidelines. Because average earnings were higher for leavers who resided in counties within the state's MSAs, a higher percentage of those who lived in MSAs (12 versus 10 percent) had earnings that exceeded the Poverty Guidelines in their third year following exit. Table 16 2000 Leavers' Average Earnings and Earnings Above the Federal Poverty Guidelines by Number of Quarters Worked Quarters Worked 0 Average Quarterly Earnings in Quarters Worked $0 Average 3-Year Earnings $0 Year 3 Earnings Exceed Poverty Guidelines 0% 1 $937 $937 <1% 2 $1,129 $2,257 <1% 3 $1,307 $3,921 1% 4 $1,404 $5,616 2% 5 $1,534 $7,669 2% 6 $1,646 $9,878 3% 7 $1,799 $12,593 4% 8 $1,981 $15,844 6% 9 $2,177 $19,597 9% 10 $2,392 $23,919 15% 11 $2,746 $30,205 22% 12 $3,552 $42,620 43% All Leavers $1,801 $16,102 12% Number of children is also an important factor in whether or not leavers achieve earnings above the Poverty Guidelines, since the poverty level increases as family size increases. This increase, of course, reflects the fact that as family size increases, so do the resources required to meet the needs of family members. Figure 7 is based on the earnings of 2000 leavers in their third year following exit and shows the relationships between number of quarters worked, number of children, and the probability that a family will have earnings that exceed the Poverty Guidelines. Very few larger families are able to make this transition within three years after leaving TANF, even with stable employment over time. On the other hand, approximately half 21 of those who have only one child and who work steadily achieve earnings above the Poverty Guidelines. 9 Dependency on Public Assistance Even if TANF leavers are no longer dependent on TANF, or eligible to receive benefits under that program, they may still be receiving other forms of public assistance. Table 17 reflects a "snapshot" of dependency, based on benefits provided in the month of June 2004. The more recent the leaver cohort was, the higher the percentage of leavers who received assistance that month. Those who were receiving Child Care Assistance generally were employed and not receiving TANF. Food Stamps and Medicaid typically occurred together. That is, if leavers received one, they generally received the other as well. While relatively few of the leavers in any cohort were receiving TANF, a substantial proportion of each cohort was dependent on other forms of assistance. Probability or Exceeding Guidelines Figure 7 Probability of Exceeding Poverty Guidelines in 3rd Year After Exit by Number of Children and Quarters of Employment 60% 50% 40% 30% 20% 10% 0% 0 1 2 3 4 5 6 7 8 9 10 11 12 Quarters Worked in Three Years Children One Two or Three Four or More Leaver Cohort 1997 1998 1999 2000 2001 2002 2003 Table 17 Receipt of Public Assistance in June 2004 by TANF Leaver Cohort TANF 4% Child Care Assistance 4% Food Stamps 39% Medicaid 39% 5% 6% 47% 47% 6% 7% 53% 53% 8% 10% 57% 58% 9% 11% 59% 62% 11% 12% 61% 65% 11% 14% 65% 71% 9 Probability of exceeding the Poverty Guidelines is based on the logistical regression of number of children (grouped data) and number of quarters worked on whether or not a leaver had 3rd year earnings above the poverty level. 22 Those who had accrued fewer lifetime limit months generally were less likely to be dependent on public assistance than those who had received TANF benefits for a longer period of time. However, looking at the 2003 leavers who have reached their lifetime limits (Table 18), we see that in June 2004 relatively few received either TANF or Child Care Assistance, presumably because they could not qualify for a waiver of the lifetime limit on TANF and few of them were employed. But proportionally more of them were receiving Food Stamps or Medicaid than were those who had accrued fewer months when they left TANF. Although no longer on TANF, the great majority of long-term recipients were still dependent on public assistance. Unfortunately, given the generally poor outcomes experienced by these leavers, their dependency is likely to continue. Table 18 Assistance Received by 2003 Leaver Cohort in June 2004 by Accrued Lifetime Limit Months Accrued Lifetime Limit Months Type of Assistance TANF Child Care Assistance Food Stamps Medicaid 1 12 13 24 25 36 37 48 49 84 9% 14% 17% 9% 5% 13% 17% 18% 13% 7% 55% 69% 76% 83% 89% 64% 74% 78% 81% 84% 23 Industries Employing TANF Leavers The UI wage record does not provide information on a worker's occupation. However, it does include the employer's Standard Industrial Classification (SIC) code. This coding system identifies industries at three levels of detail: industrial division, major industry group, and specific industry. Although SIC codes tell us where TANF leavers are working, their usefulness as an indicator of what the leavers are doing is varied. Some occupations, such as child care worker, are strongly associated with a particular industry while others, such as computer programmer, are found in many different industries. Nevertheless, industries of employment enrich our understanding of the experiences of adults who leave TANF. Table 19 shows the top ten major industry groups of the 2002 TANF leavers who were employed in the fourth quarter of their first year following exit. Together, these industry groups account for 56 percent of the 17,530 employed 2002 leavers for whom valid SIC codes are available. Table 19 2002 Leavers' Top Ten Industries of Employment Major Industry Group Eating and Drinking Places Personnel Supply Services* Percent of Total Employment 19% 9% Average Quarterly Earnings $1,676 Annual Earnings Above Poverty Guidelines 5% $2,091 12% Nursing & Personal Care Facilities 5% $2,597 13% Grocery Stores 4% $2,092 10% Department Stores 4% $2,505 15% Hospitals 3% $4,183 40% Hotels & Motels 3% $1,954 9% Elementary & Secondary Schools 3% $2,573 17% Child Day Care Services 3% $2,143 6% Miscellaneous Business Services** 2% $2,191 * Includes temporary agencies and providers of contract workers. ** Includes companies providing office cleaning and security services. 16% The list of industry groups in which TANF leavers work has remained very stable over time. In fact, the same industry groups were the "top ten" for the 2000 and 2001 leaver cohorts as well. All of these industries employ large numbers of low-skill workers. Given that full-time employment at minimum wage yields earnings of about $2,678 a quarter, it is clear that parttime or temporary employment was common within the industry groups employing the majority of TANF leavers. 24 Nine of the top ten industry groups were the same for leavers who did and did not reside within an MSA. "Miscellaneous Business Services" was replaced in the list of top ten industry groups by "Manufacturers of Meat Products" for leavers who lived in counties not located with an MSA. In each of the remaining industries, average quarterly earnings were higher for leavers who lived in an MSA. Eighteen percent of the 2002 leavers who were employed in the fourth quarter of the year following exit had earnings in that year that exceeded the Poverty Guidelines. Table 20 lists their top ten industry groups. These industry groups employed 40 percent of the 3,097 leavers with annual earnings above the Poverty Guidelines. Seven industry groups appear in both Table 19 and Table 20, suggesting diversity in the quality of employment opportunities they offer. Again, differences between those who lived within and outside the state's MSAs were small. "Manufacturers of Meat Products," "Public Safety and Order," and "Carpets and Rugs" were among the top industry groups of leavers with annual earnings above the Poverty Guidelines who resided outside of the state's MSAs, while the list for those who lived in an MSA included "Offices and Clinics of Medical Doctors," "Elementary and Secondary Schools," and "Miscellaneous Business Services." Table 20 Top Ten Major Industry Groups for 2002 Leavers with Annual Earnings Exceeding Federal Poverty Guidelines* Major Industry Group Percent of Total Employment Average Quarterly Earnings Hospitals 8% $5,763 Personnel Supply Services 6% $4,930 Eating & Drinking Establishments 5% $4,175 Nursing & Personal Care Facilities Offices & Clinics of Medical Doctors 3% $4,834 3% $5,303 Department Stores 3% $4,091 Executive & Legislative Combined** 3% $5,598 Meat Products 3% $4,695 Elementary and Secondary Schools 3% $6,102 Grocery Stores 2% $4,251 * Based on 3,097 leavers with earnings in their first year after exit that exceeded the federal poverty guidelines. ** This industry group refers to government agencies. 25 Table 21 Relationship Between Average Quarterly Earnings and Employment of Leavers Lacking a High School Diploma by Industry Group* Major Industry Groups with 75 or More Employed Leavers Average Quarterly Earnings Telephone Communication Credit Reporting & Collection Hospitals Offices & Clinics of Medical Doctors Executive & Legislative Combined Management & Public Relations Health & Allied Services Administration of Public Health Programs Individual & Family Services Meat Products Computer & Data Processing Services Colleges & Universities Residential Care Nursing & Personal Care Facilities Elementary & Secondary Schools Drug Stores & Proprietary Stores Department Stores Miscellaneous Shopping Goods Stores Women's Apparel Gasoline Service Stations Laundry, Cleaning, & Garment Services Home Health Care Services Miscellaneous Business Services Child Day Care Services Grocery Stores Personnel Supply Services Family Clothing Stores Services to Buildings Hotels & Motels Job Training & Related Services Miscellaneous Personal Services Variety Stores Eating & Drinking Places Miscellaneous General Merchandise Stores * Includes industries employing 75 or more leavers. $4,981 $4,409 $4,183 $4,089 $3,940 $3,781 $3,707 $3,425 $3,239 $3,168 $3,072 $2,981 $2,845 $2,597 $2,573 $2,531 $2,505 $2,373 $2,368 $2,360 $2,306 $2,293 $2,191 $2,143 $2,092 $2,091 $2,048 $1,993 $1,954 $1,940 $1,736 $1,682 $1,676 $1,675 Leavers Lacking a High School Diploma 18% 24% 23% 15% 22% 27% 20% 21% 20% 52% 27% 21% 34% 44% 20% 35% 33% 35% 29% 39% 45% 27% 31% 28% 45% 37% 26% 47% 48% 43% 24% 47% 49% 37% 26 Table 20 lists the major industrial groups in which 75 or more leavers were employed, with the average quarterly wage earned by the leavers working in the industry group and the percentage of those leavers who had not graduated from high school. Overall, leavers lacking high school diplomas made up 42 percent of the 2002 leavers, but only 37 percent of the leavers who were employed in the fourth quarter after exit. While there were leavers who had not graduated from high school in all of the industry groups listed in Table 21, the association between education and earning potential is clear. Generally, as average quarterly earnings decreased, the percentage of non-graduates in an industry increased. However, non-graduates made up the majority of workers in Meat Products, an industry that provided relatively high wages. Table 22 shows the number of 2002 leavers employed in each of the ten SIC industry divisions in the fourth quarter of their first year following exit. Included in this table are average quarterly earnings and the percentage of leavers with annual earnings that exceeded the Poverty Guidelines for their family size. This table summarizes information provided in Appendix B, in which all of the industries of employment are listed by major industrial group. Thirty-seven percent of the employed 2002 leavers worked in Retail Trade and forty-five percent worked in Services. Along with Agriculture, these two industry divisions had the lowest average quarterly earnings. Table 22 Employment and Earnings in the Fourth Quarter After Exit by SIC Industrial Division: 2002 Leaver Cohort Industrial Division Agriculture, Forestry & Fishing Mining Construction Manufacturing Transportation, Communications, Electric, Gas, and Sanitary Services Wholesale Trade Retail Trade Finance, Insurance, and Real Estate Services Public Administration Number Employed 122 3 204 1139 368 339 6211 381 7517 503 Average Quarterly Earnings $1,907 Annual Earnings Above Poverty Guidelines 8% $4,499 $3,874 33% 34% $3,526 33% $3,789 42% $3,185 $1,965 27% 8% $4,476 $2,634 51% 18% $3,737 40% 27 28 Appendices Appendix A TANF Gross Income Ceiling and Federal Poverty Guidelines Family Size 1 2 3 4 5 6 7 8 9 10 11 TANF Gross Income Ceiling (Monthly) $435 $659 $784 $925 $1,060 $1,149 $1,243 $1,319 $1,389 $1,487 $1,591 Federal Poverty Guidelines (Annual) 2000 2001 2002 2003 $8,350 $8,590 $8,860 $8,980 $11,250 $11,610 $11,940 $12,120 $14,150 $14,630 $15,020 $15,260 $17,050 $17,650 $18,100 $18,400 $19,950 $20,670 $21,180 $21,540 $22,850 $23,690 $24,260 $24,680 $25,750 $29,710 $27,340 $27,820 $28,650 $32,750 $30,420 $30,960 $31,550 $35,770 $33,500 $34,100 $34, 450 $38,790 $36,580 $37,240 $37,350 $41,810 $42,740 $40,380 Note: The TANF Gross Income Ceiling is established by the Georgia legislature and is one of the factors used in determining income eligibility for TANF. The Federal Poverty Guidelines are set by the U. S. Department of Health and Human Services and are used in determining eligibility for a variety of federal programs. 29 30 Appendix B Industries of Employment Industry Number Employed Average Quarterly Earnings Annual Earnings Above Poverty Guidelines Agriculture 013 Field Crops, Except Cash Grains 8 $1,794 0% 016 Vegetables & Melons 16 $1,274 6% 017 Fruits & Tree Nuts 7 $1,050 0% 018 Horticultural Specialties 17 $2,664 18% 019 General Farms, Primarily Crop 3 $1,192 0% 024 Dairy Farms 4 $3,407 25% 025 Poultry & Eggs 11 $2,680 18% 072 Crop Services 26 $804 0% 074 Veterinary Services 15 $2,497 0% 075 Animal Services, Except Veterinary 1 $3,754 0% 078 Landscape & Horticultural Services 14 $2,609 21% All 122 $1,907 8% Mining 144 Sand & Gravel 2 $2,209 0% 145 Clay, Ceramic, & Refractory Minerals 1 $9,080 100% All 3 $4,499 33% Construction 152 Residential Building Construction 27 $2,827 26% 154 Nonresidential Building Construction 15 $3,719 20% 161 Highway & Street Construction 10 $4,377 30% 162 Heavy Construction, Except Highway 22 $5,333 45% 171 Plumbing, Heating, Air-Conditioning 34 $3,928 41% 172 Painting & Paper Hanging 9 $4,845 33% 173 Electrical Work 26 $3,099 31% 174 Masonry, Stonework, & Plastering 15 $2,810 20% 175 Carpentry & Floor Work 3 $2,290 0% 176 Roofing, Siding, & Sheet Metal Work 6 $3,614 17% 177 Concrete Work 6 $4,895 50% 178 Water Well Drilling 1 $2,547 0% 179 Miscellaneous Special Trade Contractors 30 $4,562 47% All 204 $3,874 34% Manufacturing and Processing 201 Meat Products 275 $3,168 32% 202 Dairy Products 2 $4,166 50% 203 Preserved Fruits & Vegetables 7 $3,077 14% 204 Grain Mill Products 6 $1,507 0% 205 Bakery Products 27 $3,827 22% 206 Sugar & Confectionery Products 8 $1,802 0% 207 Fats & Oils 5 $6,276 40% 208 Beverages 2 $5,055 50% 209 Miscellaneous Food & Kindred Products 8 $5,141 63% 31 Industry Number Employed 221 Broadwoven Fabric Mills, Cotton 15 222 Broadwoven Fabric Mills, Manmade 1 224 Narrow Fabric Mills 1 225 Knitting Mills 18 226 Textile Finishing, Except Wool 6 227 Carpets & Rugs 62 228 Yarn & Thread Mills 49 229 Miscellaneous Textile Goods 10 Men's and Boys' Suits, Coats & 231 Overcoats 2 Men's and Boys' Furnishings & Work 232 Clothing 42 Women's, Misses' and Junior's 233 Outerwear 11 Women's, Misses', Children's & Infants' 234 Apparel 7 235 Hats, Caps, & Millinery 1 236 Girls', Children's, & Infants' Outerwear 9 238 Miscellaneous Apparel & Accessories 1 Miscellaneous Fabricated Textile 239 Products 45 241 Logging 5 242 Sawmills & Planing Mills 10 243 Millwork, Plywood & Structural Members 25 244 Wood Containers 13 245 Wood Buildings & Mobile Homes 15 251 Household Furniture 9 252 Office Furniture 2 254 Partitions & Fixtures 1 259 Miscellaneous Furniture & Fixtures 2 261 Pulp Mills 3 263 Paperboard Mills 1 265 Paperboard Containers & Boxes 7 Miscellaneous Converted Paper 267 Products 17 Newspapers: Publishing or Publishing & 271 Printing 54 Periodicals: Publishing or Publishing & 272 Printing 1 275 Commercial Printing 13 278 Blankbooks & Bookbinding 5 282 Plastics Materials & Synthetics 2 283 Drugs 5 284 Soap, Cleaners, & Toilet Goods 3 285 Paints & Allied Products 1 286 Industrial Organic Chemicals 2 287 Agricultural Chemicals 8 Average Quarterly Earnings $3,306 $2,457 $1,913 $3,540 $3,302 $4,673 $4,497 $3,650 Annual Earnings Above Poverty Guidelines 33% 0% 0% 28% 17% 53% 67% 40% $1,388 0% $2,353 12% $1,891 9% $2,448 $2,176 $1,965 $894 14% 0% 0% 0% $2,857 $1,703 $4,253 $3,882 $2,558 $3,522 $2,729 $4,535 $5,721 $4,729 $10,249 $4 $5,058 20% 0% 40% 28% 23% 33% 11% 50% 0% 100% 100% 0% 57% $3,404 18% $2,177 13% $3,189 $4,377 $2,283 $5,099 $3,642 $2,567 $2,788 $1,744 $3,784 0% 38% 60% 50% 60% 0% 0% 50% 25% 32 Industry Number Employed 289 Miscellaneous Chemical Products 5 295 Asphalt Paving & Roofing Materials 2 301 Tires & Inner Tubes 3 306 Fabricated Rubber Products 6 308 Miscellaneous Plastics Products 45 316 Luggage 11 322 Glass or Glassware, Pressed or Blown 2 323 Production of Purchased Glass 1 325 Structural Clay Products 2 327 Concrete, Gypsum, & Plaster Products 8 328 Cut Stone & Stone Products 1 Miscellaneous Nonmetallic Mineral 329 Products 4 332 Iron & Steel Foundries 6 335 Nonferrous Rolling & Drawing 7 336 Nonferrous Foundries (Castings) 3 341 Metal Cans & Shipping Containers 3 342 Cutlery, Handtools, & Hardware 2 344 Fabricated Structural Metal Products 6 346 Metal Forgings & Stampings 4 347 Metal Services 10 348 Ordnance & Accessories 1 349 Miscellaneous Fabricated Metal Products 5 351 Engines & Turbines 3 352 Farm & Garden Machinery 21 353 Construction & Related Machinery 1 354 Metalworking Machinery 1 355 Special Industry Machinery 1 356 General Industrial Machinery 2 357 Computer & Office Equipment 1 358 Refrigeration & Service Machinery 22 359 Industrial Machinery 5 362 Electrical Industrial Apparatus 1 363 Household Appliances 53 364 Electric Lighting & Wiring Equipment 6 367 Electronic Components & Accessories 12 Miscellaneous Electrical Equipment & 369 Supplies 2 371 Motor Vehicles & Equipment 20 372 Aircraft & Parts 3 373 Ship & Boat Building & Repairing 9 379 Miscellaneous Transportation Equipment 4 381 Search & Navigation Equipment 1 384 Medical Instruments & Supplies 6 394 Toys & Sporting Goods 1 395 Pens, Pencils, Office, & Art Supplies 2 Average Quarterly Earnings $5,169 $8,117 $9,260 $5,433 $3,894 $2,836 $6,770 $1,718 $6,710 $3,969 $803 Annual Earnings Above Poverty Guidelines 80% 50% 67% 50% 38% 9% 100% 0% 50% 50% 0% $5,930 $7,377 $5,533 $5,231 $6,113 $6,251 $4,198 $5,200 $3,617 $4,724 $3,843 $5,066 $2,877 $4,514 $4,265 $2,762 $3,003 $4,077 $4,433 $4,143 $5,355 $2,532 $5,398 $1,854 100% 83% 71% 67% 67% 100% 17% 75% 30% 100% 0% 67% 19% 100% 100% 100% 50% 100% 41% 60% 100% 9% 67% 25% $5,093 $4,537 $12,128 $3,031 $3,917 $3,162 $5,295 $1,019 $3,293 50% 65% 100% 11% 75% 0% 50% 0% 50% 33 Industry Number Employed Average Quarterly Earnings Annual Earnings Above Poverty Guidelines 399 Miscellaneous Manufactures 1 $2,561 0% All 1,139 $3,526 33% Transportation, Communications, Electric, Gas, and Sanitary Services 411 Local & Suburban Transportation 57 $3,049 19% 412 Taxicabs 3 $1,492 0% 413 Intercity & Rural Bus Transportation 3 $3,208 0% 414 Bus Charter Service 1 $2,079 0% 415 School Buses 17 $2,562 12% 421 Trucking & Courier Services, Ex. Air 72 $4,072 46% 422 Public Warehousing & Storage 19 $4,121 58% 448 Water Transportation of Passengers 1 $296 0% 449 Water Transportation Services 1 $7,250 100% 451 Air Transportation, Scheduled 27 $2,653 30% 458 Airports, Flying Fields, & Services 26 $3,683 38% 472 Passenger Transportation Arrangement 18 $1,765 22% 473 Freight Transportation Arrangement 2 $4,681 0% 478 Miscellaneous Transportation Services 10 $1,706 20% 481 Telephone Communication 90 $4,981 64% 483 Radio & Television Broadcasting 7 $3,607 57% 484 Cable & Other Pay TV Services 6 $5,470 67% 489 Communication Services 1 $615 0% 492 Gas Production & Distribution 2 $7,115 100% 495 Sanitary Services 5 $7,026 60% All 368 $3,789 42% Wholesale Trade 501 Motor Vehicles, Parts, & Supplies 19 $3,209 16% 502 Furniture & Home Furnishings 8 $5,285 38% 503 Lumber & Construction Materials 10 $3,325 20% 504 Professional & Commercial Equipment 23 $4,391 52% 505 Metals & Minerals, Except Petroleum 1 $697 0% 506 Electrical Goods Hardware, Plumbing & Heating 507 Equipment 9 $2,951 12 $4,136 22% 33% 508 Machinery, Equipment, & Supplies 36 $3,501 25% 509 Miscellaneous Durable Goods 15 $3,457 33% 511 Paper & Paper Products 11 $3,708 18% 512 Drugs, Proprietaries, & Sundries 8 $2,955 63% 513 Apparel, Piece Goods, & Notions 28 $2,417 21% 514 Groceries & Related Products 49 $3,930 43% 515 Farm-product Raw Materials 15 $1,677 7% 516 Chemicals & Allied Products 7 $3,521 29% 517 Petroleum & Petroleum Products 56 $2,358 16% 519 Miscellaneous Nondurable Goods 32 $2,531 22% All 339 $3,185 27% Retail Trade 521 Lumber & Other Building Materials 57 $3,502 39% 34 Industry Number Employed Average Quarterly Earnings Annual Earnings Above Poverty Guidelines 525 Hardware Stores 5 $2,469 0% 526 Retail Nurseries & Garden Stores 3 $851 0% 527 Mobile Home Dealers 1 $809 0% 531 Department Stores 679 $2,505 15% 533 Variety Stores 146 $1,682 5% Miscellaneous General Merchandise 539 Stores 129 $1,675 4% 541 Grocery Stores 770 $2,092 10% 542 Meat & Fish Markets 8 $1,272 13% 543 Fruit & Vegetable Markets 2 $144 0% 544 Candy, Nut, & Confectionery Stores 2 $1,869 50% 546 Retail Bakeries 21 $2,147 10% 549 Miscellaneous Food Stores 4 $3,478 0% 551 New & Used Car Dealers 39 $4,191 46% 552 Used Car Dealers 17 $4,106 53% 553 Auto & Home Supply Stores 49 $3,307 31% 554 Gasoline Service Stations 234 $2,360 10% 555 Boat Dealers 1 $2,245 0% 557 Motorcycle Dealers 1 $3,654 0% Men's and Boys' Clothing & Accessory 561 Stores 5 $3,301 0% 562 Women's Clothing Stores 57 $2,189 12% 563 Women's Accessory & Specialty Stores 4 $6,095 50% 564 Children's and Infants' Wear Stores 6 $1,110 0% 565 Family Clothing Stores 121 $2,048 8% 566 Shoe Stores Miscellaneous Apparel & Accessory 569 Stores 33 $2,022 15 $1,605 15% 0% 571 Furniture & Home Furnishings Stores 37 $3,100 27% 572 Household Appliance Stores 4 $2,528 0% 573 Radio, Television, & Computer Stores 26 $2,541 27% 581 Eating & Drinking Places 3383 $1,676 5% 591 Drug Stores & Proprietary Stores 89 $2,531 13% 592 Liquor Stores 17 $1,975 6% 593 Used Merchandise Stores 33 $2,076 6% 594 Miscellaneous Shopping Goods Stores 110 $2,373 20% 596 Nonstore Retailers 57 $2,020 5% 598 Fuel Dealers 3 $6,459 33% 599 Retail Stores, Not Elsewhere Classified 43 $2,283 19% All 6,211 $1,965 8% Finance, Insurance, and Real Estate 601 Central Reserve Depository 2 $6,910 50% 602 Commercial Banks 52 $3,957 48% 603 Savings Institutions 2 $5,368 100% 606 Credit Unions 9 $5,286 89% 609 Functions Closely Related To Banking 20 $4,121 55% 35 Number Industry Employed Federal & Federally-Sponsored Credit 611 Agencies 3 614 Personal Credit Institutions 34 615 Business Credit Institutions 9 616 Mortgage Bankers & Brokers 32 621 Security Brokers & Dealers 1 628 Security & Commodity Services 1 631 Life Insurance 13 632 Medical Service & Health Insurance 34 633 Fire, Marine, & Casualty Insurance 17 635 Surety Insurance 3 641 Insurance Agents, Brokers, & Service 61 651 Real Estate Operators & Lessors 38 653 Real Estate Agents & Managers 36 654 Title Abstract Offices 1 655 Subdividers & Developers 7 671 Holding Offices 3 679 Miscellaneous Investing 3 All 381 Services 701 Hotels & Motels 508 721 Laundry, Cleaning, & Garment Services 127 722 Photographic Studios, Portrait 14 723 Beauty Shops 60 726 Funeral Service & Crematories 2 729 Miscellaneous Personal Services 83 731 Advertising 11 732 Credit Reporting & Collection 75 733 Mailing, Reproduction & Commercial Art 25 734 Services to Buildings 305 Miscellaneous Equipment Rental & 735 Leasing 18 736 Personnel Supply Services 1650 737 Computer & Data Processing Services 83 738 Miscellaneous Business Services 388 751 Automotive Rentals, No Drivers 17 752 Automobile Parking 17 753 Automotive Repair Shops 25 754 Automotive Services, Except Repair 29 762 Electrical Repair Shops 7 769 Miscellaneous Repair Shops 3 783 Motion Picture Theaters 13 784 Video Tape Rental 32 792 Producers, Orchestras, Entertainers 5 793 Bowling Centers 2 794 Commercial Sports 3 Average Quarterly Earnings Annual Earnings Above Poverty Guidelines $4,599 $4,415 $6,421 $5,317 $5,858 $6,434 $4,717 $5,355 $6,169 $5,313 $3,223 $4,141 $4,655 $11,650 $3,291 $4,814 $1,949 $4,476 67% 56% 78% 66% 100% 100% 23% 74% 71% 33% 30% 42% 50% 100% 43% 33% 0% 51% $1,954 $2,306 $2,106 $2,602 $7,261 $1,736 $3,090 $4,409 $4,560 $1,993 $3,515 $2,091 $3,072 $2,191 $3,302 $2,809 $4,284 $2,323 $4,582 $4,189 $1,360 $1,897 $3,712 $1,834 $1,272 9% 16% 7% 20% 50% 6% 18% 59% 56% 9% 22% 12% 24% 16% 35% 18% 28% 3% 43% 33% 8% 13% 40% 0% 0% 36 Number Industry Employed Miscellaneous Amusement, Recreation 799 Services 53 801 Offices & Clinics of Medical Doctors 235 802 Offices & Clinics of Dentists 43 803 Offices of Osteopathic Physicians 2 804 Offices of Other Health Practitioner 20 805 Nursing & Personal Care Facilities 811 806 Hospitals 593 807 Medical & Dental Laboratories 23 808 Home Health Care Services 166 809 Health & Allied Services 121 811 Legal Services 26 821 Elementary & Secondary Schools 507 822 Colleges & Universities 155 823 Libraries 4 824 Vocational Schools 28 829 Schools & Educational Services 7 832 Individual & Family Services 173 833 Job Training & Vocational Rehabilitation 139 835 Child Day Care Services 485 836 Residential Care 156 Social Services, Not Elsewhere 839 Classified 31 841 Museums & Art Galleries 2 861 Business Associations 2 862 Professional Membership Organizations 2 863 Labor Organizations 5 864 Civic & Social Associations 42 866 Religious Organizations 4 Membership Organizations, Not 869 Elsewhere Classified 2 871 Engineering & Architectural Services 13 872 Accounting, Auditing, & Bookkeeping 52 873 Research & Testing Services 8 874 Management & Public Relations 88 881 Private Households 17 899 Services, Not Elsewhere Classified 3 All 7,517 Public Administration 911 Executive Offices 2 912 Legislative Bodies 1 913 Executive & Legislative Combined 212 919 General Government 39 921 Courts 7 922 Public Order & Safety 58 931 Finance, Taxation, & Monetary Policy 6 Average Quarterly Earnings Annual Earnings Above Poverty Guidelines $2,610 $4,089 $4,643 $3,437 $3,355 $2,597 $4,183 $4,274 $2,293 $3,707 $5,149 $2,573 $2,981 $3,042 $2,483 $3,635 $3,239 $1,940 $2,143 $2,845 $2,750 $5,323 $3,813 $5,020 $105 $1,855 $1,894 $2,589 $4,042 $2,938 $4,576 $3,781 $3,039 $1,841 $2,634 19% 43% 56% 50% 40% 13% 40% 52% 12% 34% 69% 17% 24% 0% 18% 29% 29% 9% 6% 20% 13% 50% 50% 50% 0% 7% 0% 50% 46% 15% 50% 38% 24% 0% 18% $790 $6,286 $3,940 $3,252 $3,776 $5,005 $2,689 0% 0% 43% 33% 57% 55% 33% 37 Number Industry Employed 941 Admin. of Educational Programs 8 943 Admin. of Public Health Programs 114 944 Admin. 9 951 Environmental Quality 14 953 Housing & Urban Development 15 962 Regulation, Admin. of Transportation 12 Regulation Miscellaneous Commercial 965 Sectors 2 971 National Security 4 All 503 Other 999 Nonclassifiable Establishments 178 Average Quarterly Earnings $2,708 $3,425 $1,629 $2,457 $2,834 $4,532 Annual Earnings Above Poverty Guidelines 25% 37% 11% 14% 13% 50% $3,946 $2,716 $3,737 50% 25% 40% $2,882 12% 38