Employment, Earnings, and Recidivism among Georgia's TANF Leavers: Findings from the TANF Follow-Up System Georgia Department of Human Resources D i i i of Family and Children Services January, 2003 Acknowledgments This report was prepared by Nancy Bross under contract to the Georgia Department of Human Resources. She would like t o 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 Overview of TANF Leavers and their Outcomes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 Outcomes in the First Year Following Exit: Losing Ground . . . . . . . . . . . . . . . . . . . . . 11 . Longer Term Outcomes: Continuing Established Trends . . . . . . . . . . . . . . . . . . . . . . 1 9 Leavers' Families and Poverty . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25 Industries Employing TANF Leavers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29 . . Appendix A: TANF Income Ceiling and Federal Poverty Number in Family . . . . . . . . . . . . . . . . . . . Guidelines . . . . . . . . by . . . . . . . . . . . . . . . . A-i Appendix B: Industry of Employment in the 4thQuarter After Exit for 2000 Leavers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-iii Executive Summary The TANF Follow-Up System tracks the employment, earnings, and recidivism (i.e. return t o TANF) of adults leaving TANF. It uses administrative data from the Department of Human Resources' management information system for TANF and the Georgia Department of Labor's Unemployment Insurance (UI) wage record files. Population of TANF Leavers The TANF Follow-Up System now includes over 148,000 adult recipients who left TANF during the period from January 1997 through December 2001. The earliest leavers were older, and had older and fewer children, than subsequent leavers, but in recent years, the population has stabilized. The median age of 2001 leavers was 27. They had an average of 2 children, and the median age of their youngest child was 2. Fifty-eight percent were high school graduates - a small decrease from the percentage of graduates in the previous t w o annual cohorts. Data available beginning with the 2001 leavers enable us t o look at the relationship between number of i3.XXUed lifetime limit months and leaver characteristics. ("Accrued lifetime limit months" refers t o the number of benefit months a recipient has accumulated toward the State limit of 48 months and the Federal limit of 6 0 months.) The median number of accrued months among the 2001 leavers was 13, and 7 0 percent had accrued fewer than 25 months. Long-term recipients were very different from those who had accrued relatively few months. They were older, had more children and older children, were more likely t o be black and to live in an urban county, and were much less likely t o have graduated from high school. Changing Economic Environment The economic downturn which began early in 2001 resulted in substantial job loss in Georgia. In the first quarter of 2001, the number of Georgians filing new claims for unemployment insurance was 67 percent higher than it had been in the first quarter of the previous year. In June 2001, the number of households receiving TANF began t o rise, and has continued t o do so. Employment During the period from 1 9 9 7 through 2000, quarterly employment rates among adult leavers were highly consistent both over time and across exit cohorts, leveling off at 56 t o 59 percent around the fifth quarter after exit. Over the period from January 2001 through March 2002, employment rates in the third through sixteenth post-exit quarters dropped t o between 48 and 50 percent across all cohorts. It is estimated that about 10,000 fewer leavers were employed by the end of March 2002 as a result of the economic downturn. There is some evidence that the declining employment rate was due more t o a reduction in the ability of those who were not working t o get jobs rather than t o increased loss of employment by those who had jobs. While the percentage of leavers employed in at least one quarter of their first year following exit remained in the range of 7 4 t o 77 percent, the number employed in all four quarters of that year decreased from 43 percent among 1997 leavers t o 3 4 percent among those who left during the first quarter of 2001. Employment rates in the second through fourth years following exit declined with each successive cohort, consistent with decreases in the first year following exit. Earnings Within exit cohorts, the average quarterly earnings of those who are employed continued t o increase over time. That is, the longer it had been since a cohort left TANF, the higher its average quarterly earnings. Among the early leavers, average quarterly earnings increased by about $1,000 over a four-year period. Average quarterly earnings for the same post-exit quarter have remained about the same across all exit cohorts. That is, those who left in 2000 did not make any more at a comparable point in time than those who left in 1997. While the downturn does not appear to have had a significant effect on the average quarterly earnings of those who are still employed, decreased quarters of employment meant that the average annual first-year earnings of employed leavers went below $7,000 for the first time. As earnings increase, so does the probability of continued employment. About 9 0 percent of those with earnings equivalent t o full time employment at minimum wage - about $2,678 - in one quarter will be employed in the next quarter. Recidivism Although recidivism rates continue t o decrease over time within exit cohorts, they have increased steadily across exit cohorts since the Follow-Up Study began. Twenty percent of the 1997 leavers returned to TANF in their first year following exit from TANF, compared to twenty-nine percent of the 2000 leavers. The majority of the 2000 leavers who returned to TANF during their first year after exit had been members of previous exit cohorts. Their characteristics are similar t o those of the longer-term recipients identified in the 2001 annual cohort. It appears that increasing recidivism rates are due, in part, t o repeated, failed attempts by long-term recipients t o become self-supporting before reaching their lifetime limits. Among the 2000 leavers, the average annual earnings of those who worked and did not return t o TANF were $8,433 - $2,935 more than those who returned for just one quarter and more than twice the average annual earnings of all those who returned t o TANF. Labor Force Attachment "Labor force attachment" refers t o the strength of an individual's connection t o the workforce, and it is a key concept in understanding the outcomes of TANF leavers. Number of quarters worked - either in a single year or across multiple years - is a measure of labor force attachment. Among the 2000 leavers who worked in the first year following exit, those who worked in all four quarters earned more than twice as much as those who worked in three quarters, and twelve times as much as those who worked in only one quarter. Among the 1997 leavers, only 15 percent did not have any earnings reported t o the UI system during the four years after they left TANF. The median number of quarters of employment was 11, and 20 percent had earnings in all 1 6 quarters. Fifty-six percent of those who worked in all sixteen quarters had annual earnings in the fourth year following exit that exceeded the Federal Poverty Guidelines for their family size, compared t o thirty-one percent of all employed 1997 leavers. Number of quarters of employment in the first year after exit is a strong predictor of employment and earnings in subsequent years. Eighty-eight percent of the 1997 leavers who worked in all four quarters of their first year following exit worked in their fourth year following exit, with average annual earnings of $11,404. Education High school graduates were much more likely t o be employed in all four quarters of their first year after exit. Specifically, 4 2 percent of the 2000 cohort's graduates were employed in all four quarters, compared with 31 percent of the non-graduates. Among the 2000 leavers with earnings in their first year following exit, the high school graduates earned an average of $2,738 more than the non-graduates. Earnings Above the Federal Poverty Guidelines Earnings relative t o the Federal Poverty Guidelines, which increase as family size increases, provide a good indicator of how well employed leavers are doing in meeting their families' needs. Within exit cohorts, the percentage of leavers with earnings above the poverty guidelines increases over time. For example, among the 1997 leavers, 18 percent of those who were employed had earnings that were above the poverty guidelines in the first year following exit. That number increased t o 31 percent in the fourth year following exit. Because the poverty guidelines are increased annually t o reflect increases in the cost of living, earnings relative to the poverty guidelines provide a good basis for comparing buying-power across cohorts. Although more recent cohorts have earned about the same as earlier cohorts at comparable points in time, their buying power has eroded. That is, earnings by successive cohorts have not kept up with increases in the cost of living, and the percentage of leavers with earnings that exceed the Federal Poverty Guidelines has decreased. This erosion in buying power is probably due in large part to the fact that the minimum wage has not increased with the cost of living. The ability of TANF leavers to achieve earnings above the poverty guidelines is strongly related t o family size. Among the 1997 employed leavers, 3 6 percent of those with families with fewer then 4 members had annual earnings that exceeded the poverty guidelines, compared with 16 percent of those with 4 t o 6 family members and 3 percent of those with 7 or more family members. With sufficient labor force attachment, the prospects that leavers with one or t w o children will work their way out of poverty are good. For those with large families, however, this goal is essentially out of reach. Industries of Employment Fifty-seven percent of the 2000 leavers employed in the fourth quarter after exit worked in just ten industries. These industries, which were topped by eating and drinking establishments, personnel supply services, and nursing and personal care facilities, appear t o be characterized by part time employment and low wages. A number of the same industries appeared on the list of top ten industries for 2 0 0 0 leavers with earnings above the poverty level, suggesting that they offer a diversity of opportunities. Thirty-five percent of the 2000 leavers worked in wholesale and retail trade - the major industrial classification with the lowest average quarterly earnings. Among the industry groups employing large numbers of leavers, earnings were best in manufacturing and processing, where 29 percent of workers had annual earnings above the poverty level. Introduction Georgia began implementation of Temporary Aid for Needy Families (TANF) on January 1, 1997. With TANF came more stringent work requirements for welfare recipients, a lifetime limit on receipt of welfare payments, and an end to the concept of entitlement. The Georgia Department of Human Resources (DHR) established the TANF Follow-Up System t o track the employment, earnings, and recidivism of adults leaving TANF. This report summarizes the post-TANF outcomes of over 148,000 adults who left TANF during the period from 1997 through 2001. Methodology The TANF Follow-Up System is a data base containing information on adult recipients from closed TANF cases. It matches DHR data on TANF recipients t o quarterly earnings data from the Georgia Department of Labor. Identifying Adult Leavers. The event that triggers inclusion in follow-up is case closure. In fact, 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 t w o successive months. Recipients are added t o the 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. Only those adults who were actually TANF recipients (i.e. included in the TANF grant) are addressed in this report. Excluded are adults who received a benefit on behalf of a dependent child but who did not, themselves, receive a benefit under TANF. Also excluded are other adult household members not included in 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 are likely t o be ideal for research purposes. Data on recipients, households, and status at case closure for 1997 come from DHR's PARIS system. During 1998, DHR made a gradual transition t o SUCCESS, its new management information system. Consequently, data for 1998 come from both systems. SUCCESS expanded the scope of data available for future research and evaluation. However, data for 1997 and 1998 are limited t o informationcommon t o both systems. Additional data elements were added in March 2000. Data on employment and earnings come from the 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. UI earnings data provide a low-cost way of tracking employment over time. However, they have t w o 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 t o a neighbor, the resulting earnings are unlikely t o be reported t o 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 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 1997 though 2001. However, post-exit earnings data are only available through the first quarter of 2002. Leavers are considered to have been employed in a particular quarter if they had reported earnings for that quarter. However, no information is available on wage levels, number of hours worked, or whether employment was continuous. Data on recidivism come from PARIS and SUCCESS files of active TANF recipients. This report includes data on recidivism through September 2002. However, the process of capturing data on recidivism did not begin until October, 1997. Consequently, recidivism data for the earliest leavers are not complete. In general, data are organized by quarterly exit cohorts. Sixteen quarters of follow-up data are available for the first exit cohort (January through March, 1997), but only one quarter of earnings data is available yet for the last (October through December, 2001). O v e ~ i e wof TANF Leavers and their Outcomes Welfare Dependency in a Changing Economy. From 1997 through 1999, the number of Georgia households receiving TANF declined rapidly, as monthly counts of closed cases exceeded the number of new cases being opened. (See Figure 1.) This pattern reflected the combined effects of the provisions of wel- fare reform and a strong economy. That is, Figure 1 as TANF policy promoted work over depend- Actiie TANF Cases: 1997 to 2001 ency, the economy provided opportunities 120,0001 I for employment. In 2000, monthly cases counts leveled off, with the number of households coming into TANF balancing the number of households leaving TANF. How- ever, beginning early in 2001, the number of households receiving TANF began t o in- crease. In November 2002, the number of households receiving TANF reached a level last seen in June 1999. The increase in households receiving TANF coincided with an economic downturn that caused substantial job loss here in Georgia. ZQWJ - JAN 97 JAN sa JAN 9s JAN m AN 01 JANE JULW JULS JULW JULW JULOl JULU2 Month The effects of changing economic conditions on Georgia's workforce can be seen in the substantial and sustained increase in the number of Georgians filing new claims for unemployment insurance. Workers are eligible for unemployment insurance when they loose jobs in UI-covered employment through no fault of their own. Figure 2 shows total new UI Figure 2 New Georgia UI Claims by Quarter claims by quarter over the period from January 2000 through September 2002. The number of new claims was 67 percent higher I in the first quarter of 2001 than it had been a year earlier, and new claims remained at a very high level through the first quarter of 2002 - the most recent quarter of data avail- able for use in this report. While the numbers of new claims were somewhat lower in the second and third quarters of 2002, they have remained well above the 2000 levels. Since January 2001, Georgia's TANF leavers have 2 0 0 0 ~ Z W W ~ 2001~2 2 0 ~ztmct2~ faced the challenge of supporting themselves and their families in an economy characterized YearlQuarler by substantial and continuing job loss. The Leaver Population. The earliest leavers were, on average, older, and had both fewer and older children. Proportionally more of the early leavers were white, and resided in suburban counties. Although data on the educational levels of the earliest leavers are not available, the percentage of leavers who have graduated from high school decreased from 1999 through 2001. (See Table 1, below.) Table 1 Characteristics of Adult TANF Leavers by Year Characteristic Number of Leavers Women Median Age White Black Other Minority Urban Suburban Rural Average Number of Dependent Children Median Age of Youngest Child High School Graduates 1997 1998 1999 2000 2001 42,094 42,963 38,244 32,761 31,773 96.1% 96.5% 95.4% 96.1% 95.9% 29 28 28 2 7 27 30.6% 67.4% 2.0% 25.0% 73.3% 1.7% 22.7% 75.6% 1.6% 23.8% 75.5% .7% 24.4% 74.4% 1.1 % 32.7% 28.9% 38.5% 36.1 % 26.4% 37.5% 38.1 O h 23.4% 38.5% 38.8% 21.2% 40.0% 38.3% 22.3% 39.4% 1.8 2.0 2.2 2.1 2.0 4 4 3 3 2 --- --- 61.2% 59.6% 58.1 % With the 2001 leavers, we can, for the first time, look at the relationship between number of TANF lifetime limit months accrued and demographic characteristics.' (See Table 2.) "Accrued lifetime limit months" refers t o the number of benefit months a recipient has accumulated toward the State limit of 48 months and the Federal limit of 6 0 months.' Lifetime limit months may be accrued over a continuous period or across multiple "spells" of TANF receipt. Therefore, the fact that leavers have, for example, accrued 15 benefit months does not mean that they received TANF continuously over a 15-month period. Rather, it means that they received benefits for a total of 15 months over the period from January 1997 t o the month in 2001 in which they left TANF. ' Data on number of accrued lifetime limit months are based on 26,220 adults who left TANF from March through January 2001. These data are not available for those who left in January and February of that year. Exemptions from the lifetime limits may be granted for reasons such as domestic violence or the need t o complete a work or training plan. Table 2 Characteristics of 2001 Adult TANF Leavers by Total Beneffl Months Characteristic Percentage of Leavers Women Two-Parent Households Median Age White Black Other Minority Urban Suburban Rural Average Number of Dependent Children Median Age of Youngest Child High School Graduates 1-12 48.0% 92.7% 4.7% 26 35.2% 62.9% 1.9% 29.4% 29.2% 41.4% 1.8 2 60.7% 13- 24 22.5% 97.8% 1.2% 27 21.5% 77.3% 1.2% 38.7% 21.4% 39.9% 2.0 2 60.2% 25-36 12.9% 98.9% .5% 27 12.5% 86.8% .7% 45.8% 15.6% 38.5% 2.3 3 55.7% 37-48 10.6% 99.2% .2% 28 7.6% 91.9% .6% 53.6% 12.6% 33.8% 2.6 3 49.4% 49-60 6.0% 99.3% .3% 32 6.4% 93.3% .3% 62.0% 9.8% 28.1 % 2.7 5 45.9% Leavers who had accumulated a high number of lifetime limit months were very different from those who left after receiving benefits for relatively short periods. Long-time recipients were older, less likely to be members of two-parent households, and much more likely t o be black and to live in urban counties. They had more children, and their youngest children were, on average, older. Fewer than half of those who had accrued 37 or more months had graduated from high school. However, the median number of accrued months was 13, and 7 0 percent of the 2001 leavers had accrued 24 or fewer months. Only 6 percent of the leavers had reached or exceeded the State lifetime limit of 48 months. Unfortunately, we do not have data on outcomes by accrued lifetime limits yet. Overview of Quarterly Outcomes. Tables 3 through 5 present outcomes by exit cohort and post-exit quarter. An exit cohort is a group of individuals who left TANF during the same time period. Post-exit quarters are consecutively numbered quarters following exit from TANF. They allow comparability of outcomes across exit cohorts because they refer t o a uniform length of time since the quarter in which the cohorts left. In each table, outcomes occurring since January 2001 are shaded to highlight patterns occurring since the 2001 economic downturn. Employment. Table 3 shows employment rates, by quarterly exit cohorts, over 1 6 quarters. During the period from 1997 through 2000, employment rates among adult leavers were highly consistent over time and across cohorts. During that period, 5 8 t o 6 5 percent of all leavers were employed during their exit quarters - the quarter in which they left TANF. In subsequent quarters, employment rates declined slightly, leveling off about the 5th quarter after exit in the range of 56 t o 59 percent. Employment rates were unaffected by seasonal variation. However, over the period from January 2001 through March 2002, employment rates in the 3rdthrough the 16th post-exit quarters dropped t o between 48 and 5 0 percent across all cohorts. Looking within exit cohorts, employment rates generally decreased by about 7 percentage points. The estimated effect of this decrease is that approximately 10,000 fewer leavers were employed by the end of March 2002 as a result of the economic downturn. Earnings. Average quarterly earnings among those who were employed are shown in Table 4. Within a post-exit quarter, average earnings were generally consistent across exit cohorts. However, within each exit cohort, earnings increased steadily as length of time since exit increased, except that modest dips were consistently experienced in the first calendar quarter of each year. (This seasonal dip accounts for the small decrease in average earnings between the t w o most recent quarters shown.) Over the four-year period following exit, average quarterly earnings within exit cohorts typically increased by about $1,000. Among those who were employed, the economic downturn appeared t o have had little or no effect on average quarterly earnings. Obviously, however, it has had a very substantial effect on the total earnings of the leaver population. Recidivism. Recidivism rates (Table 5) are the other side of employment and earnings, as those who cannot sustain themselves and their families through employment return t o welfare dependency. Within post-exit cohorts, recidivism rates were consistently lowest in the 1" post-exit quarter, peaked in the 3rdor 4thquarters following exit, and then gradually declined over time. Small increases in recidivism were seen in the third and fourth calendar quarters of 2001, but the effects of the economic downturn on recidivism appear t o be relatively modest. However, unlike employment and earnings, recidivism was not consistent across cohorts within post-exit quarters. Rather, recidivism rates have increased steadily with each new exit cohort since the TANF Follow-Up Study began. L Table 3 Employment Rates by Exit Cohort and Post-Exit Quarter Exit Cohort No. of ' Adult Leavers Jan - Mar '97 8939 Apr - Jun'97 . 12918 Jul- Sep '97 9387 Oct - Dec '97 10850 Jan - Mar '98 11231 Apr - Jun '98 11824 Jul- Sep '98 10623 Oct - Dec '98 9285 Jan - Mar '99 11678 Apr - Jun '99 10485 Jul- Sep '99 Oct - Dec '99 Jan - Mar '00 - Apr Jun '00 Jul - Sep '00 - 0ct Dec '00 - Jan Mar '01 - Apr Jun '01 8390 7691 9243 8595 7852 7717 8961 8579 Jul- Sep '01 0ct - Dec '01 7627 7192 Employment Rates Post-Exit Quarter 1st 2nd 3rd 4th 5th 6th 7th 8th 9th 10th 1l t h 12th 13th 14th 15th 16th 63% 63% 59% 58% 57% 59% 58% 58% 57% 57% 57% 56% 57% 57% 56% 56% 55% 65% 62% 60% 58% 60% 59% 58% 57% 58% 57% 58% 57% 58% 57% 57% 55% 54% 65% 63% 60% 60% 59% 59% 57% 58% 57% 57% 58% 58% 57% 57% 55% 55% 54% 65% 62% 61% 60% 60% 58% 59% 58% 58% 58% 58% 57% 57% 55% 54% 54% 53% I 61% 64% 60% 60% 57% 58% 58% 57% 58% 58% 57% 57% 55% 54% 54% 52% 50% 63% 62% 60% 57% 58% 57% 57% 57% 58% 56% 56% 54% 54% 53% 52% 49% 64% 63% 58% 59% 58% 57% 57% 57% 57% 57% 55% 55% 54% 52% 49% 65% 61% 60% 58% 58% 57% 58% 57% 56% 55% 54% 53% 57% 50% 61% 63% 59% 59% 58% 59% 57% 57% 55% 54% 53% 52% 49% 63% 62% 59% 58% 58% 57% 57% 54% 54% 53% 52% 49% 64% 64% 61% 60% 58% 58% 56% 55% 54% 52% 50% 65% 64% 61% 59% 57% 56% 56% 55% 53% 50% 1 61% 63% 58% 58% 55% 55% 53% 51% 49% 64% 62% 60% 56% 65% 53% 52% 48% 62% 63% 59% 57% 55% 53% 50% 61% 60% 56% 54% 52% 49% I 60% 60% 55% 53% 50% 61% 60% 54% 49% 61% 60% 54% 61% 58% L Table 4 Average Earnings among Employed Leavers by Post-Exit Quarter Exit Cohort Jan-Mar's7 1st 2196 2nd 2277 3rd 2552 4th 2400 5th 2619 6th 2734 Post-Exit Quarter 7th 8th 9th 10th 3010 2733 2930 3011 1I t h 3252 12th 13th 14th 3144 3249 3289 15th 3457 16th 3390 Apr-Jun'97 Jul-Sep'97 Oct-Dec'97 Jan-Mar's8 2206 2325 2092 2185 2466 2169 2306 2294 2288 2385 2401 2562 2514 2484 2748 2327 2610 2726 243 2502 2891 2525 2660 2625 2603 2709 2733 2844 2836 2853 2919 2736 2935 2978 2839 2844 3104 2875 2945 2919 3022 3009 3025 3122 3142 3084 3165 3060 3189 3263 3152 3116 3366 3190 3221 3139 3286 3262 3252 3357 3380 3280 3420 I 3215 Apr-Jun'98 - J u l - S e p ' 9 8 Oct-Dec'98 2155 2397 2074 2416 2185 2339 2177 2352 2371 2370 2447 2584 2485 2629 2497 2654 2555 2620 2566 2672 2701 2659 2759 2838 2744 2946 2739 2911 2840 2820 2824 2879 2875 2911 2940 3137 - 2946 3150 3043 3055 2939 3029 Jan-Mar'99 2184 2319 2518 2450 2531 2597 2770 2724 2827 2869 3016 2928 Apr-Jun'99 2166 2371 2319 2454 2531 2677 2649 2706 2795 2973 2823 Jul-Sep'99 2356 2273 2435 2540 2730 2687 2744 2799 2941 2826 Oct-Dec'99 2149 2351 2421 2641 2537 2620 2684 2883 2756 Jan- Marl00 2186 2321 2463 2391 2492 2552 2689 2606 Apr- Jun'00 2195 2378 2304 2409 2488 2642 2561 Jul-Sep'OO 2374 2318 2400 2483 2667 2568 0ct -DeclOO 2211 2317 2387 2548 2478 I Jan - Mar '01 2232 2319 2482 2373 Apr-Jun'01 Jul - Sep '01 0ct - Dec '02 2168 2407 221 1 2385 2351 2316 .alqel!eAe IOU e$ea :VN %PS6L% 9 ' 9 l %Z'8 LO, 3aCi - 130 %O.LZ% s ' ~ L460.~1%O-OL % l ' l Z %EmLZ%8'OZ %L'8L %O'OL LO, des - inr LO, unr - JdV % P ' ~ L%S'OZ ~ 6 . 9068~.02 %P.LL %om6 %8'LL %P'8L %8'81 %PV6L%E'LL %Z'PL %8'L %6'LL %ZS81%Zm61%8'6L %Ea6L %L'LL %L'9L %Z'6 %E'8L %P'81 %L'8L %0'61 %0'6L %9'8L %9'8L %Z'L L %P'OL %Z'LL %9'LL %8'LL %9'8L %Z'81 %0'8L %6'8L %2'6L %P'9L %L'8 %Z'BL %0'91 %9'9 1 %En9L %0'91 %Z'91 %E'LL %ZmLL%8'9L %cj'El % 1'8 %E'9L % 9 ' 9 l %8'9L %Pa9L %9'9l %6'91 %Ea9L %P'LL %L'LL %Oa9L %E'PL %P'6 LO, J ~ W- uer 00,3aa - l a c 00, d e -~lnr 00, unr - J ~ V 00, JeW - uer - 66. 3aa 130 66, d a -~Inr % L'PL %P'PL %L'Pl % 9 ' 9 l %Z'SL %Ea9L %6'9L %L'9L % 1'91 %0'91 %9'91 %L'9L %9'6 %9'EL %6'EL %E'PL %L'PL %O't 1 %6'EL % 1'91 %8'9 1 %L'9 1 %9'9 L %0'9L %9'9L %P'PL %P'8 %8'LL %ZmZ1%L'ZL %&'El %Z'&L %L'EL %9'EL %P'PL %8'P1 %E'PL %4'9L %9'9L %9'9L %0'9L %8'OL 66, unr - JdV 66, JeW - uer 86, 3aCl - 130 %L'ZL %Z'ZL %9'ZL %L'ZL %E'ZL 9/06-11 %G'ZL %P'EL %9'EL %8'EL %E'PL %L'PL %9'PL %O'PL %Z'PL %O'L 86, daS - lnr %9'LL % Z ' L L % P ' l l % O ' L L % L ' O L % P ' l l % E ' Z L % P ' Z L % 9 ' Z L % 9 ' E L % E ' P L % 9 ' P L % L ' 9 l % P ' 9 L % E ' P L % L ' 9 %9'6 %0'0L %9'6 %9'6 %9'6 %6'6 %L'OL %l'OL %O'LL %LmL1%l'ZL %L'ZL %9'EL %8'EL %6'6 %Om& % 1'6 %La8 %8'8 %0'6 969.6 %L'6 %La6 % 1'01 % Z ' l 1 %P'ZL %P'Z 1 %'EL %EmPL%Z'ZL %9'OL %0'9 86.unr-JdV 86, Jet4 - uef' - L6. 3ea $30 %Em8 %0'8 %9'8 %L'6 %Z'6 %E'6 %Z'OL %Z'LL %9'1L %P'PL %P'LL % 8 ' 9 l %S'PL %Z'PL %L'LL %E'Q L6. daS - Inr %L'9 %E'L %6'L % 1'8 %6'L %L'8 %L'6 %4'6 %E'Ol %8'ZL %8'ZL %P'ZL % L'EL %L'EL %9'ZL VN L6, unf' - JdV %0'9 969.9 %P'9 %9'9 %E'L %E'8 %9'8 %6'8 %6'6 %6'LL %6' L 1 %E'ZL %ZSEL% L'Pl VN VN , L6. JeW - uer YJ9L YJSL YJPL qEL qtZl w l 1 w O l w 6 w 8 WL 489 e9 wP pr& raven0 a!xa-)sod raven0 yx3-&sodpua aroqo3 yx3 A q sawu ws!n!p!~e~ 9 elqpl puZ 8rL aroyo3 J!X3 Outcomes in the First Year Following Exit: Losing Ground As a group, more recent TANF leavers are not doing as well as those who left in the early years of the program. In the first year following exit they are working fewer quarters, earning less money, and returning t o TANF at higher rates. This pattern continues trends reported p r e v i ~ u s l y . ~ However, these trends have been exacerbated by the changing economic climate and the failure of earnings t o keep up with increases in the cost of living. Data on the full impact of the economic downturn on employment in the first year following exit are not yet available. However, we can begin t o get a sense of its impact from the experiences of t w o groups. First, economic conditions began t o change during the first year following case closure of for those who left TANF in 2000. The later an adult left TANF that year, the more of her first postexit year took place in the changed economic environment. Second, we now have a full year of data on the adults who left TANF during the first quarter of 2001. Their outcomes provide an early indicationof the outcomes we can expect t o see for those who left during the balance of that year - a time when job loss continued at high levels and the number of households receiving TANF increased. The Relationship Between Employment and Recidivism. Most of those who returned t o TANF in the first year after exit worked at some time during that year. Table 6 compares leavers from 1997 through the first quarter of 2001 and shows their distribution across t w o dimensions: whether they were employed during the first year following exit and whether they returned t o TANF during that year. Table 6 Employment and Return to TANF in the First Year Following Exit Ernployment/Return Group 1997* 1998 1999 Employed, Did Not Return 60 % 59% 58% Employed and Returned 16% 17% 19% Not Employed and Returned 4% 4% 4% Neither Employed nor Returned 20% 20% 18% * Figures for 1997 are based on leavers from July through December. * * Figures for 2001 are based on leavers from January through March. 2000 54% 21O h 5% 20% 2001 * 52% 22% 7% 20% Approximately 20 percent of the leavers did not appear in either the State's UI records or the TANF rolls during the year following exit. These adults may have married and stayed home with their "Employment, Earnings, and Recidivism among Georgia's TANF Leavers: Findings from the TANF Follow-Up System." Georgia Department of Human Resources, January 2002. 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. From 1997 through 1999, another four percent returned to TANF without having worked in employment covered under the UI system. Among leavers from 2000 and 2001, that number increased - probably due to the economic downturn. The majority of leavers worked in at least one quarter of the year after they left TANF, and most did not return to TANF during that year. However, over the five annual cohorts from 1997 through the first quarter of 2001, the proportion of leavers who were employed and who returned increased from 16 to 22 percent while those who were employed and who did not return decreased from 6 0 to 52 percent. Table 7 Outcomes in the First Year Following Exit Outcome 1997 1998 1999 Employed at Exit 65% 63% 63% Employed in at Least One Quarter 75% 76% 77% Employed in All Quarters 43 % 41 % 40% Average Earnings in Quarters of Employment $2,140 $2,092 $2,119 Average Annual Earnings (Employed Only) $7,554 $7,293 $7,336 Annual Earnings above Poverty Guidelines 18% 15% 15% Returned to TANF 20% 22% 24% Average Months on TANF (Returned Only) 5.1 5.2 5.4 * Figures for 2001 based on leavers from January through March only. 2000 62% 75% 38% $2,085 2001 * 60% 74% 34% $2,045 $7,199 $6,940 12% 9% 27 % 5.3 29O h 5.5 Losing Ground. Table 7 summarizes outcomes in the first year following exit for leavers from 1997 through the first quarter of 2001. In general, those who left in 1997 experienced better outcomes than those who followed after them. Previously, we found that differences between the outcomes of the 1997 leavers and those experienced by the 1998 and 1999 leavers - and especially their higher recidivism rates - could be explained by changes in characteristics of the leaver population. While those leaving TANF in 2000 and 2001 are very similar t o those who left during the previous t w o years, they experienced a less favorable labor market in their first year following exit. The effects of economic conditions are seen most clearly in the substantial decrease in the percentage of leavers employed in all four quarters. But perhaps the most troubling changes are in the greater percentage of leavers returning t o TANF and the lower percentage with earnings that exceed the Federal Poverty Guidelines. Because the poverty guidelines are increased annually t o reflect increases in the cost of living, earnings relative t o the poverty guidelines is an important measure of the relative buying power of leaver's earnings. From 1998 through 2002, as the average first-year earnings of TANF leavers decreased, the poverty guidelines increased by $538 per family member. (See Appendix A.) Steady increases in recidivism were, perhaps, inevitable as leavers not only had less income but also could buy less with the income they had. With each successive annual cohort, Georgia's TANF leavers have lost ground in their journey out of poverty. Adults who Left TANF in 2000. Table 8 looks at those 2000 leavers who were employed in the first year after they left TANF. The relationships between sustained employment, earning level, and recidivism are very clear in this table. Only 9 percent of those who worked in just one quarter had average monthly earnings in the quarter worked that exceeded the TANF gross income ~ e i l i n gA. ~s numbers of quarters of employment increased, average monthly earnings in the quarters worked also increased, but it was only among those who had earnings in all four quarters that a majority of leavers had average monthly earnings in their quarters of employment that exceeded the TANF gross income ceiling. For the majority of all employed 2001 leavers, earned income reported t o the UI system was not high enough t o automatically disqualify them from receiving TANF. Table 8 Outcomes of 2000 Leavers Employed in the First Year Following Exit by Number of Quarters Employed Outcome Percentage of Employed Leavers Average Monthly Earnings in Quarters of Employment Average Monthly Earnings Exceeded TANF Gross Income Ceiling Average Annual Earnings Returned to TANF Average Months on TANF (Returned Only) Note: Based on 25,090 2000 employed leavers. Number of Quarters Employed in First Year Following Exit 1 2 3 4 14% 16% 19% 51 % $306 $436 $578 $931 9% $918 40% 6.2 15% $2,613 41 YO 5.7 24 % 55% $5,198 $1 1,167 38 % 1790 4.8 4.2 The TANF gross income ceiling, which is keyed t o family size, is the maximum amount of income a Georgia family may have and retain eligibility for TANF benefits. Table 9 compares demographic characteristics of employed 2000 leavers by number of quarters of employment. Only t w o characteristics were related t o number of quarters worked. That is, the percentages of black adults and high school graduates increased as number of quarters of employment increased. Table 9 Characteristics of 2000 Employed Leavers by Quarters of Employment in the First Year Following Exit Characteristic Quarters of Employment 1 2 3 Median Age 26 26 26 Average Number of Children 2.2 2.2 2.2 Median Age of Youngest Child 2 2 2 Race Black White Other 73% 26 % < 1% 75% 24%