Welfare Reform in Iowa: Mathematica Report Notes Some Success in Raising Employment, Earnings

6/11/2002

From: Thomas Fraker, 202-484-4698, e-mail: tfraker@mathematica-mpr.com Joanne Pfleiderer, 609-275-2372, e-mail: jpfleiderer@mathematica-mpr.com, both of Mathematica

WASHINGTON, June 11 -- Welfare reform in Iowa succeeded in getting welfare recipients into training and then into jobs, according to a new report from Mathematica Policy Research, Inc. However, the reforms did not always succeed in raising family income and may have reduced it for some families. Furthermore, researchers noted negative impacts on some measures of family and child well-being, including less marriage among those who started receiving welfare after the reforms started.

Researchers used random assignment to follow two groups-those participating in Iowa's welfare reform program and those participating in the traditional welfare program-for up to six years. Comparisons were made separately for 1) those on welfare when the reforms started in 1993, and 2) those who started receiving welfare while the reforms were in progress. The study found the following impacts of welfare reform:

-- Participation in training and receipt of employment-related services increased by 6 to 7 percentage points.

-- Over the short term, employment and earnings increased. For the group on welfare when the reforms began, longer-term impacts on earnings were also noted for household heads, with earnings on the principal job 10 percent higher. This increase was accompanied by reductions in cash assistance and food stamp benefits, indicating greater levels of self-sufficiency.

-- For those who entered welfare after the reforms began, total household income at the end of the follow-up period, including earnings from all household members, decreased by about $200 a month. Participation rates in Medicaid and subsidized housing rose.

-- Participation in welfare increased slightly for both groups in the short run, as more generous earnings disregards made it possible for more cases to remain on assistance while employed. Welfare participation remained elevated at the end of the follow-up period for those who started receiving assistance after the reforms began.

-- The impact on marriage was negative for women who started receiving welfare after the reforms began and were not married when they applied for assistance. Those in the welfare reform program were 8 percent less likely than those in the traditional program to be married at follow-up, and they experienced more instability in their relationships. Researchers also noted negative impacts on some measures of family and child well-being, such as financial strain, doubling up of households, domestic abuse, and school engagement of children.

Thomas Fraker, lead author of the report and a senior fellow at Mathematica, notes, "This study has shown that policies aimed at moving families from welfare to work have succeeded and are helping them to achieve a modest level of economic improvement. However, it may be appropriate for policymakers to focus on initiatives related to improving family stability. In particular, it will be important to consider how the study's findings may inform the ongoing debate about strengthening low-income families and promoting healthy marriage."

In this evaluation, over 17,000 Iowa families were randomly assigned to a treatment group that received assistance under reform policies or to a control group that received assistance under the pre-reform policies of the former AFDC program. Mathematica researchers then estimated the impacts of welfare reform by comparing the average outcomes of the two groups in the years after random assignment. The researchers analyzed data from state administrative files on all of the families in the evaluation, from a survey of a random sample of 2,951 of those families, and from a supplemental survey of 1,475 families with children of elementary school age. The Iowa Department of Human Services and the Administration for Children and Families, U.S. Department of Health and Human Services, provided funding for the study.

The report, "The Evaluation of Welfare Reform in Iowa," by Fraker, Christine Ross, Rita Stapulonis, Robert Olsen, Martha Kovac, Robin Dion, and Anu Rangarajan, is available at http://www.mathematica-mpr.com/PDFs/iowawelreport.pdf. For printed copies, contact Publications at 609-275-2350, or email jallen@mathematica-mpr.com.

Mathematica, a nonpartisan research firm, conducts policy research and surveys for federal and state governments, foundations, and private-sector clients. The employee-owned company, with offices in Princeton, N.J., Washington, D.C., and Cambridge, Mass., has conducted some of the most important studies of welfare, health care, education, employment, nutrition, and early childhood policies and programs in the U.S. Mathematica strives to improve public well-being by bringing the highest standards of quality, objectivity, and excellence to bear on the provision of information collection and analysis to its clients.

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