Temporary Assistance for Needy Families (TANF): Welfare-to-Work Revisited

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Temporary Assistance for Needy Families

(TANF): Welfare-to-Work Revisited

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Specialist in Social Policy

September 11, 2014

Congressional Research Service

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R42767

Temporary Assistance for Needy Families (TANF): Welfare-to-Work Revisited

Summary

One of the central features of the Temporary Assistance for Needy Families (TANF) block grant

is promoting work and job preparation for parents (mostly single mothers) in families that receive

cash assistance. TANF was created in the 1996 welfare law, which was the culmination of a

decades-long evolution from providing single mothers “pensions” to permit them to stay home

and raise children to a program focused on work. State TANF programs were influenced by

research conducted during a period of much experimentation on welfare-to-work initiatives in the

1980s and early 1990s, which found that mandatory work requirements could reduce welfare

receipt and increase employment among single mothers.

TANF aids some of the most disadvantaged families with children. These families are in a wide

range of circumstances, and some of them are not subject to state welfare-to-work efforts. In

FY2011, about 6 in 10 TANF assistance families had “work-eligible” individuals. TANF workeligible individuals comprise in great part single mothers with young children. In FY2011, about

a third of TANF work-eligible mothers were young (under the age of 24). Additionally, 40% of all

work-eligible women lacked a high school diploma or the equivalent.

As a block grant to the states, TANF sets federal goals such as ending dependence of needy

parents on government through work and job preparation, gives states flexibility in program

design to achieve those goals, and measures the performance of states. The work requirements

that actually apply to recipients are determined by the states, not by federal rules. In FY2011,

42% (monthly average) of all work-eligible adults were either working or engaged in a job

preparation activity. The most common activity was working in a job while remaining on the

rolls. Job search and vocational educational training followed as the second and third most

common activities.

While state rules—not federal rules—determine work requirements for individual TANF

recipients, federal TANF law establishes work participation standards that apply to the states and

influence state program designs. The federal work standards are performance measures used to

assess state TANF welfare-to-work efforts. The federal TANF work standards set target

participation rates, specify activities that can be counted toward meeting the standards, and set

minimum hours of engagement per week in a month for a recipient to be considered engaged in

countable activities. The target participation rates vary by state: the statute sets a 50% standard

for all families, but the standard is reduced by credits states may earn for caseload reduction. In

FY2011, the official TANF work participation rate was 29.5%; however, all but seven states, the

District of Columbia, and Guam met their all-family work standard.

The TANF work standards date back to the 1996 law, and reflect the policy concerns and the

research on welfare-to-work programs of the time. Research on new welfare-to-work models

since the 1996 law has yielded mixed and limited results. However, some innovations in

workforce and education programs have yet to be tested within a welfare-to-work context. Policy

makers also face questions about whether the sole focus of the assessment of TANF’s success

ought to be welfare-to-work. TANF has evolved into a program where cash assistance represents

less than 30% of its funds. Policy makers thus face questions of whether consideration might be

given to developing measures and assessment of how well TANF does in meeting other goals

related to improving the circumstances of families with children.

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Temporary Assistance for Needy Families (TANF): Welfare-to-Work Revisited

Contents

Introduction...................................................................................................................................... 1

Brief History: Work Requirements and Cash Aid for Needy Families with Children ..................... 2

Welfare Reform and Research on Welfare, Dependency, and Work ................................................ 6

Research on the Duration of Welfare Receipt ........................................................................... 6

Pre-1996 Welfare-to-Work Experiments ................................................................................... 7

GAIN—Riverside (California) ............................................................................................ 7

The National Evaluation of Welfare-to-Work Strategies (NEWWS) .................................. 8

Earnings Supplement Programs .......................................................................................... 9

New Hope............................................................................................................................ 9

Post-Welfare Reform Research................................................................................................ 10

Welfare “Leaver” Studies .................................................................................................. 10

Experimental Studies......................................................................................................... 11

TANF Welfare-to-Work Provisions ............................................................................................... 12

TANF Work-Eligible Individuals................................................................................................... 14

Who Is a TANF Work-Eligible Individual? ............................................................................. 14

TANF Assistance Families With and Without Work-Eligible Individuals .............................. 14

Characteristics of TANF Work-Eligible Individuals ............................................................... 15

TANF’s Work Requirements for Work-Eligible Individuals ......................................................... 18

Federal Requirements that Apply to Individual Recipients ..................................................... 18

Employability Assessment ................................................................................................ 18

Work Within Two Years .................................................................................................... 18

Sanctions for Failure to Comply with Work Requirements .............................................. 18

Activities of TANF Work-Eligible Individuals........................................................................ 19

Working While on the TANF Assistance Rolls ....................................................................... 21

Participation of Work-Eligible Individuals by Selected Characteristics: FY2011................... 21

Trends in Work Activity .......................................................................................................... 24

Sanctions.................................................................................................................................. 25

The TANF Work Participation Standard: Measuring the Performance of State Welfare-toWork Efforts ............................................................................................................................... 27

The Numerical Participation Standard..................................................................................... 28

The Work Participation Rate ................................................................................................... 29

Families Included in the TANF Work Participation Rate .................................................. 29

Engaged in Work: Countable Activities ............................................................................ 32

Engaged in Work: Hours of Participation.......................................................................... 36

FY2011 Participation Rates............................................................................................... 43

Trends in “Effective” Work Standards and Rates, FY2002-FY2011 ....................................... 44

Trends in Effective Standards............................................................................................ 45

Trends in Work Participation Rates ................................................................................... 46

A Note on the Two-Parent Family Standard...................................................................... 47

Implications for Failing the Standard ...................................................................................... 48

The 2002-2005 TANF Reauthorization Debate ............................................................................. 48

Looking Ahead: Welfare-to-Work Issues for Congress ................................................................. 49

Changing Employment Patterns (Again): The Case of Youth ................................................. 50

Subsidized Employment .......................................................................................................... 51

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Policy Innovation..................................................................................................................... 52

Measuring State Performance .................................................................................................. 53

Conclusion ..................................................................................................................................... 55

Figures

Figure 1. TANF Assistance Families, by Family Type, FY2011 ................................................... 15

Figure 2. Work Participation of TANF Work-Eligible Individuals: FY2011 ................................. 20

Figure 3. TANF Effective (After-Credit) Work Participation Standards for FY2011 .................... 29

Figure 4. TANF Assistance Families Included and Not Included in the Work Participation

Rate: FY2011 .............................................................................................................................. 30

Figure 5. Percentage of TANF Work-Eligible Individuals Included in the Participation

Rate in TANF Work Activities: FY2011 ..................................................................................... 34

Figure 6. TANF Families Included in the Work Participation Rate, By Family Type,

FY2011 ....................................................................................................................................... 38

Figure 7. Distribution of TANF Single Parent Families Included in the TANF Work

Participation Rate by Hours of Participation in Activities and by Presence of a Child

Under Age 6 in the Family, FY2011 ........................................................................................... 40

Figure 8. Distribution of TANF Two-Parent Families Included in the TANF Work

Participation Rate by Hours of Participation in Activities, FY2011 ........................................... 41

Figure 9. Percentage of TANF Work-Eligible Individuals Included in the Work

Participation Rate Who Participated in Work- and Education-Related Activities,

FY2011 ....................................................................................................................................... 43

Figure 10. TANF Effective Work Participation Standards and Work Participation Rates,

by State, FY2011 ........................................................................................................................ 44

Figure 11. National Average TANF Work Participation Rate for All Families,

FY2002-FY2011 ......................................................................................................................... 47

Tables

Table 1. Summary Characteristics of Work-Eligible Individuals: FY2011 ................................... 16

Table 2. TANF Work-Eligible Individuals Employed or Participating in a Work or

Job Preparation Activity: by Characteristic, FY2011 ................................................................. 22

Table 3. Percentage of Cash Assistance Adults and Teen Parents Employed or Engaged in

a Work or Job Preparation Activity............................................................................................. 25

Table 4. TANF Families Sanctioned for Work, Educational, or Activity Requirements:

FY2001-FY2011 ......................................................................................................................... 26

Table 5. TANF Assistance Families Included and Not Included in the TANF Work

Participation Rate, FY2011......................................................................................................... 31

Table 6. Countable TANF Work Activities and Their Definitions ................................................. 32

Table 7. TANF Hours Requirements for the All-Family Rate and the Two-Parent Family

Rate (Excludes Special Rule for Teen Parents), by Family Type ............................................... 36

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Table 8. TANF Work Participation Among Teen Parents Included in the Participation Rate

Without a High School Diploma, by Age, FY2011 .................................................................... 39

Table 9. TANF “Core” and “Supplemental” Work Activities ........................................................ 42

Table 10. Effective TANF Work Participation Standards for All Families:

FY2002-FY2011 ......................................................................................................................... 45

Table 11. Employment Status of Young Adults (Aged 20 to 24),

Selected Years 1994-2011 ........................................................................................................... 50

Table 12. Enrollment in Educational Programs of Young Adults (Aged 20 to 24), Selected

Years 1994-2011 ......................................................................................................................... 51

Table A-1. Effective TANF Work Participation Standards for All Families by State:

FY2002-FY2011 ......................................................................................................................... 57

Table A-2. TANF Work Participation Rates by State: Official Rates (Including

Grandfathered Waivers), FY2002-FY2011................................................................................. 60

Table A-3. TANF Work Participation Rates for All Families Excluding the Effects of

Grandfathered Waivers by State: FY2002-FY2011 .................................................................... 63

Table A-4. TANF Effective Work Participation Standards and Work Participation Rates:

FY2011 ....................................................................................................................................... 66

Table A-5. TANF Families Receiving Assistance, by Type of Family and State: FY2011............ 68

Table A-6. TANF Families Receiving Assistance, by Work Participation Rate Status and

State: FY2011 ............................................................................................................................. 70

Table A-7. TANF Families Included in the Work Participation Rate, by Family Type and

State, FY2011 ............................................................................................................................. 72

Table A-8. TANF Sanctions and Sanction Rates by State: FY2011............................................... 74

Appendixes

Appendix A. Additional Tables ...................................................................................................... 57

Appendix B. Methodological Notes .............................................................................................. 77

Contacts

Author Contact Information........................................................................................................... 77

Acknowledgments ......................................................................................................................... 77

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Temporary Assistance for Needy Families (TANF): Welfare-to-Work Revisited

Introduction

One of the central features of the 1996 welfare reform law (Personal Responsibility and Work

Opportunity Reconciliation Act of 1996, PRWORA, P.L. 104-193) was its focus on requiring and

promoting work and job preparation for parents (mostly single mothers) in needy families with

children. That law created the Temporary Assistance for Needy Families (TANF) block grant, and

completed a decades-long evolution in policy, from one where cash assistance was provided to

families headed by single mothers to permit them to stay at home and care for their children to

one of encouraging and ultimately requiring work.

It is sometimes said that TANF requires adult recipients to work in exchange for their family’s

cash assistance. However, this is not what federal law says. In any given month, many recipients

work or are engaged in work-related activities; however, many are not so engaged. TANF

establishes numerical work participation performance standards that apply to a state’s total

caseload, not individual recipients, and leaves to states the decision about how to meet those

standards. It is the states that determine who is required to work or participate in activities. It is

also the states that determine the activities that meet an individual recipient’s work requirements.

TANF’s work rules generally date back to the 1996 welfare reform law, which was enacted

following a period of growth in the welfare rolls. Cash assistance caseloads increased greatly

from 1960 through the mid-1970s, ushering in a period of debate about “welfare reform.” The

caseloads again began to increase in the very late 1980s, reaching a peak of 5.1 million families

on the rolls in March 1994. Discussion of TANF work rules today is in a different context than

occurred in the late 1980s or early 1990s. The cash assistance rolls diminished greatly, and stood

at 1.9 million families in FY2011. In any given month in FY2011, state TANF welfare-to-work

efforts could touch a population of about 1.3 million adults.

This report examines the work participation standards and requirements for cash assistance

recipients of the TANF block grant, which was created in the 1996 welfare reform law.

This report

•

provides a short history of work requirements in programs that provide cash

assistance to needy families with children;

•

reviews the major studies that contribute to the knowledge of what types of

welfare-to-work programs are effective;

•

discusses the TANF work provisions that apply directly to individuals and

analyzes FY2011 data on engagement in work and work-related activities of

adults in TANF households;

•

discusses the TANF work participation standards that apply to states and analyzes

FY2011 data on participation as they relate to those standards; and

•

discusses some issues that Congress might consider in the future, such as how the

work standards can address changing circumstances and the difficulties of

measuring the performance of states in the context of a block grant.

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Brief History: Work Requirements and Cash Aid for

Needy Families with Children

In the early 20th century, prior to the enactment of a federal cash-in-aid program for families

caring for dependent children in their own homes, many states had laws providing aid to mothers

with dependent children, often called “mothers’ pensions.”1 The general purpose of these

pensions was summarized by a 1914 report published by the then-newly created Children’s

Bureau (then operating under the U.S. Department of Labor), which described the basic function

of the various state pension laws as “preventing the breaking up of the home when on account of

death or disability the support of the natural breadwinner of the family is removed.”2 By 1921, 40

states and the then-territories of Alaska and Hawaii had laws providing support for children in

their own homes.3 The intended recipients were, for the most part, widows and women whose

husbands were disabled, were imprisoned, or had deserted the family. However, restrictions on

eligibility varied by state and in some cases only widows were eligible.4

Limited state budgets meant that in many cases these early programs operated only partially or

not at all. A Missouri law of 1911 applied only to Kansas City and limited expenditures for all

pensions to $12,000 annually. In cases where funds were insufficient, a juvenile court would

select “the most urgent cases” to receive pensions.5

The Great Depression exacerbated the degree to which counties dropped or downsized their

programs, and by 1935 the number of families eligible for such aid under state laws was three

times greater than the number of families actually receiving it.6, 7 Concern over the lack of

sufficient support under state programs, as well as an increase in demand for financial help as a

result of the Great Depression, prompted President Franklin D. Roosevelt to establish by

Executive Order the Committee on Economic Security (CES) in 1934 to serve the broader

purpose of “[providing] at once security against several of the great disturbing factors in life.”

Within six months, the CES had designed a proposal for the nation’s first comprehensive federal

Prior to “mothers’ pensions” (the first of which was enacted in 1911), the most common way care was provided for

needy, dependent children was in institutions. Public sentiment began to shift toward the idea that children should be

cared for in their own homes following the first White House Conference on Dependent Children in 1909. See Jo Anne

B. Ross, Fifty Years of Service to Children and Their Families, Social Security Bulletin, October 1985/Vol. 48, No.

10., http://www.ssa.gov/policy/docs/ssb/v48n10/v48n10p5.pdf.

U.S. Department of Labor, Children’s Bureau, Laws Relating to “Mothers’ Pensions” in the United States, Denmark,

and New Zealand, Dependent Children Series, No. 1. Bureau Publication No. 7 (Washington, DC: Government

Printing Office, 1914).

Joanne L. Goodwin, ‘Employable Mothers’ and ‘Suitable Work’: A Re-Evaluation of Welfare and Wage-Earning for

Women in the Twentieth-Century United States, Journal of Social History, Vol. 29, No. 2 (Winter 1995), pp. 253-274.

U.S. Department of Labor, Children’s Bureau, Laws Relating to “Mothers’ Pensions” in the United States, Denmark,

and New Zealand, Dependent Children Series, No. 1. Bureau Publication No. 7 (Washington, DC: Government

Printing Office, 1914).

Ethel Cleland, Pensions for Mothers, The American Political Science Review, Vol. 7, No. 1 (February 1913), pp. 9698.

Joanne L. Goodwin, ‘Employable Mothers’ and ‘Suitable Work’: A Re-Evaluation of Welfare and Wage-Earning for

Women in the Twentieth-Century United States, Journal of Social History, Vol. 29, No. 2 (Winter 1995), pp. 253-274.

See the Report of the Committee on Ways and Means, U.S. House of Representatives, 74th Congress, 1st Session on

H.R. 7260, printed April 5, 1935, http://www.ssa.gov/history/reports/35housereport.html.

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social insurance program, which included aid to “children deprived of a father’s support.” In their

report to the President in January 1935, the CES urged the creation of federal grants-in-aid to

release from the wage-earning role the person whose natural function is to give her children

the physical and affectionate guardianship necessary not alone to keep them from falling into

social misfortune, but more affirmatively to rear them into citizens capable of contributing to

society.8

In essence, the committee was proposing a program to provide mothers with the financial

assistance necessary to remain at home with their children.

Later that year, following the recommendations of the CES, the Aid to Dependent Children

program (ADC) was established as a federal grant-in-aid program to states to help them fund cash

assistance to needy families with children. Authorized under the Social Security Act of 1935 (P.L.

74-271; H.R. 7260), ADC grants provided assistance to children under the age of 16 who had

“been deprived of parental support or care by reason of death, continued absence from the home,

or physical or mental incapacity of a parent.” Cash benefits provided under ADC were primarily

intended to enable mothers (typically widows) to stay at home and rear children. Echoing the

sentiment voiced in the CES report to the President, the House Report accompanying H.R. 7260

stated that these benefits were to assist in aiding the families on relief who were “without a

potential breadwinner other than a mother whose time might best be devoted to the care of her

young children.”9

Over the coming decades, the demography of ADC recipients began to change. Some of this

change reflects changing demographics in the general population, such as the increase in femaleheaded families headed by divorced, separated, or never-married mothers as opposed to widows.

Also affecting the demography of the ADC caseload was Social Security policy changes. At the

program’s onset, the most common ADC family was headed by a widow. Social Security benefits

to widows, widowers, and child survivors were created in the Social Security Amendments of

1939, and those receiving ADC increasingly were families where the father was alive but absent.

By 1942, the proportion of ADC families with women who were divorced, separated, or

unmarried was about equal to the proportion of women who were widows. The caseload also

became increasingly nonwhite.10

Though federal policy documents connected with the establishment of ADC stressed child-rearing

as the policy rationale for providing aid, the expectations for work among low-income women

See the Report of the Committee on Economic Security to the President, transmitted to the President on January 15,

1935.

See the Report of the Committee on Ways and Means, U.S. House of Representatives, 74th Congress, 1st Session, on

H.R. 7260, printed April 5, 1935, http://www.ssa.gov/history/reports/35housereport.html.

Studies of the characteristics of the cash assistance caseload have measured race and ethnicity differently over time,

precluding a precise analysis of the change in the racial/ethnic makeup of the caseload. However, there is enough

evidence to point to the changing racial and ethnic makeup of the caseload. The Social Security Administration

published a report on changes in the ADC caseload from 1942 to 1948 in 16 states. Over this period, the percent of

recipient children who were non-white grew from 21.4% to 30.2%. By 1956, 40% of the caseload was classified as

nonwhite. In 1973, data on whether or not a recipient was Hispanic became available. In that year, it was reported that

white non-Hispanic heads accounted for a minority (38%) of all AFDC families. Blacks headed 43% of all AFDC

families and Hispanics headed 13.4% of all AFDC families in 1973. These data are from various reports showing the

characteristics of AFDC families over the years.

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may have differed at the state level. Some states adopted rules barring “employable” mothers

from aid.11

Additionally, in the last half of the 20th Century, female participation in the workforce was on the

rise, as norms for middle-class mothers changed with respect to child-rearing and work.12 The

assumption that women should remain in the home with their children began to diminish.13

The 1950s ushered in an increased focus on the self-sufficiency and rehabilitation of public aid

recipients, and amendments to the ADC law began to reflect this reorientation. In 1956, the law

(P.L. 84-880; H.R. 7225) was amended to include the provision that its purpose was to not only

provide financial assistance to needy families with children, but also “to help such parents or

relatives to attain the maximum self-support and personal independence consistent with the

maintenance of continuing parental care and protection.” The Senate Finance Committee Report

accompanying H.R. 7225 further explained that “[s]ervices that assist families and individuals to

attain the maximum economic and personal independence of which they are capable provide a

more satisfactory way of living for the recipients affected.”14 The 1956 amendments also added

Disability Insurance to the Social Security program, again potentially aiding some families that

might otherwise rely on ADC for benefits.

With the advent of the 1960s, the focus on self-sufficiency progressed from symbolic statements

and funding for services to actual federal program requirements. At first, however, these

requirements focused on men when cash assistance was extended to families with two ablebodied parents with one unemployed. In 1961, in the midst of a recession and high

unemployment, President Kennedy called on Congress to amend the ADC program to include the

children of the unemployed.15 That year, the law was changed to temporarily extend eligibility for

ADC to dependent children of unemployed parents. For a state to provide assistance to families

on the basis of unemployment, they were required to include in their state plan provisions for

ensuring that the unemployed parent was registered for job placement services. If the parent

refused to accept employment without “good cause” (as determined by the state), the state was

required to halt assistance to the family.16 For the first time since the program’s inception, ADC

now had the beginnings of federally mandated work requirements for families receiving

assistance.

Continuing in this vein of promoting self-sufficiency, President Kennedy’s speech to Congress the

next year emphasized a shift toward favoring services over cash assistance. Public welfare, he

stated, “must be directed increasingly toward prevention and rehabilitation ... we must place more

stress on services instead of relief.”17 Also in 1962, the name of the program was changed to Aid

Joanne L. Goodwin, ‘Employable Mothers’ and ‘Suitable Work’: A Re-Evaluation of Welfare and Wage-Earning for

Women in the Twentieth-Century United States, Journal of Social History, Vol. 29, No. 2 (Winter 1995), p. 262

Joanne L. Goodwin, ‘Employable Mothers’ and ‘Suitable Work’: A Re-Evaluation of Welfare and Wage-Earning for

Women in the Twentieth-Century United States, Journal of Social History, Vol. 29, No. 2 (Winter 1995), p. 262.

Susan W. Blank and Barbara B. Blum, A Brief History of Work Expectations for Welfare Mothers, The Future of

Children, Vol. 7, No. 1 (Spring 1997).

Report of the Senate Finance Committee, U.S. Senate, 84th Congress, 2nd Session, on H.R. 7225, printed June 5,

1956.

Special Message to the Congress: Program for Economic Recovery and Growth, Speech delivered by President John

F. Kennedy, February 2, 1961, http://www.presidency.ucsb.edu/ws/?pid=8111#axzz1rH0u7Ceg.

See P.L. 87-31 (H.R. 4884).

Special Message to the Congress on Public Welfare Programs, President Kennedy, February 1, 1962,

(continued...)

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to Families with Dependent Children (AFDC) to reflect the enlarged focus of the program and to

emphasize the maintenance of two-parent families.18

The Social Security Amendments of 1967 (P.L. 90-248) enacted both financial incentives for

adult recipients to work and, for the first time, requirements for AFDC mothers to work. These

amendments required states to disregard from a family’s countable income some earnings when

determining its “need” and benefits.19 They also created the first work program under AFDC—the

Work Incentive Program (WIN). WIN was compulsory for fathers, and states could determine

whether it would be compulsory or voluntary for mothers. In practice, two-thirds of participants

in the WIN program between 1968 and 1971 were mothers. In 1971, the federal rules changed to

require all parents to enroll in WIN, with the exception of mothers with children under the age

of six.20

AFDC work requirements continued to evolve in the 1980s. The Omnibus Budget Reconciliation

Act of 1981 (P.L. 97-35) gave states the option to require “workfare” (unpaid work in exchange

for cash assistance) through Community Work Experience Programs (CWEP). The Family

Support Act of 1988 (P.L. 100-485) ended WIN, replacing it with the Job Opportunity and Basic

Skills (JOBS) Training Program. It was designed to provide AFDC recipients either job training

and education or the quick acquisition of a job.21 It also removed the participation exemption for

many single parents by lowering the age-of-youngest-child exemption from six to three years (at

state option, this could be lowered further to one year), while also increasing funding for child

care. Significantly, JOBS legislated minimum participation rates for states in order to be eligible

for their full federal fund allotment.22 The program also placed an increased focus on education,

as evidenced by the requirement that states offer education to any adult lacking a high school

diploma and the provision of federal funding for such activities.23

The progression of welfare from a cash assistance-based program to one of work incentives,

requirements, and supports culminated in the mid-1990s with welfare reform. With the signing of

the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (P.L. 104-193),

AFDC was replaced by the Temporary Assistance for Needy Families program. TANF instituted a

range of work-related requirements that apply to both states and recipients. These requirements,

and the extent to which they are being met, will be discussed below.

(...continued)

http://www.presidency.ucsb.edu/ws/?pid=8111#axzz1rH0u7Ceg.

A concern at the time was that the program’s benefits and eligibility standards discouraged marriage. The program

was thus renamed to indicate that its purpose was to provide assistance to families. Susan W. Blank and Barbara B.

Blum, A Brief History of Work Expectations for Welfare Mothers, The Future of Children, Vol. 7, No. 1 (Spring 1997).

An enrollee would receive $30 a month while in training, plus an allowance for child care and other work-related

expenses. If they became employed, the first $30 of earnings plus one-third of subsequent earnings would not be taken

into account when calculating the family’s AFDC grant.

William J. Reid and Audrey D. Smith, AFDC Mothers View the Work Incentive Program, Social Service Review,

Vol. 46, No. 3 (September 1972), pp. 347-362.

Job Opportunity and Basic Skills Training Program (JOBS), ChildTrends 2003, http://www.childtrends.org/

lifecourse/programs/JOBS.htm.

Daniel Friedlander and Gary Burtless, Five Years After: The Long-Term Effects of Welfare-to-Work Program,

Russell Sage Foundation, New York, 1995.

Judith M. Gueron and Edward Pauly, From Welfare to Work, Russell Sage Foundation, New York, 1991.

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Welfare Reform and Research on Welfare,

Dependency, and Work

Welfare was the subject of a great deal of research from the 1960s through the 1990s. Economic

theory suggested that providing assistance without work reduces work effort, and a fairly large

number of empirical studies supported that contention.24

Additionally, proposals to replace the existing welfare system with a negative income tax (with a

minimum guaranteed income) was the subject of some of the first large-scale social experiments

beginning in the 1960s and continuing into the 1980s. These experiments found that such policies

reduced work effort and potentially even led to an increase in marital dissolutions.25 The negative

income tax with an income guarantee was offered as welfare reform during the Nixon and Carter

administrations, but not thereafter.26

TANF was influenced by two major types of research published in the 1980s and early 1990s.

The first was analyses of how long families remained on welfare. The second was a series of

experimental evaluations of welfare-to-work initiatives: programs that offered employment

services and education or training that encouraged participation, required participation, or did a

combination of both.

Research on the Duration of Welfare Receipt

Beginning in the 1980s, research began to examine how long families remained on the rolls based

on data that permitted examination of an individual’s program receipt over time. A study

conducted by Mary Jo Bane and David Ellwood prepared for HHS concluded that while most

periods of welfare receipt are short, some families stay on the rolls for a long period of time.27

Subsequent studies generally confirmed the basic findings of Bane’s and Ellwood’s initial report.

Additionally, some recipients experienced multiple periods of benefit receipt. In a subsequent

study, Ellwood found that close to one-fourth of those who ever come on to the welfare rolls

would receive benefits for 10 years or more in their lifetime.28

Long-term benefit receipt raised concerns about welfare dependency. That is, there was concern

that for some families, receipt of welfare had essentially become a way of life rather than a shortterm means of coping with events such as job loss or marital dissolution.

Robert Moffitt, “Incentive Effects of the U.S. Welfare System: A Review,” Journal of Economic Literature, vol. 30,

no. 1 (March 1992), pp. 1-61.

Alicia H. Munnell, ed., Lessons from the Income Maintenance Experiments, Proceedings from a Conference Held in

September 1986, Federal Reserve Bank of Boston, 1986.

For a discussions of the welfare reform proposals offered during the Nixon Administration, see Vincent J. Burke and

(name redacted),

Nixon’s Good Deed: Welfare Reform (New York: Columbia University Press, 1974); and Daniel P.

Moynihan, The Politics of a Guaranteed Income, the Nixon Administration and the Family Assistance Plan (New York:

Vintage Books, 1973).

Mary Jo Bane and David T. Ellwood, Transitions from Welfare to Work, Urban Systems and Engineering Inc.,

Cambridge, MA, 1983.

David T. Ellwood, Targeting “Would-Be” Long-Term Recipients of AFDC, Mathematica Policy Research,

Princeton, NJ, 1986.

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Pre-1996 Welfare-to-Work Experiments29

The 1980s also saw welfare-to-work programs evaluated using random-assignment “social

experiments” to test whether there were effective programs to move recipients from welfare to

work.30 Early studies focused on whether mandatory, relatively low-cost programs could affect

the behavior of cash welfare recipients. The evaluations found that such programs that require

mandatory participation can have positive impacts.31 Most of these programs emphasized job

search. Evaluated unpaid work experience programs (e.g., “workfare”) tended to produce little in

the way of positive employment impacts or reductions in welfare receipt, though the activity itself

had value in providing services to the public at large.32

The period between the enactment of the Family Support Act of 1988 and PRWORA in 1996 saw

a surge in experimentation on welfare-to-work approaches. In addition to authorizing the JOBS

program itself, the Family Support Act of 1988 also authorized the study that would examine the

impact of 11 mandatory welfare-to-work programs operating in seven sites. This major, eightyear study would come to be known as the National Evaluation of Welfare-to-Work Strategies

(NEWWS). NEWWS studied the impact on welfare recipients and their children of these

programs that took different approaches to getting recipients into work.

In addition to NEWWS, a number of states conducted evaluations of their own initiatives. These

evaluations were a condition of states receiving “waivers” under Section 1115 of the Social

Security Act. The key initiatives that influenced welfare reform and the design of state TANF

programs were waiver programs that allowed recipients who went to work at low-paying jobs to

remain on the rolls and supplement their earnings with a reduced welfare benefit, restricted the

period of time families could receive benefits (time limits), and enhanced sanctions for those who

failed to comply with program requirements. These “waiver” programs often became the basis for

states’ post-1996 TANF cash assistance programs.

GAIN—Riverside (California)

An early, influential set of welfare-to-work experiments was conducted on California’s GAIN

(Greater Avenues of Independence) program.33 The GAIN program was evaluated in six counties,

one of which was Riverside. The evaluation studied recipients who entered the GAIN program

between 1988 and mid-1990.

This section discusses the most influential studies of the pre 1996 period. It is based on more comprehensive reviews

published in the 2000 and 2004 GreenBooks published by the House Ways and Means Committee.

For a discussion of this research, as well as how randomized controlled experiments became the preferred

methodology of welfare reform experiments, see Judith M. Gueron and Howard Rolston, Fighting for Reliable

Evidence (New York: Russell Sage Foundation, 2013).

Judith M. Gueron and Edward Pauly, From Welfare to Work, Russell Sage Foundation, New York, 1991; and Daniel

Friedlander and Gary Burtless, Five Years After. The Long-Term Effects of Welfare-to-Work Programs, Russell Sage

Foundation, New York, 1995.

See Thomas Brock, David Butler, and David Long, Unpaid Work Experience for Welfare Recipients: Findings and

Lessons from MDRC Research, MDRC, MDRC Working Papers, New York, NY, September 1993.

James Riccio, Daniel Friedlander, and Stephen Freedman, GAIN: Benefits, Costs, and Three-Year Impacts of a

Welfare-to-Work Program. California’s Greater Avenues for Independence Program, Manpower Demonstration

Research Corporation, New York, September 1994.

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Like other counties’ GAIN programs, Riverside placed a heavy emphasis on skill-building

services—about 60% of participants entered an education or training activity—but also

maintained a strong focus on employment. Among the findings for each of the six counties,

Riverside’s program was the least costly to operate and generated the largest return for taxpayers.

Over the three-year period in which it operated, Riverside’s program increased the experimental

group’s earnings by an average of $3,113—a 49% gain over the control group average.

The National Evaluation of Welfare-to-Work Strategies (NEWWS)

The NEWWS evaluation studied impacts for those who entered its programs from mid-1991

through the end of 1994. The overall results of the NEWWS evaluations showed that mandatory

participation in work or job preparation activities was likely to increase the amount of work

recipients participated in and reduce the amount of welfare they received.34 However, the

requirements alone were not likely to raise incomes.

A key feature of NEWWS was its evaluation of different types of welfare-to-work strategies. In

three locations—Atlanta, GA, Grand Rapids, MI, and Riverside, CA—programs based on job

search, known as labor force attachment programs, were tested “head-to-head” against programs

that provided more long-term education. In each location, both the labor force attachment and the

education-focused programs produced positive impacts. Both types of programs raised

employment and reduced welfare receipt.

However, when impacts are compared over a relatively long period (five years), the labor force

attachment programs produced some larger impacts than the education-focused programs. This

was particularly true for those without a high school diploma, as the labor force attachment

programs increased employment rates more than the education-focused program in this subgroup

over five years.

A separate analysis of NEWWS adult basic education activities, such as adult basic skills courses,

pursuit of the General Educational Development (GED) credential, high school completion

programs, and English as a Second Language (ESL), was published. In general, participation in

these activities did not yield positive employment impacts. That study found that the programs

attended by recipients of cash assistance often were not modified to account for the specific needs

of students, and most participants failed to actually receive a GED. However, some positive

impacts were found for the few who did go on to post-secondary education after receiving a

GED.35

The program with the largest impacts in the NEWWS evaluation was the one operated in

Portland, OR. That program was referred to as a “mixed” program model. It emphasized

employment as a goal, but also permitted caseworkers the discretion to assign participants to

education if warranted. Further, Portland’s program emphasized finding a “good job,” not just

any job, and permitted extended job search.

U.S. Department of Health and Human Services and the U.S. Department of Education, National Evaluation of

Welfare-to-Work Strategies: How Effective are Different Welfare-to-Work Approaches? Five Year Adult and Child

Impacts for Eleven Programs, 2001.

Johannes M. Bos, Susan Scrivener, and Jason Snipes, et al., National Evaluation of Welfare-to-Work Strategies.

Improving Basic Skills: the Effects of Adult Education on Welfare-to-Work Programs, U.S. Department of Education

and U.S. Department of Health and Human Services, 2002.

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While NEWWS included programs that were successful in raising employment rates and earnings

and reducing welfare receipt, none—even the program with the largest positive impacts in

Portland—succeeded in raising incomes. That is, increased earnings from work offset, but did not

exceed, reductions in cash welfare and food assistance. Mandatory work requirements alone

could increase work—but not necessarily the income of adult recipients and their children.

Earnings Supplement Programs

Several programs tested in the 1990s combined mandatory work participation with a policy that

allowed recipients who went to work to remain on the rolls at higher levels of earnings or for

longer periods of time than allowed under regular pre-1996 welfare law. This was seen as

increasing financial incentives to work. One program—Minnesota’s Family Investment Program

or MFIP—also regarded this approach as a way to increase incomes and reduce poverty.36

The earnings supplement programs were generally successful in increasing work and raising

incomes.37 The MFIP program also examined the impact of being in the program on various

measures of child development. It found some positive impacts in that domain as well. However,

the increased income and positive child impacts came at a cost—the budget cost of additional

welfare payments that supplemented earnings.

New Hope

The New Hope program was conducted in Milwaukee, WI, and existed from 1994 through 1998.

It was available to adults living in one of two targeted neighborhoods who had a household

income at or below 150% of the poverty line (it was the only program that did not limit

participation to adults with children). The evaluators of New Hope described the program’s

philosophy:

Four principles underlie the New Hope program: (1) that people who are willing and able to

work full time should be assured the opportunity to do so; (2) that people who work full time

should not be poor; (3) that people who work more hours should take home more pay; and

(4) for those eligible for public assistance, that full-time work should make people better off

financially than they would be on welfare. These principles are realized by providing four

benefits and services to participants who are willing to work an average of at least 30 hours

per week: help in obtaining a job (including access to a CSJ [Community Service Job] if fulltime employment is not otherwise available), an earnings supplement to bring low-wage

workers’ income above the poverty level, subsidized health insurance, and subsidized child

care.38

Participants were expected to work at least 30 hours per week, and the program provided a twopart income supplement—the first part was based on the number of children in the family, and the

The MFIP program was established under waivers granted under Section 1115 of the Social Security Act and a

separate provision of what was then Food Stamp law. In addition, several states evaluated enhanced earnings disregards

under Section 1115 of the Social Security Act, including Connecticut, Delaware, Florida, Vermont, and Virginia.

For a synthesis of the research finding for these programs, see Gordon L. Berlin, Encouraging Work, Reducing

Poverty: The Impact of Work Incentive Programs, MDRC, March 2000.

Thomas Brock, Fred Doolittle, and Veronica Fellerath, et al., Implementation of a Program to Reduce Poverty and

Reform Welfare, MDRC, October 1997.

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second was based on the participant’s earnings. The program also supported work by including

health benefits and child care assistance.

Additionally, New Hope offered unemployed recipients the opportunity to apply for a community

service job in a nonprofit organization. These jobs paid the minimum wage, and allowed

participants to also receive federal and Wisconsin earned income tax credits.

The New Hope evaluation program found that, after two years, the program increased earnings

and employment for those who were not working full-time when they entered the program. It also

resulted in a modest increase in income during the first two years. The increase in income was

also accompanied by some positive impacts on the development of the children of participants.

The evaluation also found that subsidized community service employment played a central role in

New Hope. After New Hope ended, participants still experienced reduced poverty at five years

after having entered the program, though impacts had faded by eight years after a recipient

entered the program.

New Hope was a far broader program than merely a welfare-to-work program, and many of its

features are reflected in the broader changes in low-income assistance that took place in the mid1990s. TANF and welfare reform were a part of a series of changes to low-income assistance

programs that expanded earnings supplements to “make work pay” through the Earned Income

Tax Credit (EITC), increased funding for subsidized child care, and expanded health insurance

coverage through the creation of the Children’s Health Insurance Program (CHIP) in 1997 and

ultimately the Affordable Care Act of 2010.39

However, the current system of aid to low-income families lacks several elements of New Hope.

One such element is the emphasis on full-time work. Another element the current system has

generally lacked is publically-funded community services jobs when other jobs are not

available—except for a brief period when extra TANF funds were available under the American

Recovery and Reinvestment Act of 2009 (P.L. 111-5). (Subsidized employment under ARRA is

discussed later in this report.) The system lacks such publically-funded community service jobs

even though TANF funds may be used for them.

Post-Welfare Reform Research

The years immediately after the enactment of the 1996 welfare reform law saw a continuation of

a high volume of research about cash assistance and its recipients. With the rapid decline in the

cash assistance caseload, states examined the circumstances of those who left the rolls.

Additionally, HHS continued to fund a series of experimental studies examining program

innovations aimed at improving the impact of welfare-to-work programs on participants’

employment and well-being.

Welfare “Leaver” Studies

Welfare “leaver” studies examined the circumstances of those who left the rolls: to what extent

were they working, what were they earning, what other types of government benefits did they

For a discussion of this restructuring of low-income assistance programs and federal spending trends on low-income

aid, see CRS Report R41823, Low-Income Assistance Programs: Trends in Federal Spending, by (name redacted).

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Temporary Assistance for Needy Families (TANF): Welfare-to-Work Revisited

receive, and did they come back to the assistance rolls. A large number of these studies were

conducted by the states using varying methodologies. Congress provided special funding to study

the effects of welfare reform, and HHS used these funds to award grants to states and counties to

conduct a set of studies using more consistent research methods.

A synthesis of the HHS leaver studies generally confirmed what had been found in the statedeveloped leaver studies:40

•

The majority of those who leave welfare do so for work. Among the 15 states and

localities examined in the HHS leaver studies, the “median study”—the midpoint

of the ranking of all 15 studies—showed 57% of its leavers employed in the first

quarter after exiting the rolls. Employment rates tended to remain fairly constant

when examining the second, third, and fourth quarters after exit.

•

Though most work after leaving the rolls, most studies report that only between

30% and 40% of those who left the welfare rolls worked in all four quarters after

leaving welfare.

•

Because not all welfare leavers find work or steady work, some of those who exit

the rolls return to welfare. In the fourth quarter after leaving welfare, many of the

states and localities reported that about one-fifth (20%) of their leavers had

returned to the rolls.

Experimental Studies

Follow-up studies to the welfare-to-work experiments of the 1980s and 1990s have yielded mixed

results on new initiatives to improve program impacts. HHS launched six multi-site experimental

studies to examine additional program approaches for the cash assistance and related populations.

Two of these studies are complete, with four studies planned or currently underway (with results

forthcoming).

The Employment Retention and Advancement (ERA) Project: 1998-2011

The Employment Retention and Advancement (ERA) project sought to build on the knowledge of

how to move welfare recipients into jobs by testing initiatives to improve impacts by increasing

employment stability and advancement.41 It provided some additional evidence that providing

earnings supplements combined with employment services could result in positive earning

impacts, including employment retention. ERA also produced some evidence that communitybased organizations or for-profit providers of employment services could also produce positive

employment impacts.

ERA also tested programs that combined work with education for those on the rolls. Those

programs did not produce positive employment impacts.

Gregory Acs, Pamela Loprest, and Tracy Roberts, Final Synthesis Report of Findings from ASPE’s “Leavers”

Grants, U.S. Department of Health and Human Services, Office of the Assistant Secretary for Planning and Evaluation,

December 2001.

U.S. Department of Health and Human Services, Office of Planning Research, and Evaluation, Administration for

Children and Families, Increasing Employment Stability and Earnings for Low-Wage Workers, Lessons from the

Employment Retention and Advancement (ERA) Project, OPRE Report 2012-19, April 2012.

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The Hard-to-Serve: 2001-2012

Several ERA sites, as well as sites in a second experimental study, focused on populations that

were hard to serve.42 Some of these programs were not geared to the TANF cash assistance

population, but rather, other disadvantaged groups (e.g., those leaving prison—who tended to be

men). Programs that tested approaches such as subsidized “transitional jobs” provided both

income boosts and employment to participants while they were in subsidized jobs, but there were

no long-term impacts from program participation on employment or earnings.

A program in New York City that focused on those with cash assistance recipients who had

limiting disabilities found positive earnings impacts and reduced cash assistance. However,

employment rates for those in that program were below those in the general cash assistance

population, and evaluators attributed much of the reduction in cash assistance to a high rate of

sanctioning in the program.

Current Experimental Evaluations

HHS is fielding four additional experimental studies that at least partially focus on TANF

assistance recipients or related populations that have yet to yield impact findings. The Innovative

Strategies for Increasing Self-Sufficiency Project (ISISS) will test the “career pathways” model

that seeks to move participants into better paying jobs within a sector through combining work

and training. The Health Professions Opportunity Grant (HPOG) evaluation is measuring the

impact of a program intended to provide career pathways within the health care sector. HPOG

was created in the Affordable Care Act of 2010 (ACA, P.L. 111-148) with TANF cash assistance

recipients and other low-income individuals as its target population. The Subsidized and

Transitional Employment Demonstration (STED) examines subsidized employment models. The

Job Search Assistance (JSA) strategies project is intended to measure the relative impact of

differing job search services offered through TANF programs.

TANF Welfare-to-Work Provisions

TANF was created by the 1996 welfare reform law (the Personal Responsibility and Work

Opportunity Reconciliation Act of 1996, P.L. 104-193). On the eve of that law’s enactment,

federal law already had in place rules requiring mandatory participation in welfare-to-work

activities for some recipients. Aid to Families with Dependent Children required certain

recipients to participate in activities, and it had a sanction for those who failed to participate.43

States were also subject to participation standards. Many states had already gone further than

federal law in requiring work of more recipients, increasing sanctions for noncompliance, and

fashioning their own welfare-to-work approaches under “waivers” of AFDC federal rules. The

Clinton Administration granted welfare waivers to 43 states.44 Thus, though ending AFDC and

U.S. Department of Health and Human Services, Office of Planning, Research and Evaluation (OPRE),

Administration for Children and Families, What Strategies Work for the Hard-to-Employ? Final Results of the Hard-toEmploy Demonstration and Evaluation Project and Selected Sites from the Employment Retention and Advancement

Project, OPRE Report 2012-08, March 2012.

The AFDC sanction was the removal of the noncomplying adult from the assistance unit, a reduction in the family’s

benefit.

For a description of these waivers, see U.S. Department of Health and Human Services, Office of the Assistant

(continued...)

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creating TANF was a major change in social policy, the welfare-to-work aspects of TANF

represent a step in the evolution of welfare-to-work policies.

TANF is a broad-based block grant that provides funds to states, the territories, and Indian tribes

to help them finance cash welfare programs for needy families with children as well as provide a

wide range of other benefits and services to either ameliorate the effects or address the root

causes of child poverty. The basic federal block grant for the 50 states and District of Columbia is

funded at a total of $16.5 billion per year. States are required, under a provision known as the

maintenance of effort (MOE) requirement, to expend from their own funds a minimum total of

$10.4 billion per year in addition to federal funds on TANF or TANF-related programs.

The statutory purpose of TANF is to increase state flexibility to achieve the following goals:

1. provide assistance to needy families so that children may be cared for in their

own homes or in the homes of relatives;

2. end the dependence of needy parents on government benefits by promoting job

preparation, work, and marriage;

3. prevent and reduce the incidence of out-of-wedlock pregnancies and establish

annual numerical goals for preventing and reducing the incidence of these

pregnancies; and

4. encourage the formation and maintenance of two-parent families.

Though the block grant is a set amount, states may use TANF funds to finance any activity

“reasonably calculated” to achieve any of these four TANF goals. This gives states broad leeway

in spending TANF funds. In general, state MOE funds can be used for these same activities (there

are some technical differences in the use of federal and state funds).

States determine the size of TANF benefits, and there is a wide range of benefit amounts among

the states. In July 2011, the maximum monthly benefit for a family of three varied from $923 per

month in Alaska and $788 per month in New York City to $170 in Mississippi. TANF has a fiveyear time limit on receipt of cash assistance financed by federal funds. Recipients of cash

assistance also must cooperate in having their children’s paternity established and other

requirements relating to enforcement of child support orders.

TANF funds may be used to support work in various ways, including through helping states

finance tax credits for low-income working families, providing assistance with transportation, and

funding child care. TANF funds may supplement those from a separate child care block grant as

TANF funds may be transferred to the child care block grant or spent within TANF itself on child

care.45

Cash welfare itself accounted for less than 30% of all TANF and MOE funds in FY2011. The

cash welfare rolls and the amount of funds spent on cash assistance have declined substantially

since the creation of TANF. In 1994, the combined federal and state expenditures on AFDC cash

(...continued)

Secretary for Planning and Evaluation, Setting the Baseline: A Report on State Welfare Waivers, June 1997,

http://aspe.hhs.gov/hsp/isp/waiver2/title.htm.

See CRS Report RL30785, The Child Care and Development Block Grant: Background and Funding, by (name red

acted).

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Temporary Assistance for Needy Families (TANF): Welfare-to-Work Revisited

assistance were $22.7 billion. By FY2011, this had declined to $9.6 billion. The decline would be

even steeper in inflation-adjusted dollars.

In FY2011, TANF cash assistance was received by 1.9 million families per month. Within these

families, there were 1.3 million work-eligible adults. The next several sections of this report

•

provide a description of TANF work-eligible adults;

•

briefly discuss TANF’s work requirements as they apply directly to work-eligible

individuals; and

•

discuss the TANF work participation standards—the main performance measure

for TANF that assesses state welfare-to-work efforts.

TANF Work-Eligible Individuals

Who Is a TANF Work-Eligible Individual?

Under TANF, work-eligible persons are either adult recipients of cash assistance or certain nonrecipient parents of children receiving assistance who are expected to work. The following adults

in TANF or MOE-funded households are not considered work-eligible:

•

adult non-recipients who are non-parent caretakers (e.g., grandparent, aunt,

uncle);

•

ineligible noncitizen parents;

•

at state option, adults receiving Supplemental Security Income (SSI);46

•

parents who are needed in the home to care for disabled family members;

•

at state option, parents who are Social Security Disability Insurance (SSDI)

recipients; and

•

at state option, a parent who became eligible for SSI during the fiscal year.

TANF Assistance Families With and Without Work-Eligible

Individuals

Figure 1 shows a breakdown of the types of families that received TANF assistance in FY2011. It

shows that of all families receiving assistance, 61% included a work-eligible individual and 39%

did not include a work-eligible individual in that year. Most TANF families with a work-eligible

individual are single-parent families. In FY2011, single-parent families with a work-eligible

Before October 1, 2006, all families without an adult recipient were excluded from the work participation rate

calculation. The Deficit Reduction Act of 2005 (P.L. 109-171) required HHS to issue regulations to determine the

circumstances under which a family with a non-recipient parent must be included in the work participation rate

calculation. The HHS regulations generally require that states include the following types of families without an adult

recipient in the work participation rate calculation: (1) except for three months in a 12-month period, families subject to

a sanction that removes the adult from the TANF assistance unit; and (2) families that reach state time limits that

remove the adult from the TANF assistance unit but continue aid on behalf of the family’s children.

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Temporary Assistance for Needy Families (TANF): Welfare-to-Work Revisited

individual comprised 55% of all TANF families; two-parent families with work-eligible

individuals comprised 6% of all TANF families.

Figure 1. TANF Assistance Families, by Family Type, FY2011

Two Parent Family

No Work-Eligible

Individual

39%

Single Parent

Family

55%

Source: Congressional Research Service tabulations of the FY2011 TANF National Data Files.

Notes: Information in this analysis differs slightly from the information HHS publishes with the official TANF

work participation rates because of some differences in the data used to compute the work participation rates

and the publically available TANF National Data Files. See Appendix B for a discussion of these differences.

Characteristics of TANF Work-Eligible Individuals

TANF provides assistance to some of the most disadvantaged families with children. These are

families that are not aided by the larger, more widely received social insurance programs such as

Social Security Survivors, Social Security Disability, or Unemployment Insurance. The

demographic characteristics of work-eligible individuals reflect those often associated with

economic disadvantage. Most are single mothers, many with young children. Many of the

mothers themselves are also young, either teen parents or young adults (under age 25) who might

be considered “youths” in other contexts and programs.

TANF work-eligible individuals also tend to have lower educational attainment than the

population as a whole, with 41% lacking a high school diploma or equivalent. Additionally, twothirds of work-eligible individuals are minorities: African-Americans are 34.3% and Hispanics

25.9% of all TANF work-eligible individuals.

Table 1 shows the summary characteristics of work-eligible individuals in FY2011. In that year,

84% of work-eligible individuals were women and 16% were men. Most of the women were not

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married, and 76% of them had never married. A little more than one-third of the women who

were work-eligible were under the age of 25. Men who were TANF work-eligible were more

likely to be married and living with a spouse (that is, in two-parent families) and also tended to be

slightly older.

A large share of TANF work-eligible individuals had failed to complete high school. For

comparison with the general population, 37% of TANF work-eligible women who were 25 and

older did not complete high school, while 39% of TANF work-eligible men did not complete high

school. Among all women age 25 and older in 2011, 12% lacked a high school diploma or

equivalent; among all men age 25 and older in 2011, 13% lacked a high school diploma or

equivalent.47

Table 1. Summary Characteristics of Work-Eligible Individuals: FY2011

By Gender

Women

Gender

Men

Totals

84.4%

15.6%

100.0%

Single never-married

75.8

48.5

71.5

Married living together

9.5

40.1

14.3

Married living apart

9.5

5.5

8.8

Widowed

0.3

0.8

0.4

Divorced

5.0

5.2

5.0

Totals

100.0

Teen parents

6.4

3.4

5.9

Age 20 to 24

28.6

14.2

26.3

Age 25 to 29

23.6

17.5

22.7

Age 30 to 34

17.3

18.4

17.5

Age 35 to 45

18.7

29.7

20.4

Age 45 and older

5.5

16.8

7.2

100.0

Infant

18.7

16.6

18.3

1 to 3 years old

39.6

34.8

38.9

4 to 5 years old

13.2

12.2

13.0

Marital Status

Age

Total

Age of Youngest Child in Household

This is based on data from the U.S. Census Bureau. See detailed data tables at https://www.census.gov/hhes/

socdemo/education/data/cps/2011/tables.html.

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Women

Men

Totals

6 to 12 years old

20.1

23.3

20.6

Age 13 and older

8.4

13.2

9.2

100.0

White, Non-Hispanic

31.8

41.4

33.3

Black, Non-Hispanic

36.8

20.5

34.3

Hispanic

25.7

27.1

25.9

American Indian or Alaskan Native

1.4

1.3

1.4

Asian or Pacific Islander

2.6

6.7

3.2

Unknown

1.7

3.0

1.9

100.0

Less than high school diploma

40.3

42.4

40.6

High school diploma or GED and above

57.8

55.0

57.4

Unknown

1.9

2.6

2.0

100.0

37.0

39.0

37.4

Total

Race/Ethnicity

Total

Educational Attainment

Total

Percent age 25 and above without a high school diploma or GED

Source: Congressional Research Service tabulations of the FY2011 TANF National Data files.

Notes: Information in this analysis differs slightly from the information HHS publishes with the official TANF

work participation rates because of some differences in the data used to compute the work participation rates

and the publically available TANF National Data Files. See Appendix B for a discussion of these differences.

The TANF national data files do not contain information necessary to examine the incidence of

many “barriers” to employment. For example, they do not contain information on whether a

work-eligible individual has a physical or mental impairment, substance abuse issues, or a

criminal record.48

Such barriers were examined in Susan Hauan and Sara Douglas, Potential Employment Liabilities Among TANF

Recipients: A Synthesis of Data from Six State TANF Caseload Studies, U.S. Department of Health and Human

Services, Office of the Assistant Secretary for Planning and Evaluation, October 2004.

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TANF’s Work Requirements for Work-Eligible

Individuals

All TANF’s work requirements are actually requirements on states as conditions of receiving

federal block grant funds. There are essentially two sets of work requirements: (1) those that

require states to have certain program rules that apply directly to recipients, which are described

in the following sections; and (2) numerical performance standards computed in the aggregate for

each state. This second set of work requirements is discussed later in the report.

Federal Requirements that Apply to Individual Recipients

Federal TANF law has three work-related requirements that states must apply to each adult or

teen parent recipient: employability assessment, a requirement that all parents and caretakers be

engaged in work within 24 months, and sanctions for refusal to comply with work requirements.

Employability Assessment

States are required to assess each adult recipient’s or teen parent’s skills, work experience, and

employability. The assessment is required to be made within 90 days of determination of the

recipient’s eligibility for assistance. States may use this assessment to develop an Individual

Responsibility Plan (IRP) that sets forth employment goals and obligations of the recipient and

describes the services the state will provide to the individual. The IRP is an option for the states;

it is not required by federal law. States may sanction families for failure to comply with IRPs.49

Work Within Two Years

States are required to engage each parent or caretaker adult in “work,” as defined by the state,

within 24 months of his or her coming on the rolls. For this requirement, the state is free to

determine what constitutes being engaged in work; it need not follow the federal rules for the

activities and hours that determine whether the family is counted as a participant toward the work

participation performance standard (this standard is discussed later). This requirement is a part of

the TANF state plan, and there is no specific penalty for a state that fails to engage a parent or

caretaker in work by the 24-month deadline.

Sanctions for Failure to Comply with Work Requirements

States are required to sanction a family with a member who refuses to comply with its work

requirements without “good cause.” States are free to determine the sanction amount, and

whether to reduce benefits or terminate benefits for families that fail to comply with work

requirements (a full-family sanction). States also determine what constitutes good cause for not

complying with work requirements. Under TANF, sanctions have become a more integral part of

CRS Report RL32748, The Temporary Assistance for Needy Families (TANF) Block Grant: A Primer on TANF

Financing and Federal Requirements, by (name redacted).

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state programs and can sometimes result in the suspension or termination of the entire

family grant.

States are prohibited from sanctioning a family with a single parent with a child under the age of

six if he or she refuses to comply with work requirements because of an inability to find

affordable child care. The parent must demonstrate to a state that the inability to find affordable

child care is because (1) appropriate child care within a reasonable distance from the parent’s

work or home is unavailable, (2) informal child care by a relative or other arrangement is

unavailable or unsuitable, and (3) appropriate and affordable child care is otherwise unavailable.

The incidence of sanctioning in TANF assistance programs is discussed in the “Sanctions” section

later in this report.

Activities of TANF Work-Eligible Individuals

What proportion of TANF work-eligible individuals are working or engaged in job preparation

activities in a given month? Figure 2 shows the work status of TANF work-eligible individuals in

FY2011. It shows that on average in a month in FY2011,

•

42% of all TANF work-eligible individuals (about 548,000 persons) were

reported as either employed or having participated for at least one hour in a job

preparation activity during the month;

•

participation in activities among TANF work-eligible individuals was split about

evenly, with 21% of work-eligible individuals employed in unsubsidized jobs and

21% otherwise engaged in work or job preparation; and

•

the majority (58%) of work-eligible individuals were reported as having no

participation in the month.

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Figure 2. Work Participation of TANF Work-Eligible Individuals: FY2011

Unsubsidized

employment

21%

No Reported

Participation

58%

Other work or Job

Preparation

Activity

21%

Source: Congressional Research Service tabulations of the FY2011 TANF National Data Files.

Notes: Information in this analysis differs slightly from the information HHS publishes with the official TANF

work participation rates because of some differences in the data used to compute the work participation rates

and the publically available TANF National Data Files. See Appendix B for a discussion of these differences.

In FY2011, the overall rate of engagement was less than 50% in any given month. As discussed

later, TANF requires states to ensure that a specified percentage of their caseload is participating

in work requirements. The statute sets this percentage at 50% (90% for the two-parent portion of

the caseload), but, as will be discussed in detail later, almost all states faced an effective

participation standard below 50% in FY2011 because of credits against the standard. Thus, the

lower rate of participation among work-related individuals does not mean that states, on average,

failed their official work participation standards.

The overall rate of engagement discussed above is a monthly snapshot of work or participation in

job preparation activities. Some recipients with no reported engagement may have been engaged

in activities during earlier months; some may be engaged in later months. Engagement in work or

job preparation activities measured over a period greater than one month (year, entire period a

recipient received TANF) is likely to be higher than the monthly snapshot of engagement.50 Some

of the reasons that a work-eligible individual may have no reported participation include (1) being

a newcomer to the rolls, with no activity yet assigned; (2) having completed an assigned activity

and awaiting the beginning of a new activity; (3) the state has exempted the individual from

See Gayle Hamilton, The JOBS Evaluation: Monthly Participation Rates in Three Sites and Factors Affecting

Participation Levels in Welfare-to-Work Programs, MDRC, July 1995.

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work; (4) the state has determined that the work-eligible individual has good cause for failing to

engage in work or activities; (5) the family is not complying with the state work requirement and

is in the sanction process; or (6) the state has yet to engage the individual to participate.

Working While on the TANF Assistance Rolls

Of those participating in an activity, the most common activity of TANF work-eligible individuals

has been working while still receiving assistance. States have adopted varying rules for treating

families with a working adult. Some states disregard all earnings for a short period of time,

allowing even those who get a full-time job to remain on the rolls for a transitional period. Other

states disregard a portion of earnings indefinitely, providing an income supplement for low

earners. Some states provide time-limited earnings supplements to families that have “left” the

formal cash assistance program and have earnings.

Many states have more restrictive rules for those coming onto the rolls than for those who get a

job while receiving assistance.51 That is, their earnings cutoffs are lower for new applicants than

for those on the rolls.

Participation of Work-Eligible Individuals by Selected

Characteristics: FY2011

Table 2 examines participation in unsubsidized employment or other work or job preparation

activity among TANF work-eligible individuals by selected characteristics in FY2011. It also

shows participation separately for TANF work-eligible women and work-eligible men.

Participation in work activities varies little among men and women in total: an estimated 42.4%

of work-eligible women and 41.9% of work-eligible men either were employed or participated in

activities in FY2011. For both men and women, participation was lower for those without a high

school diploma than for those with that credential. For TANF work-eligible women, participation

rates in activities were lower for teen parents and for women aged 45 and older than for those

between ages 20 and 44. Participation rates were also lower for women with infants than for those

with older children, except that participation rates were also lower for women whose youngest

child was a teen than for women whose youngest child was between the ages of 1 and 12.

African-American women had a higher participation rate than women of other races and

ethnicities.

In terms of participation among TANF work-eligible men, there was little variation in

participation rates by the age of the youngest child in his family. Except for Asian and Pacific

Islander men—who had a higher than average participation rate among TANF work-eligible

men—there was little variation in participation rates by a man’s race or ethnicity.

For a discussion, see CRS Report R43634, Temporary Assistance for Needy Families (TANF): Eligibility and Benefit

Amounts in State TANF Cash Assistance Programs, by (name redacted).

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Table 2. TANF Work-Eligible Individuals Employed or Participating in a Work or

Job Preparation Activity: by Characteristic, FY2011

Unsubsidized

Employment

Other

Work or

Job

Preparation

Activity

No Reported

Participation

Total

Women

20.6%

21.8%

57.6%

100.0%

Men

22.1

19.8

58.1

100.0

Total

20.8

21.5

57.7

100.0

TANF Work-Eligible Women

Marital Status

Single never-married

20.2

22.2

57.6

100.0

Married living together

19.2

19.8

61.1

100.0

Married living apart

24.4

21.0

54.6

100.0

Widowed

13.7

31.6

54.7

100.0

Divorced

23.5

20.2

56.3

100.0

Total

20.6

21.8

57.6

100.0

Teen parents

13.5

24.2

62.4

100.0

Age 20 to 24

19.2

23.5

57.3

100.0

Age 25 to 29

23.3

21.1

55.6

100.0

Age 30 to 34

22.1

55.8

100.0

Age 35 to 45

20.7

20.3

59.0

100.0

Age 45 and older

19.5

17.5

62.9

100.0

Total

20.6

21.8

57.6

100.0

Infant

14.2

71.6

100.0

1 to 3 years old

22.3

25.6

52.1

100.0

4 to 5 years old

23.7

52.6

100.0

6 to 12 years old

22.9

22.4

54.8

100.0

Age 13 and older

19.2

17.4

63.4

100.0

Total

20.6

21.8

57.6

100.0

White, Non-Hispanic

19.8

20.0

60.2

100.0

Black, Non-Hispanic

21.0

24.0

55.0

100.0

Age

Age of Youngest Child

Race/Ethnicity

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Unsubsidized

Employment

Other

Work or

Job

Preparation

Activity

No Reported

Participation

Total

Hispanic

21.4

57.1

100.0

American Indian or Alaskan Native

18.0

21.9

60.1

100.0

Asian or Pacific Islander

17.9

16.4

65.7

100.0

Total

20.6

21.8

57.6

100.0

Less than high school diploma

18.6

20.0

61.4

100.0

High school diploma or GED and above

22.3

23.6

54.1

100.0

Total

20.6

21.8

57.6

100.0

Educational Attainment

TANF Work-Eligible Men

Marital Status

Single never-married

18.8

18.9

62.4

100.0

Married living together

28.3

20.7

50.9

100.0

Married living apart

9.3

16.8

73.8

100.0

Widowed

24.9

39.7

35.3

100.0

Divorced

18.6

22.0

59.4

100.0

Total

22.1

19.8

58.1

100.0

Teen parents

11.2

11.9

76.8

100.0

Age 20 to 24

18.6

22.2

59.1

100.0

Age 25 to 29

22.7

19.6

57.7

100.0

Age 30 to 34

26.2

18.8

54.9

100.0

Age 35 to 45

21.8

20.5

57.7

100.0

Age 45 and older

22.6

19.5

57.8

100.0

Total

22.1

19.8

58.1

100.0

1 to 3 years old

22.4

20.0

57.6

100.0

4 to 5 years old

21.9

19.5

58.6

100.0

6 to 12 years old

26.2

23.3

50.5

100.0

Age 13 and older

21.2

20.0

58.8

100.0

Total

22.1

19.8

58.1

100.0

Age

Age of Youngest Child

Infant

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Unsubsidized

Employment

Other

Work or

Job

Preparation

Activity

No Reported

Participation

Total

Race/Ethnicity

White, Non-Hispanic

20.6

18.6

60.8

100.0

Black, Non-Hispanic

18.2

23.3

58.5

100.0

Hispanic

24.7

16.8

58.4

100.0

American Indian or Alaskan Native

13.2

23.0

63.9

100.0

Asian or Pacific Islander

32.9

24.7

42.4

100.0

Total

22.1

19.8

58.1

100.0

Less than high school diploma

20.2

16.9

62.9

100.0

High school diploma or GED and above

23.9

22.8

53.3

100.0

Total

22.1

19.8

58.1

100.0

Educational Attainment

Source: Congressional Research Service tabulations of the FY2011 TANF National data files.

Notes: Information in this analysis differs slightly from the information HHS publishes with the official TANF

work participation rates because of some differences in the data used to compute the work participation rates

and the publically available TANF National Data Files. See Appendix B for a discussion of these differences.

Trends in Work Activity

Table 3 shows the percentage of TANF work-eligible persons either employed or otherwise

engaged in work or job preparation in FY2011, and it compares these rates with selected prior

years under TANF and one year under pre-TANF (FY1994) programs. As shown, reported

participation under TANF has been considerably higher than under the pre-TANF programs,

attributable in great part to the increase in regular unsubsidized employment among those on the

rolls. The rate of participation in other activities also increased.

Within the TANF years shown (FY2000-FY2011), there has been little change in total

participation. The rate at which recipients were employed in the earlier years of TANF (e.g.,

2000) was greater than in the later years shown. This was partially offset by increases in the rate

at which recipients were engaged in other activities.

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Table 3. Percentage of Cash Assistance Adults and Teen Parents Employed or

Engaged in a Work or Job Preparation Activity

Selected Years FY1994-FY2011

1994

2000

2006

2011

Unsubsidized

employment

8.3%

27.1%

22.0%

20.8%

Other work or job

preparation activity

10.9

15.7

21.4

21.5

Total employed or in

job preparation

activity

19.2

42.8

43.4

42.3

Source: Congressional Research Service tabulations of the FY1994 Aid to Families with Dependent Children

(AFDC) Quality Control data file and the FY2000, FY2006, and FY2011 TANF National Data files.

Notes: For FY1994 through FY2006, these figures represent the percentage of adult recipients; for FY2011,

they represent the percentage of TANF work-eligible individuals.

Sanctions

As discussed above, TANF law requires states to sanction families with a member who refuses to

comply with work requirements, but it is the states that determine the actual sanction itself.

Sanctions are not necessarily imposed for failure to meet the federal TANF work participation

standards (e.g., hours requirements). They are imposed for failure to meet the requirements the

state determines for an individual recipient.

Additionally, states have the flexibility to determine what may constitute “good cause” for not

complying with work requirements. Though state definitions vary, a state may determine that a

recipient has good cause for not participating because of a lack of transportation, domestic

violence, lack of suitable employment, or illness.

Sanctions can range from partial reductions of the TANF grant to lifetime ineligibility. Over

time, sanctions against work-eligible adults who do not meet the work requirements have become

a significant component of many states’ TANF programs. 52

In recent years an increasing number of states have adopted policies to close cases (end benefits

entirely) for families with members who do not comply with work requirements. In FY2001,

eight jurisdictions ultimately closed cases when a family refused to comply with work

requirements. By FY2011, this number had increased to 23 jurisdictions.

Before TANF, a family subject to sanction would generally find only the adult’s portion of the grant reduced.

Though support for work over the receipt of welfare had been a popular idea for decades, formal sanction policies first

gained federal backing in 1988 with the implementation of the Family Support Act. The act stipulated that workeligible individuals who failed to participate or refused to accept legitimate offers of employment would have sanctions

levied against them. The amount of the sanction was set at the adult portion of the family’s AFDC grant. It was not

until the early 1990s, when the federal government began granting waivers of the AFDC rules—including the element

regarding adult-only sanctions—that states began to impose full-family sanctions.

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The increasing number of states using case closure as the ultimate sanction is also reflected in

data on TANF families on the rolls and those leaving the rolls. Table 4 shows the number of

sanctioned families, as well as the rate of sanctioning, for both those on the rolls as well as those

leaving TANF. In FY2001, a monthly average of about 98,000 families, or 4.6% of those on the

rolls, was sanctioned for failing to comply with TANF work, educational, or activity

requirements. In addition, during that year a monthly average of approximately 11,000 families,

or 6.5% of all families leaving the rolls, had their cases closed because they failed to comply with

a TANF work, education, or activity requirement. The overall sanction rate (combining those on

the rolls and leavers) was 4.8%. Over time, the rate of sanctioning for those on the rolls has

fluctuated some, but in FY2011 it was little changed from the rate observed in FY2001. However,

both the absolute number as well as the percentage of those leaving the rolls because of a sanction

has increased. In FY2011, 24,000 families were sanctioned off the rolls per month, representing

15.4% of all case closures.

Table 4. TANF Families Sanctioned for Work, Educational, or Activity Requirements:

FY2001-FY2011

Monthly Averages

Families on the Rolls

Fiscal Year

Number of

Sanctioned

Families

(thousands)

Percent of

Total

Families on

the Rolls

Case Closures Due to

Violating Work, Educational,

or Activity Requirements

Number of

Families

Sanctioned

(thousands)

Percent of

Total

Families

Leaving the

Rolls

Combined

Sanction

Rate

2001

97.8

4.6%

10.8

6.5%

4.8

2002

109.2

5.3

10.1

6.0

5.4

2003

101.6

5.0

11.6

7.0

5.2

2004

81.9

4.1

16.4

9.7

4.6

2005

81.0

4.2

15.5

9.9

4.7

2006

70.6

3.9

13.4

8.8

4.3

2007

78.5

4.6

15.0

10.0

5.1

2008

70.2

4.3

16.0

11.2

4.9

2009

78.2

4.5

19.7

13.7

5.2

2010

72.9

3.9

21.5

14.0

4.7

2011

79.6

4.3

24.0

15.4

5.1

Source: Congressional Research Service tabulations of the FY2001-FY2011 TANF National Data Files.

Notes: Combined sanction rate represents the sum of families on the rolls with benefits reduced because of

sanctions and families with cases closed because of failure to work or comply with an activity requirement

divided by the sum of total families on the rolls and the total number of families leaving the rolls in a month.

The Claims Resolution Act of 2010, which extended TANF through the end of FY2011, required

states to make supplementary reports on work participation and examine the circumstances of

work-eligible individuals who are reported as having zero hours of participation in activities. In

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analyzing these data, HHS found that 16.7% of work-eligible individuals with zero reported hours

of participation during the April-June 2011 quarter were either sanctioned or in the process of

being sanctioned.53

The TANF Work Participation Standard: Measuring

the Performance of State Welfare-to-Work Efforts

The previous section of this report describes how states have engaged work-eligible individuals in

work or related activities. However, that is not how state welfare-to-work programs are formally

assessed. This assessment is done through the TANF work participation standards, which is the

focus of much of the attention on TANF’s work provisions. These standards are set in federal law,

and include target participation rates, rules for disregarding certain families from the participation

rate, and rules for determining whether the state gets credit for participation in terms of countable

activities and minimum hours requirements. States that fail to meet their target participation rates

are at risk of being penalized through a reduction in their block grant.

The participation standard serves two purposes. First, it is a measure of how the state is

performing in engaging recipients in work or work activities. Secondly, it reinforces the notion

that participation in work or work activities in return for receiving welfare assistance is a policy

goal of TANF.

The purpose of this section is twofold:

1. it describes the detailed rules of the TANF work participation standard; and

2. it provides data (for FY2011) on the number of families included in the

participation rate calculation, their engagement in countable work activities, and

their hours of engagement.

TANF Work Participation: A Glossary of Terms

The language of TANF work requirements and work standards has its own nomenclature. Therefore, a review of the

terms used, and their definitions, in discussions of TANF work requirements and standards might be helpful.

•

Work-eligible individual. Generally parents (either recipients or non-recipients) and non-parent caretakers

who themselves are recipients of TANF. Certain parents (discussed in detail above) are excluded from the

definition of work-eligible individual. Non-recipient, non-parent caretakers are not considered work-eligible

individuals.

•

TANF work participation standard. The standard is the official assessment of state welfare-to-work

programs under TANF law. It comprises: (1) a target rate of work participation; (2) a list of activities countable

in the work participation rate; and (3) the minimum number of hours per week of participation in a month

required for counting activities toward the work participation rate.

•

Caseload Reduction Credit. A “credit” or reduction in the target rate of work participation granted for

reducing the cash assistance rolls. States can also count as “caseload reduction,” families aided by state spending

in excess of what is required under the TANF MOE.

U.S. Department of Health and Human Services, Engagement in Additional Work Activities and Expenditures for

Other Benefits and Services, April-June 2011, A TANF Report to Congress, March 2012.

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•

Countable activities. A list of 12 activities (listed in law, defined in HHS regulations) that a work-eligible

individual may engage in to have her or his participation counted toward the TANF work participation standards.

•

Engaged in work. Represents the number of families participating in countable activities for at least the

minimum number of hours.

•

Family included in the TANF work participation rate. A family with at least one work-eligible individual

and who is not disregarded from the participation rate.

•

Work participation rate. A fraction (expressed as a percentage) derived by dividing the number of families

considered “engaged in work” by the number of families included in the participation rate. It is the work

participation rate that is compared to the target rate of work participation that determines whether a state has

met the TANF work participation standard.

The Numerical Participation Standard

TANF sets minimum work participation standards that a state must meet. The standards are

performance measures that apply in the aggregate for each state. They require that a specified

percentage of families be considered engaged in specified activities for a minimum number of

hours.

The TANF statute provides that 50% of all families and 90% of two-parent families must be

engaged in work to meet the standard. However, few states have ever faced the full standard

because the percentage is reduced for caseload reduction or state spending in excess of what is

required under the TANF MOE. The caseload reduction credit reduces a state’s 50% and 90%

standards based on caseload reduction measured from FY2005. The caseload reduction credit

reduces a state’s numerical standards by one percentage point for each percent decline in the

caseload. Additionally, under HHS regulations promulgated in 1999, states also may receive

credits for spending in excess of what they are required to spend under the MOE requirement.54

States may consider families assisted by excess MOE as “caseload reduction,” and hence receive

extra caseload reduction credits for such families.

For example, if a state achieves caseload reduction (including the effect of caseload reduction

from excess MOE) of 25%, the state’s work participation standard for the all-family standard is

reduced by 25 percentage points—from 50% to 25%. If a state achieves caseload reduction of

50%, its all-family standard is reduced by 50 percentage points—from 50% to 0%.

Figure 3 portrays the effective (after-credit) participation standards for all families that states

faced in FY2011. It categorizes the effective standards, which ranged from 0% (a state received a

50 percentage point or more caseload reduction credit) to 50% (state or territory had a 0

percentage point caseload reduction).

As the figure shows, 23 states faced effective all-family TANF work participation standards of

0% in FY2011. That is, they did not need to engage any families in activities to meet their

standards. Two additional states faced effective standards from 1% to 9.9%; 8 states faced

effective standards from 10% to 19.9%; 10 jurisdictions faced standards between 20% and

These regulations are at 45 C.F.R. §261.43.

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29.9%; six jurisdictions faced standards from 30% to 39.9%; three states faced standards from

40% to 49.9%; and two jurisdictions (South Dakota and Guam) faced the full 50% participation

standard.

Figure 3. TANF Effective (After-Credit) Work Participation Standards for FY2011

Effective (After

Credit) Standard

50%

SD, GU

40.0%-49.9% ME, OH, OR

30.0%-39.9% DC, ID, MD, NV, VA, WY

20.0%-29.9%

AK, CA, IA, KY, MI, MS, NT, ND, OK, PR

10.0%-19.9%

IN, LA, MO, NM, NY, PA, VT, WV

1%-9.9%

TX, UT

Zero

AL, AZ, AR, CO, CT, DE, FL, GA, HI, IL, KS, MA, MN, NE, NH, NJ, NC, RI, SC, TN, WA, WI, VI

Number of States

Source: Congressional Research Service, based on data from the U.S. Department of Health and Human

Services (HHS).

Figure 10 will compare the TANF effective work participation standards with the work

participation rates actually achieved.

The Work Participation Rate

A state’s TANF work participation rate is computed and then compared to the state’s effective

(after-credit) standard. The work participation rate is a percentage, reflecting the number of

families determined “engaged in work” divided by the total number of families included in the

participation rate calculation. Not all families receiving cash assistance are included in the

participation rate calculation, as some families do not have a “work-eligible” individual or are

otherwise disregarded from the rate.

This section of this report describes in detail the rules for computing the TANF work participation

rate. Along with the program rules, it displays FY2011 data indicating how many families were

included in the rate calculation, as well as how families were engaged in activities in that year.

Families Included in the TANF Work Participation Rate

Only families receiving assistance from federal TANF or state MOE funds are included in the

participation rate calculation. However, certain families receiving assistance are excluded either

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by statute or regulation. Such families may be exempted from TANF work requirements without

creating the potential that their nonparticipation would result in a lower participation rate.

The families excluded from the participation rate are

•

families without a work-eligible individual;

•

at state option, families with a single parent caring for a child under the age of

one—this exclusion is limited to a maximum of 12 months in a lifetime for the

family;

•

at state option, families participating in a tribal TANF or tribal work program;

and

•

families under a sanction for refusal to comply with work requirements, for up to

three months in a 12-month period.

Figure 4 shows the percentage of families receiving TANF assistance that were included in the

calculation of the work participation rate. As shown in the figure, after removing all families

discussed above, a little more than half (54%) of all families receiving TANF assistance are

included in the participation rate calculation.

Figure 4. TANF Assistance Families Included and Not Included in the Work

Participation Rate: FY2011

No Work-Eligible

Individual

39%

In Participation

Rate

54%

Disregarded from

the Rate

Source: Congressional Research Service tabulations of the FY2011 TANF National Data Files.

Notes: Information in this analysis differs slightly from the information HHS publishes with the official TANF

work participation rates because of some differences in the data used to compute the work participation rates

and the publically available TANF National Data Files. See Appendix B for a discussion of these differences.

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Table 5 provides some more detail on families disregarded from the participation rate calculation.

Most disregarded families were single-parent families with infants in FY2011. Such families

accounted for 5.9% of all TANF assistance families and 80% of those families with a workeligible individual but disregarded from the rate. The next largest category is families that are

subject to sanction, at 1.5% of all TANF families. Though the percentage of TANF families

disregarded because of participation in a tribal work program is small nationwide, it does

comprise a fairly large share of the caseload in a few states (e.g., North Dakota).

Table 5. TANF Assistance Families Included and Not Included in the TANF Work

Participation Rate, FY2011

Percent of Total TANF Families

Total TANF families

100.0%

No work-eligible individual

39.1

Disregarded from the participation rate calculation

7.4

Single parent with an infant

5.9

Sanctioned

1.5

Participating in tribal TANF or tribal work program

0.1

Included in the participation rate calculation

53.5

Source: Congressional Research Service tabulations of the FY2011 TANF National Data Files.

Notes: Information in this analysis differs slightly from the information HHS publishes with the official TANF

work participation rates because of some differences in the data used to compute the work participation rates

and the publically available TANF National Data Files. See Appendix B for a discussion of these differences.

Tribal TANF Programs

Individuals participating in a tribal TANF program can be excluded from the calculation of a state’s work participation

rate. Though CRS is not examining tribal TANF data in this report, a short discussion of tribal TANF as it pertains to

work requirements may be informative.

Tribes, tribal organizations, and tribal consortia are authorized to receive and administer their own Tribal Family

Assistance Grant for the support of activities that meet the same purposes as state TANF programs. However, tribes

are not subject to all of the same work requirements that states are. Though there are hourly minimums and annual

targeted participation rates that they must meet, each of these requirements is set by the tribe, in cooperation with

the Department of Health and Human Services. At the recipient level, tribal TANF work activities are not subject to

the same restrictions on vocational training as are placed on state TANF programs. Further, tribes may define their

own individual work activities that count for the purposes of calculating their work participation rate, so recipients

may have a different range of activities that may count towards their own hourly requirements.

Certain work requirements that tribes must meet are similar to the state requirements in some ways. For example,

all work-eligible recipients are included in the calculation of the tribe’s work participation rate, with a few exceptions.

Parents with a child under one and parents subject to a sanction for less than three months in the last 12 months may

be excluded from the tribe’s work participation rate calculation. Further, like states, tribes may be subject to a

sanction if they do not meet their work participation rate.

As discussed above, states determine what requirements apply to individual recipients. Thus, they

have the option to exempt additional individuals and families from work requirements, which

means that the family will not be sanctioned for failure to engage in work. However, such

families will still be included in the calculation of the work participation rate.

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Engaged in Work: Countable Activities

Work-eligible individuals must participate in specific activities during a month to be considered

“engaged in work” and count toward the work participation standard. Work-eligible individuals

must also participate in activities for a minimum number of hours per week in a month to be

considered “engaged in work.”

Federal law lists 12 categories of activities creditable toward meeting TANF work participation

standards. HHS regulations define what specific types of activities count under each of the 12

categories. Table 6 lists the 12 creditable categories of activities and the HHS regulatory

definition for each. As shown in the table, the specific activities included in the 12 categories are

fairly comprehensive in terms of welfare-to-work activities, and include education (including

attendance at four-year colleges) as well as rehabilitative activities. However, as will be discussed

below, the “pre-employment” activities of job search, rehabilitation, and education are limited in

terms of how long or under what circumstances they can be counted toward the official

participation standard.

Table 6. Countable TANF Work Activities and Their Definitions

Activity

Definition

Unsubsidized employment

Full- or part-time employment in the public or private sector that is not

subsidized by TANF or any other public program.

Subsidized private sector

employment

Employment in the private sector for which the employer receives a subsidy

from TANF or other public funds to offset some or all of the wages and costs of

employing an individual.

Subsidized public sector

employment

Employment in the public sector for which the employer receives a subsidy from

TANF or other public funds to offset some or all of the wages and costs of

employing an individual.

Job search and readiness

The act of seeking or obtaining employment, or preparation to seek or obtain

employment, including life-skills training and substance abuse treatment, mental

health treatment, or rehabilitation activities. Such treatment or therapy must be

determined to be necessary and documented by a qualified medical, substance

abuse, or mental health professional.

Participation in this activity

may be counted for six weeks

(12 weeks in certain

circumstances) in a fiscal year.

Community service

Structured programs and embedded activities in which TANF recipients perform

work for the direct benefit of the community under the auspices of public or

nonprofit organizations. Community service programs must be limited to

projects that serve a useful community purpose in fields such as health, social

service, environmental protection, education, urban and rural redevelopment,

welfare, recreation, public facilities, public safety, and child care. A state agency

shall take into account, to the extent possible, the prior training, experience, and

skills of an individual in making appropriate community service assignments.

Work experience

A work activity, performed in return for welfare, that provides an individual with

an opportunity to acquire the general skills, knowledge, and work habits

necessary to obtain employment. The purpose of work experience is to improve

the employability of an individual who cannot find unsubsidized full-time

employment.

On-the-job training

Training in the public or private sector that is given to a paid employee while he

or she is engaged in productive work and that provides knowledge and skills

essential to the full and adequate performance of the job.

Vocational educational

training

Organized educational programs that are directly related to the preparation of

individuals for employment in current or emerging occupations.

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Activity

Definition

Participation in this activity is

limited to 12 months in a

lifetime.

Caring for a child of a

recipient in community

service

Providing child care to enable another cash welfare recipient to participate in a

community services program. This is an unpaid activity and must be a structured

program to improve the employability of participating individuals.

Job skills training directly

related to employment

Training or education for job skills required by an employer to provide an

individual with the ability to obtain employment or to advance or adapt to the

changing demands of the workplace.

Education directly related

to employment (for those

without a high school or

equivalent degree)

Education related to a specific occupation, job, or job offer.

Completion of a

secondary school program

(for those without a high

school or equivalent

degree)

In the case of a recipient who has not completed secondary school or received

such a certificate, this means regular attendance, in accordance with the

requirements of a secondary school or course of study, at a secondary school or

in a course of study leading to a certificate of general equivalence.

Source: Table prepared by CRS based on HHS regulations. See Federal Register, vol. 73, no. 24, February 5,

2008, pp. 6772-6828.

Figure 5 shows the percentage of work-eligible individuals in families included in the

participation rate by their activity. The percentage of such individuals participating at least one

hour in a month in each of the 12 countable activities is presented. As evidenced in the figure,

unsubsidized employment—work in a regular job while receiving cash assistance—was by far the

most common work activity in FY2011 with 22.8% of work-eligible individuals included in the

participation rate in that activity. The time-limited pre-employment activities of job search and

readiness (10.7% of all individuals in families included in the participation rate) and vocational

educational training (5.9% of such individuals) were the next most common activities.

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Figure 5. Percentage of TANF Work-Eligible Individuals Included in the Participation

Rate in TANF Work Activities: FY2011

(Excludes Work-Eligible Individuals Disregarded from the TANF Work Participation Rate Calculation)

Unsubsidized Employment

22.8%

Job Search and Readiness

10.7%

Vocational Educational Training

5.9%

Work Experience

4.3%

Community Service

3.5%

Job skills Training

2.6%

Secondary School Completion

1.1%

Education Directly Related to Employment

1.0%

Public Sector Subsidized Employment

0.8%

Private Sector Subsidized Employment

0.5%

On-the-Job Training

0.1%

Child Care for Community Service Participant

10%

15%

20%

25%

Source: Congressional Research Service tabulations of the FY2011 TANF National Data Files.

Notes: * Indicates less than 0.05%. Information in this analysis differs slightly from the information HHS

publishes with the official TANF work participation rates because of some differences in the data used to

compute the work participation rates and the publically available TANF National Data Files. See Appendix B

for a discussion of these differences.

Unsubsidized Employment

As discussed earlier, the most common activity of TANF work-eligible individuals in families

included in the participation rate was unsubsidized employment: working in a regular job while

on the rolls during a month.

States get credit toward their work participation standard for working families on assistance. This

encourages them to disregard earnings, providing an earnings supplement for at least a limited

period of time. As discussed in the section on welfare-to-work research, evaluated programs with

earnings supplements tended to increase work and also raised the incomes of families in

those programs.

Though a higher proportion of TANF families have earnings than families who received benefits

in the pre-1996 program, the smaller caseload means that TANF earnings supplements reach

fewer families than occurred before welfare reform. However, the more widely received Earned

Income Tax Credit (EITC); Additional Child Tax Credit (ACTC); and other need-tested programs,

such as the Supplemental Nutrition Assistance Program (SNAP), also aid low-income working

families with children and thus supplement their earnings.

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Subsidized Employment

In FY2011, the rate at which TANF work-eligible individuals included in the participation rate

were engaged in subsidized employment was low: 0.5% reported engagement during a month in

subsidized private sector employment and 0.8% reported engagement during a month in

subsidized public sector employment. Subsidized employment has historically been relatively

rare in TANF welfare-to-work programs.

However, the American Recovery and Reinvestment Act of 2009 (ARRA, P.L. 111-5) established

a two-year Emergency Contingency Fund that provided states with extra federal dollars that could

help finance increased expenditures on subsidized employment in FY2009 and FY2010. The

ARRA fund did help finance subsidized employment, but most of this activity occurred in

FY2010. It is unknown the degree to which the ARRA funds were used to finance subsidized

employment for those on the assistance rolls versus those who were not receiving TANF

assistance. Only in the former case (for those on the assistance rolls) would subsidized

employment be present in the work participation data. States receive no credit toward their TANF

work standards for subsidized employment for those who are not on the benefit rolls.

Time-Limited Job Search and Readiness and Vocational Educational Training

The two most common activities that TANF work-eligible individuals engage in other than

unsubsidized employment are job search and readiness and vocational educational training. In

FY2011, 10.7% of TANF work-eligible individuals included in the participation rate calculation

were in job search and readiness. That year, 5.9% of such persons were engaged in vocational

educational training.

These two activities are countable only for a specified period of time. The combination of job

search and job readiness activities counts for only a maximum of 12 weeks in a fiscal year. HHS

regulations afford states some flexibility by setting the weekly limit in hourly equivalents,

allowing job search and readiness to be counted in more than 12 calendar weeks in a year.

Vocational educational training can only be counted for 12 months in a recipient’s lifetime.

Additionally, the combination of vocational educational training and teen parents determined

engaged in work by virtue of education cannot exceed 30% of all families determined engaged in

work. Participation in such activities over that limit does not count toward the TANF work

participation rate.

“Workfare”

Work experience is the fourth most common activity of TANF work-eligible individuals included

in the participation rate, with 4.3% of such individuals engaged in that activity in FY2011. An

additional 3.5% of TANF work-eligible individuals included in the participation rate were

engaged in community service in that year.

Work experience and community service are two activities typically thought of as “workfare”:

performing a form of work in return for their cash assistance benefits. Such activities could also

be viewed as helping individuals obtain certain skills, such as developing work habits and other

job skills. Most states have not adopted large-scale workfare programs under TANF, but these two

activities are relatively prevalent in some states.

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On-the-Job Training

States may count most education and training activities in only a limited way toward the TANF

work participation standards. The exception is on-the-job training: training provided to a

participant in a paid job. States can count hours spent in this activity under any circumstance.

However, engagement in on-the-job training is relatively rare. In FY2011, 0.1% of all TANF

work-eligible adults included in the participation rate were participating in on-the-job training.

Education

For adult recipients (defined in TANF as age 20 and older), engagement in educational activities

such as secondary school completion, education directly related to employment, and job skill

training count only under limited circumstances or in combination with other activities.

Combining work and education will be discussed in a separate section of this report, below.

Engaged in Work: Hours of Participation

To be considered a “participant” and counted by a state toward meeting its standard, a family

member or members must also be engaged in these activities for a minimum number of hours per

week in a month. The required minimum hours per week in a month vary by the family’s

composition.

Table 7 outlines the TANF work participation hours standards. For meeting the “all family”

standard, the hours requirement varies depending on family type and the age of the youngest

child. The general hours requirement is an average of at least 30 hours per week during the

month. However, for single parents caring for a child under the age of six, an average of 20 hours

per week during the month is needed in work activities for a state to deem them participants.

More hours are required for two-parent families to meet the standard. In two-parent families, the

combined hours of both parents are considered in determining whether a family can be considered

a participant family.

Table 7 shows that certain hours of participation must be in “core” activities, while remaining

hours may be in “supplemental” activities. The concepts of core and supplemental activities are

discussed later in this report.

Table 7. TANF Hours Requirements for the All-Family Rate and the Two-Parent

Family Rate (Excludes Special Rule for Teen Parents), by Family Type

All-Family Rate

Two-Parent Family Rate (Parents may

combine hours)

Other Families

Two-Parent

Families Receiving

Federally Funded

Child Care

Two-Parent

Families not

Receiving Federally

Funded Child Care

An average of 20

hours per week during

the month

An average of 30

hours per week

during the month

An average of 55

hours per week

during the month

An average of 35 hours

per week during the

month

An average of 20

hours per week during

An average of 20

hours per week

An average of 50

hours per week

An average of 30 hours

per week during the

Single-Parent

Families with a

Child Under Age 6

Total hours

requirement

Required hours

in core activities

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All-Family Rate

Allowable hours

in supplemental

activities

Two-Parent Family Rate (Parents may

combine hours)

Other Families

Two-Parent

Families Receiving

Federally Funded

Child Care

Two-Parent

Families not

Receiving Federally

Funded Child Care

the month

during the month

month

Not applicable

Up to an average

of 10 hours per

week during the

month

Up to an average of 5

hours per week

during the month

Up to an average of 5

hours per week during

the month

Single-Parent

Families with a

Child Under Age 6

Source: Table prepared by CRS.

HHS regulations clarify that only actual hours of participation count toward meeting these

standards. However, they also created an excused absence policy. For paid activities, states are

credited for all hours for which an individual is paid, including any holidays or paid leave (e.g.,

paid sick leave). For unpaid activities, the regulations allow for up to 10 holidays plus 80 hours of

other excused absences over a year.

The regulations require that hours in unpaid activities be supervised on a daily basis. The daily

supervision requirement means that a responsible party has daily oversight of an individual’s

participation, not necessarily daily in-person contact with the participant.

Figure 6 shows a breakdown of the families that were included in the work participation rate in

FY2011 (e.g., families with a work-eligible individual that were not disregarded). Families are

classified based on their statutory hours requirements:

•

teen parents without a high school diploma, who may be deemed engaged in

work through completion of secondary school or 20 hours of education directly

related to employment;

•

single parents with a child under the age of 6, who may be deemed engaged in

work through 20 hours of participation in countable activities;

•

single parents with all children aged 6 or older, who are required to participate in

activities for 30 hours per week; and

•

two-parent families.55

In FY2011, the largest category of families included in the participation rate was single parents

with a pre-school aged child (under the age of 6). This group represented close to half (48.7%) of

all TANF families included in the participation rate. The second largest group in FY2011 was

single parents with all children aged 6 and older, representing 38.0% of all TANF families

included in the participation rate. In FY2011, two-parent families represented 10.4% of all TANF

families included in the participation rate, most of whom did not report receipt of federally

funded child care. In FY2011, only 0.2% of all families included in the participation rate were

two-parent families that received federally funded child care. This category is not shown

The number of two-parent families that received federally funded child care is very small, and therefore is not shown

on the figure.

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separately on the figure. Teen parents without a high school diploma represented 2.9% of all

FY2011 TANF families included in the participation rate.

Figure 6. TANF Families Included in the Work Participation Rate, By Family Type,

FY2011

(Excludes Families with Work-Eligible Individuals Disregarded from the TANF Work Participation Rate

Calculation)

Teen Parents

without High

School

2.9%

Two-Parent

Family

10.4%

Single

Parent, No

Child Under

38.0%

Single Parents

Child Under 6

48.7%

Source: Congressional Research Service tabulations of the FY2011 TANF National Data Files

Notes: Information in this analysis differs slightly from the information HHS publishes with the official TANF

work participation rates because of some differences in the data used to compute the work participation rates

and the publically available TANF National Data Files. See Appendix B for a discussion of these differences.

Special Rule for Teen Parents Who Lack High School Diplomas

Teen parents who are included in the TANF work participation rate calculation have a special rule

for determining whether they are engaged in work. A state may deem a teen parent who lacks a

high school diploma as engaged in work if she or he is participating in education directly related

to employment for an average of at least 20 hours per week during the month or is making

satisfactory progress toward completion of a secondary school program, including a program

leading to a General Educational Development diploma. However, such participation of a teen

parent may not count toward the participation standard if a state exceeds a cap on participation in

education. The education cap is that no more than 30% of those considered engaged in work may

be considered engaged through the combination of vocational educational training or teen parents

deemed “engaged in work” through education.

Table 8 shows the work or job preparation engagement of teen parents included in the

participation rate. (For minor teens, under the age of 18, only teens that are heads of households

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or married to heads of households are included in the participation rate. TANF minor teen parents

living in other settings—such as unmarried teens living with their parents or in an alternative

adult-supervised setting—are excluded from the participation rate calculation.) Of such workeligible persons, 15.4% were deemed engaged in work through education—completing high

school, in a GED program, or participating at least 20 hours in education directly related to

employment. The percent of teen parents without a high school diploma deemed engaged in work

through education declined from 33.3% for those aged 17 to 20.6% for those aged 18, and further

declined to less than 10% for those aged 19. This reflects a low rate of take-up on the option

states have to engage and count teens aged 18 and 19 through GED programs.

Table 8. TANF Work Participation Among Teen Parents Included in the Participation

Rate Without a High School Diploma, by Age, FY2011

(Excludes Teen Parents Who Are Not Work-Eligible Individuals or Who Are Work Eligible Individuals

But Disregarded from the TANF Work Participation Rate Calculation)

Deemed

Engaged

Through

Education

Employed

Participating in

Other Activities

Total

Participating

Under age 17

25.7%

4.6%

4.1%

34.3%

Age 17

33.3

2.4

5.1

40.8

Age 18

20.6

6.4

6.8

33.8

Age 19

9.9

17.0

11.9

38.8

Totals

15.4

12.0

9.5

36.8

Source: Congressional Research Service tabulations of the FY2011 TANF National Data Files.

Note: Information in this analysis differs slightly from the information HHS publishes with the official TANF

work participation rates because of some differences in the data used to compute the work participation rates

and the publically available TANF National Data Files. See Appendix B for a discussion of these differences.

Hours of Participation of Single-Parent Families

There are some differences in the number of hours of participation for single parents based on

whether they have a child under age 6 or not. Figure 7 shows the distribution of families by hours

of participation among single-parent families included in the participation rate, by family

category in FY2011. Two major differences in the categories are apparent in the figure. First,

single-parent families with children under age 6 are more likely to have some hours of

participation than are single-parent families with older children who are included in the

participation rate. There was a 7% gap for families with zero hours—58.7% for families included

in the participation rate with a child aged 6 and older versus 52.0% for families included in the

participation rate with a pre-school-aged child. Note that excluded from families with a preschool-aged child are those single parents with an infant who the state has opted to exclude from

the participation rate.

The second difference shown in the figure represents hours of participation over 20 hours per

week. It shows that the different hours requirements might have had some impact on actual hours

of participation. The share of single parents with a child under 6—subject to a 20-hour per week

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requirement—exceeded the share of single parents with an older child participating 20 hours per

week or 21 to 29 hours per week. The share of single parents with no child under age 6—subject

to a 30-hour per week requirement—exceeded the share of single parents with a child under age 6

participating 30 hours or more per week.

Figure 7. Distribution of TANF Single Parent Families Included in the TANF Work

Participation Rate by Hours of Participation in Activities and by Presence of a Child

Under Age 6 in the Family, FY2011

(Excludes Families with Work-Eligible Individuals Disregarded from the TANF Participation Rate

Calculation)

70%

58.7%

60%

52.0%

50%

40%

30%

20%

6.7%

10%

16.6%

14.3%

11.3% 11.7%

12.6%

6.5%

1.7%

3.1% 4.8%

Zero

1 to 19

21-29

31 and higher

Hours of Participation Per Week

Single Parent with Child Under 6

Other single Parent Families

Source: Congressional Research Service tabulations of the FY2011 TANF National Data Files.

Notes: Information in this analysis differs slightly from the information HHS publishes with the official TANF

work participation rates because of some differences in the data used to compute the work participation rates

and the publically available TANF National Data Files. See Appendix B for a discussion of these differences.

Hours of Participation of Two-Parent Families

Figure 8 shows the distribution of TANF two-parent families included in the participation rate

calculation by hours of participation in FY2011.56 The figure shows that only 37.7% of twoparent families had zero hours of participation. Thus, two-parent families were more likely to

The number of two-parent families that received federally funded child care is small, so making reliable estimates for

this sub-group is problematic. Therefore, the figure shows hours for all two-parent families.

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have some reported hours of participation than were single-parent families. However, they were

also more likely to fall short of their hours requirement. About 30% of two-parent families had

between one hour and 34 hours of participation per week during the month. Most two-parent

families are subject to a 35-hour requirement. In contrast, among single-parent families with a

child under the age of six included in the participation rate, 11% had hours between one and their

20-hour per week standard. Among other single-parent families, about 20% had hours between

one and their 30-hour per week standard. (See Table 7 for a summary of the hours requirements.)

Figure 8. Distribution of TANF Two-Parent Families Included in the TANF Work

Participation Rate by Hours of Participation in Activities, FY2011

(Excludes Families with Work-Eligible Individuals in Families Disregarded from the TANF Work

Participation Rate)

70%

60%

50%

40%

37.7%

29.6%

30%

20.7%

20%

10%

6.8%

4.7%

0.5%

Zero

1 to 34

36 to 54

56 and Higher

Hours of Participation Per Week

Source: Congressional Research Service tabulations of the FY2011 TANF National Data Files.

Notes: Information in this analysis differs slightly from the information HHS publishes with the official TANF

work participation rates because of some differences in the data used to compute the work participation rates

and the publically available TANF National Data Files. See Appendix B for a discussion of these differences.

Combining Education and Work

In general, TANF work rules emphasize that adult recipients (defined as age 20 and older) should

be in activities that emphasize quick attachment to the labor force. However, these rules also

allow states to get credit for recipients who combine work with education.

Table 9 lists the 12 activities (described in Table 6), classifying them as either “core” or

“supplemental.” In general, participation in a core activity may be a recipient’s sole or primary

activity used to fully satisfy TANF participation requirements. On the other hand, participation in

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supplemental activities often must be done only in conjunction with participation in core

activities, with hours that count only after the core requirement is met.

Most of the core activities focus on work or activities designed to move a family quickly into

work. The notable exception is vocational educational training, which is creditable for 12 months

in an individual’s lifetime as a sole or primary TANF activity. All supplemental activities are

education-related.

Table 9. TANF “Core” and “Supplemental” Work Activities

“Core” activities

“Supplemental”

activities

•

Unsubsidized employment

•

Subsidized private sector employment

•

Subsidized public sector employment

•

Job search and readiness (Usual limit of six weeks in a fiscal year.

This limit is converted to an “hourly equivalent” basis, see below)a

•

Community service

•

Work experience

•

On-the-job training

•

Vocational educational training (limited to 12 months in an individual’s lifetime)

•

Caring for a child of a recipient in community service.

•

Job skills training directly related to employment

•

Education directly related to employment (for those without a high school or

equivalent degree)

•

Completion of a secondary school program (for those without a high school or

equivalent degree)

Source: Table prepared by CRS.

The limit on job search and readiness is increased to 12 weeks for a state that has an unemployment rate at

least 50% above the national average unemployment rate or that meets the “economic need” criteria for

TANF contingency funds.

Figure 9 shows that the combination of work and education is relatively rare for TANF workeligible persons. In FY2011, only 4.5% of the individuals included in the participation rate

participated in both education and work-related activities. “Education activities” refer to hours

spent in vocational education training, job skills training directly related to employment, work

experience (i.e., education directly related to employment for an individual without a high school

diploma or GED), and satisfactory school attendance for individuals without a high school

diploma or GED. Education-related activities are intended to provide recipients with a greater

opportunity for career advancement; however, there are limitations on the level of participation in

those activities that are countable toward a state’s work participation rate.

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Figure 9. Percentage of TANF Work-Eligible Individuals Included in the Work

Participation Rate Who Participated in Work- and Education-Related Activities,

FY2011

(Excludes Individuals in Families Disregarded from the TANF Work Participation Rate Calculation)

60%

56.2%

50%

40%

33.4%

30%

20%

10%

5.9%

4.5%

No Hours of

Participation

Only Work Activities

Only Educational

Activities

Combined Work and

Educational Activities

Source: Congressional Research Service tabulations of the FY2011 TANF National Data Files.

Notes: The number of families with no hours of participation in this figure differs from that reported in Figure

2 and Table 2 because work-eligible individuals in families disregarded from the participation rate are excluded

from the analysis in this figure. Information in this analysis differs slightly from the information HHS publishes

with the official TANF work participation rates because of some differences in the data used to compute the

work participation rates and the publically available TANF National Data Files. See Appendix B for a discussion

of these differences.

FY2011 Participation Rates

The percent of families included in the TANF work participation calculation who are in creditable

activities for at least the minimum required hours is the official TANF work participation rate. For

FY2011, the national average work participation rate was 29.5% for all families.

Under TANF, each jurisdiction’s annual work participation rate is computed and compared with

its effective (after-credit) standard. Figure 10 shows each jurisdiction’s FY2011 all-family

participation rate and compares it to the effective (after-credit) standard for that state for all

families. The 45-degree line on the figure shows where a jurisdiction’s participation rate would

equal its standard. Thus, those jurisdictions shown above the 45-degree line met (or more than

met) their standards; those below the 45-degree line failed to meet their standard.

The figure shows that nine jurisdictions failed to meet their all-family work standards in FY2011:

California, Guam, the District of Columbia, Maine, Michigan, Missouri, Ohio, Oregon, and

Puerto Rico. It also shows that there is no apparent relationship between a state’s effective

standard and its actual participation rate. States with a 0% effective (after-credit) standard had

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participation rates that ranged from 7.3% in Massachusetts to 66.0% in Georgia. Jurisdictions that

failed to meet the participation standard had rates that ranged from 2.3% in Guam to 27.8% in

California.

Figure 10. TANF Effective Work Participation Standards and

Work Participation Rates, by State, FY2011

Source: Source: Congressional Research Service, based on data from the U.S. Department of Health and

Human Services (HHS).

Notes: For a tabular presentation of FY2011 TANF effective standards and participation rates, see Table A-4.

Trends in “Effective” Work Standards and Rates, FY2002-FY2011

States first faced the 50% statutory work participation standard in FY2002. The 1996 welfare law

gradually increased the statutory standards from 25% in FY1997 to 50% in FY2002. FY2011 was

typical in terms of the history of TANF’s work participation rate. States have generally faced

effective standards far lower than 50%; the work participation rate has hovered in the

neighborhood of 30% since FY2002.

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Trends in Effective Standards

A state’s effective TANF all-family work participation standard is its statutory standard (50%)

minus credits it receives for caseload reduction and for state spending beyond that required by the

TANF maintenance of effort requirement. Table 10 shows the number of jurisdictions with

effective participation standards of 0%; from 1% to 9.9%; from 10% to 24.9%; from 25% to

49.9%; and 50% for FY2002 through FY2011. In FY2008 through FY2010, 22 jurisdictions

faced a 0% work participation standard. In FY2011, 23 jurisdictions faced a 0% effective (after

credit) work standard. In FY2011, only Guam and South Dakota faced the full 50% standard.

Before FY2007, caseload reduction was measured from FY1995. The Deficit Reduction Act of

2005 (P.L. 109-171) made the change in the credit, measuring caseload reduction from FY2005.

Before FY2006, most of the reduction of the work participation standard came from caseload

reduction. Nationally, caseloads declined by 57% from FY1995 through FY2005. Caseload

reduction credits were much reduced in FY2007, when credits were based on caseload change

only from FY2005 to FY2006. In that year, four jurisdictions faced a zero participation standard.

However, beginning in FY2008 states began to rely on the “excess MOE” portion of the caseload

reduction credit, and effective standards again were substantially reduced. The Government

Accountability Office (GAO) found that in FY2009, 16 states would not have met their TANF

work participation standards had they not claimed excess MOE credits.57

The American Recovery and Reinvestment Act of 2009 (ARRA, P.L. 111-5) allowed states that

experienced caseload increases during the recent recession to freeze their caseload reduction

credits at pre-recession levels. This freeze applied only to reductions in work participation

standards through FY2011. Beginning in FY2012, this freeze expires and states will receive credit

for caseload change from FY2005 to FY2011. Additionally, HHS regulations that standardized

the calculation of the excess MOE portion also take effect in FY2012.58 These two changes would

reduce credits—and potentially raise effective (after-credit) participation standards—for states

that either had caseload increases because of the recession or used more liberal methodologies in

computing the “excess MOE” portion of the caseload reduction credit.

Table 10. Effective TANF Work Participation Standards for All Families:

FY2002-FY2011

Number of Jurisdictions by Category of Effective Work Participation Standards

Pre-DRA Caseload Reduction Credit

Post-DRA Caseload Reduction Credit

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

Zero

0%-9.9%

10.0%-19.9%

20.0%-29.9%

U.S. Government Accountability Office, Temporary Assistance for Needy Families. State Maintenance of Effort and

Trends. Testimony Before the Subcommittee on Human Resources, Committee On Ways and Means, House of

Representatives, GAO-12-713T, May 17, 2012, p. 13.

U.S. Department of Health and Human Services, “Reauthorization of the Temporary Assistance for Needy Families

(TANF) Program; Final Rules,” 73 Federal Register 67721-6828, February 5, 2008.

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Pre-DRA Caseload Reduction Credit

Post-DRA Caseload Reduction Credit

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

30.0%-39.9%

40.0%-49.9%

50%

Source: Congressional Research Service tabulations of data from the U.S. Department of Health and Human

Services.

Notes: DRA is the Deficit Reduction Act of 2005 (P.L. 109-171). Before the effective year of the DRA (2007),

the caseload reduction credit measured caseload change from FY1995. For FY2007 and thereafter (post –DRA

caseload reduction credit), the caseload reduction credit measured caseload change from FY2005.

Trends in Work Participation Rates

Figure 11 shows the national average TANF work participation rate for all families based on the

federal rules for FY2002 through FY2011. The rate shown in the figure excludes the effect of

grandfathered, pre-1996 welfare law waivers. (See text box below for a discussion of the

“grandfathered” waivers.)

In FY2011, the national average TANF work participation rate was 29.5%. The figure shows that

the participation rate has fluctuated around 30% since FY2002, remaining well below 50% for the

entire period. However, as noted previously, most states met their participation standards with

rates below 50% because of caseload reduction and excess MOE credits

“Grandfathered” AFDC Waivers Under TANF

After the enactment of the welfare reform law of 1996, states created TANF programs that required work, and

provided financial incentives and earnings supplements to families that moved into the workforce. Many states that

tested new programs under “waivers” of pre-1996 law used them as the basis for their TANF programs. TANF

allowed states to continue their waiver programs even if they were inconsistent with TANF rules until the expiration

of those waiver programs. States that continued their work-related waivers were permitted to have their programs

assessed based on the rules of their waivers rather than those of the federal work participation standard.59 In

general, states that operated under waivers still had to achieve the numerical participation standards required under

the new law. However, they were able to count certain participation that otherwise would not meet the federal

definition of “engaged in work.” This included activities not countable toward the participation standard, such as

extended job search and education. It also included families participating for fewer hours than required under that

federal definition. Further, states were also permitted to exclude from the participation-rate calculation families that

were exempted from the welfare-to-work program under their waiver.

A total of 20 states continued their waiver programs under TANF. The last of these programs (Tennessee’s) expired

in 2007. In FY2011, all state welfare-to-work programs were assessed using the federal TANF work

participation standards.

CRS Report R42627, Temporary Assistance for Needy Families (TANF): Welfare Waivers, by (name redacted).

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Figure 11. National Average TANF Work Participation Rate for All Families,

FY2002-FY2011

Based on Federal Rules; Does not Include the Effects of Pre-1996 Work Waivers in FY2002-FY2007

50%

40%

30%

28.9%

27.5%

29.4%

30.3%

30.6%

29.7%

29.4%

29.0%

29.5%

2004

2005

2006

2007

2008

2009

2010

2011

20%

10%

2002

2003

Source: Congressional Research Service, based on data from the U.S. Department of Health and Human

Services.

A Note on the Two-Parent Family Standard

Historically, most families receiving cash assistance have been single-parent families, usually

headed by a single mother. However, some two-parent families receive assistance. Under TANF’s

work participation standards, these families are subject to a higher standard: 90% of these

families must be engaged in work, though the two-parent standard can also be reduced for

caseload reduction. Additionally, more hours of participation are required of two-parent families.

The work-eligible adults in two-parent families must participate in activities for at least 35 hours

per week in a month; if the family receives federally funded child care, at least 55 hours per week

in a month are required (the hours requirement applies to the total hours of engagement by both

parents).

Many states have avoided the need to meet the two-parent family standard. Before FY2007, many

states aided two-parent families in “separate state programs.” Separate state programs are state

programs with expenditures counted toward the TANF MOE but not considered TANF programs.

Before FY2007, cash assistance families in separate state programs were not included in the work

participation rate and thus not subject to TANF’s work participation standards. The Deficit

Reduction Act of 2005 (P.L. 109-171) brought families in separate state programs into the

calculation of TANF participation rates, thus subjecting them to the standards effective in

FY2007. However, many states then moved these families to “solely state funded programs,”

with expenditures that are not countable toward TANF’s MOE and thus totally outside of TANF’s

rules, including work participation. In FY2011, 27 jurisdictions had two-parent families included

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Temporary Assistance for Needy Families (TANF): Welfare-to-Work Revisited

in their TANF or MOE caseloads. Of these, five failed to meet their two-parent work participation

standard (Maine, Nevada, Oregon, Rhode Island, and Guam).

Implications for Failing the Standard

States that fail the TANF work participation standards are at risk of a financial penalty in the form

of a reduced block grant. The TANF statute penalizes a state 5% of its block grant for the first

year in which it fails to meet the standards, with the penalty increasing two percentage points for

each subsequent year’s failure, to a maximum of 21% of the block grant.

However:

•

The statute provides that the Secretary of HHS may reduce the penalty based on

the severity of the failure. HHS regulations specify a formula for reducing the

penalty based on (1) the gap between a state’s participation rate and its aftercredit standard, (2) any increase in the number of families engaged in work from

the preceding fiscal year, and (3) the number of years the state has failed the

standard. A state that fails only the two-parent standard will have its penalty

reduced based on the share of its caseload that consists of two-parent families.60

•

The statute provides that a state may enter into a corrective compliance plan with

HHS. A state that comes into compliance with the TANF work participation

standards based on that plan can have its penalty either reduced or eliminated.

•

The statute provides that the Secretary of HHS may determine that there was

“reasonable cause” for a state to have failed its work standard. If the Secretary

finds such reasonable cause, the state would not be penalized.

Thus, states are not necessarily penalized immediately for failing their work standards. HHS has

not made a final penalty determination for states that did not meet the FY2011 standards.

The 2002-2005 TANF Reauthorization Debate

Congress last debated TANF reauthorization proposals during the 2002 through 2005 period.

President George W. Bush’s TANF reauthorization proposal would have raised the participation

standard percentage from 50% to 70%, ended the caseload reduction credit and replaced it with a

credit for employed persons who leave the rolls, further limited counting pre-employment

activities as a recipient’s sole or primary activity, and raised the full hours standard to 40 hours

per week but provided partial credit for fewer hours per week.61

The House passed bills incorporating most of the Bush Administration’s proposals three times

during the 2002-2005 periods.62 (The major change not accepted by the House was ending the

caseload reduction credit.) The Senate Finance Committee also reported three bills that raised the

These regulations are at 45 C.F.R. §261.51.

Working Toward Independence: Maximize Self Sufficiency Through Work and Additional Constructive Activities.

February 2002, http://georgewbush-whitehouse.archives.gov/news/releases/2002/02/welfare-book-04.html

The bills are H.R. 4737 (107th Congress), passed by the House on May 16, 2002; H.R. 4 (108th Congress), passed by

the House on February 13, 2003; and S. 1932 (109th Congress), passed by the House on November 18, 2005.

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Temporary Assistance for Needy Families (TANF): Welfare-to-Work Revisited

percentage standard, but they differed in terms of the form of the employment credit and would

have expanded the ability of states to count pre-employment activities toward the work

standard.63

Neither the House-passed nor the Senate Finance Committee approaches were adopted. Instead,

the Deficit Reduction Act of 2005 (P.L. 109-171) made its changes to revise the caseload

reduction credit, require HHS to issue regulations standardizing the definition of work activities,

and require states to verify work participation.

If Congress would again consider raising participation standards, it would beg the question of

why state participation rates have been fairly steady at 30%, with overall engagement basically

steady at a little less than half of all work-eligible individuals. In 1995, as welfare reform was

being considered, MDRC (the organization that evaluated many welfare-to-work programs) noted

that the participation standard being contemplated at the time was much higher than those

achieved in any program—including the most effective programs—that were tested up to that

date.64 As noted a number of times in this report, states have faced much-reduced standards

because of credits. However, without additional research, and potentially experience, it is not

known what higher participation standard is achievable for states and the consequences for state

programs in achieving such a higher standard.

Looking Ahead: Welfare-to-Work Issues

for Congress

The 2002-2005 debate did not result in a full-blown reauthorization of TANF. President Obama’s

Administration has not proposed a comprehensive reauthorization of TANF either, but instead

provided some general principles to guide Congress’s discussion:

When Congress takes up reauthorization, the Administration will be prepared to work with

lawmakers to strengthen the program’s effectiveness in accomplishing its goals. This effort

should include using performance indicators to drive program improvement and ensuring

that states have the flexibility to engage recipients in the most effective activities to promote

success in the workforce, including families with serious barriers to employment.65

This section will examine a number of issues that Congress might address in reassessing TANF

and welfare-to-work issues. It

•

discusses some changes in the economic and policy environments external to

TANF that could affect future discussions;

•

discusses the (brief) experience of subsidized employment programs funded

through TANF in 2009 and 2010;

The bills approved by the Senate Finance Committee are H.R. 4 (108th Congress), as amended, reported on October

3, 2003; and S. 667 (109th Congress), ordered reported on March 9, 2005.

Gayle Hamilton, The JOBS Evaluation: Monthly Participation Rates in Three Sites and Factors Affecting

Participation Levels in Welfare-to-Work Programs, MDRC, July 1995.

U.S. Department of Health and Human Services, FY2015 Budget in Brief, February 2014, p. 117.

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•

examines some innovations in education and workforce programs that have yet to

be tested in the context of welfare-to-work programs; and

•

discusses the issues regarding the way TANF welfare-to-work programs are

monitored and assessed.

Changing Employment Patterns (Again): The Case of Youth

Historically, welfare-to-work issues came to the fore, in part, because of changing employment

patterns: the increase in labor force participation of women. “Pensions” to allow single mothers to

stay home with their children gradually became out of sync with the prevailing labor force

behavior of women not on assistance.

TANF defines an adult as a recipient age 20 and older for purposes of its work standards. For

those ages 20 and older, the TANF work participation standards limit the counting of educational

activities. However, the transition from childhood to adulthood has become longer and more

complex, given changes in the economy that require longer periods of education to meet job

demands.66 Many policy initiatives enacted since the 1996 welfare reform law treat young adults

as youth for the purposes of receiving benefits and services.67

During the post-welfare reform era, labor force participation and employment first increased, but

then (after 2000) it declined for young women in total (on and off the benefit rolls) aged 20 to 24.

Throughout the post-welfare reform period, enrollment for young women aged 20 to 24 in

educational programs increased.

Table 11 shows the employment status of young adults (aged 20 to 24) for selected years from

1994 to 2011. In 2000, 73.1% of all women aged 20 to 24 participated in the labor force, with

67.9% of all women employed. These rates had declined some even before the onset of the 20072009 recession. By 2007, the labor force participation rate for women aged 20 to 24 had declined

to 70.1%, with the employment rate at 65.0% (about a 3 percentage point decline in both

measures). These trends continued beyond the recession, with the labor force participation rate of

women aged 20 to 24 falling to 67.8% in 2011 and the employment rate falling to 58.7% in that

year.

Table 11. Employment Status of Young Adults (Aged 20 to 24),

Selected Years 1994-2011

Monthly Averages Over the Year

Employment Rate

Labor Force Participation Rate

All

Men

Women

All

Men

Women

1994

77.0%

83.1%

71.0%

69.5%

74.6%

64.5%

2000

77.8

82.6

73.1

72.2

76.6

67.9

2007

74.4

78.7

70.1

68.4

71.7

65.0

2011

71.3

74.7

67.8

60.8

63.0

58.7

CRS Report RL33975, Vulnerable Youth: Background and Policies, by (name redacted).

See Appendix A in CRS Report RL33975, Vulnerable Youth: Background and Policies, by (name redacted)

for age eligibility rules in programs for youths.

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Source: Congressional Research Service, based on data from the U.S. Bureau of Labor Statistics.

Note: Labor force participation rate is the percent of the population either employed or actively seeking

employment. The employment rate is the percent of the population employed.

The decline in labor force participation for women aged 20 to 24 in the 2000s was accompanied

by an increase in educational enrollment during the decade. Table 12 shows the percentage of

young adults enrolled in an educational program for selected years, 1994-2011, separately

showing rates of enrollment by gender and age group. Educational enrollment increased for

women throughout this period, even before 2000 as the labor force participation of women in this

age group was also increasing. The rate at which women aged 20 and 21 were enrolled in an

education program rose 9.1 percentage points, from 47.3% in 2000 to 56.4% in 2011. The rate at

which women aged 22 to 24 were enrolled in an education program rose 6.7 percentage points

during the decade, from 25.3% in 2000 to 32.0% in 2011.

Table 12. Enrollment in Educational Programs of Young Adults (Aged 20 to 24),

Selected Years 1994-2011

October of Each Year

Age 22 through 24

Age 20 and 21

All

Men

Women

All

Men

Women

1994

44.9%

42.7%

47.0%

24.1%

24.2%

23.9%

2000

44.1

41.0

47.3

24.6

23.9

25.3

2007

48.4

43.7

53.3

27.3

25.4

29.2

2011

52.7

49.2

56.4

31.1

30.3

32.0

Source: Congressional Research Service, based on data from the U.S. Census Bureau.

The changing employment and school enrollment patterns for the entire population of young

women aged 20 to 24 have also been accompanied by the continuation of long-term trends of

delay in the ages of marriage and in having a first child. This could differentiate the young

women on TANF (who are parents) from other members of their cohort. However, if the limits in

counting education toward meeting TANF work participation standards result in state TANF

programs curtailing the ability of recipients to engage in education, this could result in the TANF

recipients becoming more educationally disadvantaged compared to their counterparts within

their age cohort.68

Subsidized Employment

The American Recovery and Reinvestment A

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