This chapter presents findings from the LBP Survey regarding the status of LBP cases shortly before and shortly after the termination of cash benefits. Specifically, we consider the status of cases in the month prior to benefit termination and several months later in the interview month. All interviews were conducted during the LBP's six-month FIP ineligibility period, with 92 percent in LBP months nine through eleven, or two to four months after the first month of no cash benefits. Using descriptive analytic techniques, we examined the demographic and socioeconomic status of cases at these two points in time (the month prior to benefit termination and the interview month) in terms of household composition, housing situation, income, employment, government assistance, and support from family, friends, and community organizations.
One might expect the termination of welfare benefits to lead to changes in household composition, particularly in the form of families moving in with relatives or parents sending their children to live with relatives. The data obtained in the LBP Survey, however, provide little evidence of this during the FIP ineligibility period.
As shown in Table V.1, the average number of household members in the month prior to benefit termination was approximately four. The most common household size (31 percent of households) was three persons. However, large households were also quite common. Approximately 15 percent of households had five members, and another 16 percent had six or more members.
Nearly all of the households (98 percent) included one or more of the survey respondent's children. The average number of children was two. Approximately 89 percent of the households contained one to three of the respondent's children. In one-third of the households, at least one child of the respondent under the age of 3 years was present, and in just over one-half of the households at least one child of the respondent between the ages of 3 and 5 years was present. As shown in Table V.2, approximately 32 percent of the respondents lived with a spouse or partner in the month before benefit termination, and 12 percent lived with their parent(s) in that month.
Table V.2 also shows that there was relatively little change in the composition of LBP households between the last month of cash assistance (month 6) and the interview month. There is little to no evidence that respondents were separated from their children or that they moved in with their parents or other relatives following the termination of cash assistance.(1) We do, however, observe a small increase in the proportion of respondents living with a spouse.
Consistent with the lack of change in household composition, there was relatively little change in the size of households following benefit termination. As shown in Table V.3, approximately two-thirds of the respondents reported no change in household size, and nearly nine of ten reported no change in the number of children. Where household size did change, it more often became larger rather than smaller. The most common change was an increase of one person, which occurred in 12 percent of surveyed households.
We analyzed the housing situations of LBP cases and how they changed after cash benefits were terminated, in terms of housing quality, arrangements, and assistance. As shown in Table V.4, approximately 30 percent of survey respondents moved between the last month of cash assistance and the interview month. These moves include both improvements and reductions in housing quality: while nearly half moved to housing of higher quality, about one-fifth moved to housing of lower quality. This pattern of "gainers" and "losers" among LBP families following benefit termination--that is, one set of families that experienced an improvement and another set that experienced a decline--reappears in the analysis of household income in Section C of this chapter.
Table V.5 presents our findings on housing arrangements and assistance. Both before and after benefit termination, the majority of survey respondents lived in rental housing. Approximately two-thirds lived in rental housing in the month before benefit termination, while less than 10 percent owned their homes. The next most common housing arrangement was living with a relative. Survey respondents reported very little reliance on shelters before or after benefit termination.
There were only small shifts in the housing arrangements of LBP families following benefit termination. Contrary to our expectation that loss of benefits might lead families to move in with relatives, the percentage of respondents living with relatives decreased. However, there is some evidence of an increase in shared housing following benefit termination, as the percentage of families that reported living with friends increased from 4 to 8 percent.
In the month prior to benefit termination, approximately 16 percent of respondents lived in public housing and 26 percent received rental assistance. Following benefit termination, the percentage of respondents living in public housing increased slightly, but the share of households that received rental assistance decreased. This decrease parallels reductions in the receipt of other forms of government assistance, as discussed in Section E of this chapter.
The analysis of household income before and after cash assistance was terminated under the LBP is based on total household monthly income as reported by LBP survey respondents. Total income is defined as income for all household members from all sources (including FIP, Food Stamps, other assistance, and earnings). Table V.6 presents the mean value and distribution of monthly income in LBP month 6 and in the month preceding the interview, which we refer to as the pre-interview month. Average total household income in the pre-interview month was just under $750. This was $13 higher than in LBP month 6, the last month of cash assistance. Thus, although cash assistance was terminated, households in fact had slightly higher total income, on average, several months later. However, this net increase was not uniformly distributed across households. Rather, there were clear gainers and losers, as evidenced by increases in both the upper and lower tails of the income distribution. Between the last month of cash assistance benefits and the pre-interview month, households shifted into income categories below $500 and above $1000, while they shifted out of categories between $500 and $1000. More households shifted into the lower tail of the income distribution than into the upper tail.
Table V.7 provides additional evidence of the polarization in the income of LBP households after benefit termination. Approximately 40 percent of LBP cases reported a net increase in income between the last month of receiving cash assistance and the pre-interview month, and nearly 50 percent reported a net decrease in income over this period. Also, there were relatively large changes in income in both directions. In households with increases, average income rose by $496, from $600 in the last month of cash assistance to $1096 in the pre-interview month. In households with decreases, average income fell by $384, from $884 to $500. Due to the difference in the magnitude of these offsetting changes, the average net change in income was positive, despite the fact that more households reported a decrease in income than reported an increase in income.
The employment experience of LBP participants after the termination of benefits was analyzed in terms of the number of jobs held and job characteristics, such as hours worked and fringe benefits. Table V.8 documents the total number of jobs held during this period. Just under half (47 percent) of the survey respondents were not employed in any job since the last month of cash benefits (LBP month 6). Approximately 40 percent of respondents were employed in one job since the last month of cash benefits, and approximately 11 percent were employed in a total of two jobs during this period.(2)
Table V.9 focuses on the characteristics of the most recent job held by survey respondents who were employed since the last month of cash benefits. There is evidence of both full-time and part-time employment. Approximately one-fourth of those who were employed reported working less than 20 hours per week on the most recent job, while about 38 percent reported working 40 or more hours per week. On average, respondents worked 31 hours per week on the most recent job and earned $170 per week on that job. With respect to fringe benefits, 36 percent of those who were employed reported that health insurance was available on their most recent job, but only 11 percent actually received health insurance from their employer. Of those who had health insurance available but did not actually receive it, about two out of five did not enroll in the plan due to its cost. Paid sick leave and paid vacation were each available on about 30 percent of the most recent jobs held by survey respondents since the last month of cash benefits.
LBP families' receipt of government assistance other than FIP benefits and their receipt of child support is analyzed in terms of the incidence of receipt and the amount received. The extent to which receipt of other assistance changed coincident with the termination of FIP cash benefits varies by type of assistance.
In the month prior to the termination of FIP cash benefits, 96 percent of the LBP families received Medicaid, 88 percent received Food Stamps, and 28 percent received WIC benefits (Table V.10). General Assistance and SSI, of contrast, were received by only 4 to 6 percent of surveyed cases.
Coincident with the termination in FIP benefits, the percentage of cases that received Medicaid and Food Stamps declined quite dramatically. Between LBP month 6 and the interview month, the share of respondents that received Medicaid fell 29 percentage points (to 66 percent), and the share that received Food Stamps fell 25 percentage points (to 64 percent). Given that the LBP does not directly affect eligibility for Medicaid or Food Stamps, there must be other reasons for these declines. One possibility is that some families mistakenly think that they automatically lose their eligibility for Medicaid and Food Stamps when they lose their eligibility for FIP. Other families may know that their eligibility for Medicaid and Food Stamps is not affected by the LBP but decide that participation in these programs is not worthwhile once they are ineligible for FIP. It is also possible that some actually become ineligible for Medicaid and/or Food Stamps due to increased income from employment or other sources after the loss of FIP cash benefits.(3)
To analyze dollar amounts of government assistance, we first examined average amounts among all survey respondents--including those who reported zero dollars of a given type of assistance--and then examined average levels among the subset of respondents that received assistance in both months, that is, those who reported positive dollar amounts of a given type of assistance in LBP month 6 and in the pre-interview month. Among all survey respondents, there was a net decrease in average Food Stamp benefits and General Assistance, and a net increase in average SSI. The largest change was for Food Stamps: the average amount of Food Stamp benefits was approximately $65 less in the pre-interview month than in LBP month 6. Among recipients (those cases receiving the particular type of assistance in both months), average Food Stamp benefits increased, but only slightly, rising from $271 to $275. Average SSI among recipients also increased moderately, rising from $460 to $469. No respondents received General Assistance in both months.
Ten percent of survey respondents reported receipt of child support payments in the month prior to termination of cash assistance, and 19 percent reported receipt of child support in the pre-interview month.(4) Among all respondents, average monthly child support income increased by $24 between these two months, from $7 to $31. Among respondents that received child support in both months, the average amount received increased by $89, from $78 to $167. We must be cautious, however, in interpreting this result due to the treatment of child support under FIP. Specifically, when a household receives FIP benefits--as in month 6 of the LBP--only the first $50 of child support paid by the noncustodial parent is distributed to the family, while any amount above $50 is withheld by the state to offset FIP outlays; in contrast, when a household does not receive FIP benefits, the full child support payment is distributed to the family. Hence, some or all of the increase in child support payments reported by survey respondents (between LBP month 6 and the pre-interview month) may stem from the increase in the portion of the payment that is distributed to the family rather than a change in the noncustodial parent's payment amount.
Table V.11 documents changes in the level of support provided by family, friends, and neighbors following benefit termination. Slightly more than half of the survey respondents (56 percent) reported the same level of support from family, friends, and neighbors before and after their cash assistance was terminated. Of the respondents that experienced a change in support, a larger share reported increases in support than decreases in support. However, since we do not know the magnitude of these increases or decreases, we must be cautious in drawing any conclusions about the net change in the amount of support received.
As shown in Table V.12, parents were the most often cited source of support. Approximately 65 percent of survey respondents reported support from parents following benefit termination; after parents, friends were the next most common source of support, cited by 47 percent of respondents. Between 30 and 40 percent of respondents reported support from a spouse or partner and/or other relatives, and 14 percent reported support from neighbors.
Emotional support was the most common type of support received from relatives, friends, or neighbors. Money was the next most common type of support received from relatives (parents, spouse or partner, other relatives), and child care was the next most common type of support received from friends and neighbors. Relatives provided more kinds of support to respondents than did friends or neighbors. For example, seven different types of support from parents were reported by at least 20 percent of those receiving support from parents, while only two different types of support from friends were reported by at least 20 percent of those receiving support from friends.
LBP Survey respondents were asked about support they received from four types of community organizations after the termination of FIP benefits: food banks, emergency shelters, crisis centers, and soup kitchens. Table V.13 displays the percentage of respondents that had sought assistance from each of these after their cash benefits were terminated.(5) Food banks were by far the most important of these community organizations as a source of assistance for survey respondents in the period following the termination of cash benefits. Approximately one quarter of respondents relied on a food bank in this period. Less than 4 percent of respondents relied on an emergency shelter. Even fewer relied on a crisis center or a soup kitchen. About 70 percent of LBP cases did not rely on any of these four types of community assistance during the period of no cash benefits.
In this chapter, we examined the status of LBP cases in the month before benefit termination, in the interview month, and the changes status between these two points in time. In reviewing the findings, it is important to recall that the changes we observe are short-term changes. Also, benefit termination under the LBP is restricted to PROMISE JOBS-mandatory cases that do not meet employment and training requirements; these cases are not representative of the FIP caseload as a whole.
The major findings that emerge from this chapter are as follows:
Family, friends, and neighbors were important sources of support for LBP cases in the months following benefit termination. Emotional support was the most common type of support provided, though financial support was also commonly provided by family members.
1. While there was not widespread incidence of children moving out following benefit termination, one or more of the respondent's children was sent to live elsewhere in a few instances (Table V.2 and Table V.3). The 12 case studies included several families in which children moved out. These findings are discussed in Chapter 7.
2. These jobs may have been held concurrently or consecutively.
3. While eligibility for regular Medicaid is not directly affected by the LBP, cases in the LBP are not eligible for the Transitional Medicaid that is provided to former FIP recipients whose eligibility for cash assistance has ended as a result of increased income from employment.
4. The case studies, discussed in Chapter VII, suggest that some LBP parents more actively pursued child support from the noncustodial parent following the termination of cash assistance.
5. We do not have data on the use of these community organizations by survey respondents prior to benefit termination; hence, it is not possible to determine the change in use of these organizations following benefit termination.