Eleven years before the Great Recession hit, the federal government had replaced what was then commonly called welfare with the Temporary Assistance for Needy Families (TANF) program to help financially struggling families with children. How did TANF respond to the 2007-09 Great Recession on state and national levels? And how did it perform compared to other governmental safety nets?
Seeking to answer these questions through this study were Ron Haskins, co-director of the Brookings Center on Children and Families and Budgeting for National Priorities project; Vicky Albert, UNLV professor of social work; and Kimberly Howard of the Brookings Institution.
Enacted in 1996, TANF replaced the Aid to Families with Dependent Children (AFDC). The TANF program imposed strong work requirements, backed by sanctions, and a five-year time limit on benefit receipt. The welfare rolls subsequently declined in record numbers, both because people left the rolls, most of them for work, and because fewer people entered welfare. But as unemployment skyrocketed during the Great Recession, some advocates, policymakers, and researchers described TANF performance as inadequate to the situation.
The study analyzed this claim by:
- Examining if TANF performed better than expected when each state's program was examined as its unemployment was rising substantially. Individual state recessions frequently lasted beyond the country's official recession .
- Reviewing how mothers heading families who lost or left their jobs responded in the Great Recession as compared to recessions that began in 1990 and 2001.
- Interviewing state TANF directors about how their TANF programs responded and how federal programs helped their states.
The study found a great diversity across the states in when the recession began and when it ended. Likewise, how much and when unemployment increased and the subsequent lag in TANF response varied widely among the states.
"We claimed in our report that 'The nation experienced 51 different recessions and 51 different responses by the TANF program to the recession,'" Albert explained. "Measuring the rise of the TANF caseload in response to the unique increase in unemployment in each state reveals TANF to have been more responsive to the recession" (than critics believed).
The researchers' approach made this study unique. "To our knowledge, this groundbreaking research has not been performed by others and it has major policy implications for the welfare state," Albert said.
Welfare reform resulted with more mothers in the labor force. The researchers also found that, while single mothers were less likely to receive benefits from the TANF program during the 2001 and 2007 recessions compared with the pre-welfare reform recession of 1990, these mothers also were more likely to have a job and to access other government benefits, including unemployment, food assistance, Supplemental Security Income, and tax credits based on having worked, Albert said.
Citing research by others, the authors pointed out that these benefits removed over 12 million people from poverty during the first full year of the Great Recession. The expansion of these programs and new benefits under the 2009 Stimulus bill removed another 7.5 million people from poverty, bringing the total to nearly 20 million who avoided poverty due to government programs during the most recent recession.
Although they believe the TANF program worked well, especially in conjunction with other safety net programs, the authors suggest some potential reforms:
- Re-examining the limits on how much vocational training counts toward states fulfilling the work requirement during times of high unemployment, given that most experts believe the unemployed should expand their skills through job training during recessions.
- Raising the 12-week limit on job search during periods of high unemployment to as much as six months, given that the average period of search before finding a job increases sharply during periods of high unemployment.
"All in all," the authors wrote, "the American system of balancing work requirements and welfare benefits worked fairly well, even during the most severe recession since the Depression of the 1930s."
"While we are one nation, (we must) recognize the diverse experiences states offer individuals and families during economic downturn," Albert said. "Furthermore, people need to understand that there are safety nets out that can help them during desperate times." The study furthers "understanding of how single mothers and children fall in deep poverty, particularly during economic downturns. Since single-parent households with children are five times more likely to be poor than their counterparts, this study (illustrates) the important role that safety nets play for these families during recessions."