TANF at 22: Its Work Programs Do Little to Help Needy Parents Get Work

Twenty-two years ago this week, on August 22, 1996, President Clinton signed a law creating the Temporary Assistance for Needy Families (TANF) block grant and radically restructuring cash assistance for families with children living in poverty. Our week-long blog series examines TANF’s role — and its performance — in helping parents work and in providing modest but crucial anti-poverty support. Today’s post shows that TANF’s work programs have had little success in helping parents lift themselves out of poverty through work.

Some policymakers have pointed to TANF’s performance as a work program as a reason to extend TANF-like work requirements to other programs, but the facts suggest otherwise. TANF has never lived up to its promise of moving families out of poverty through work.

States serve few poor parents in TANF work programs and invest little to help poor parents prepare for and find work. When families stop receiving TANF it’s not often because they’ve found a job and no longer need assistance. And while neither the federal government nor most states even track employment and earnings outcomes or how well state TANF programs perform, the data we have show little success in helping families escape poverty through earnings.

Here are five key reasons why TANF has not demonstrated success as a work program:

1. States invest little in their work programs. Proponents of the 1996 reform law argued that, particularly as caseloads declined, states would use the funding flexibility built into the law by the block grant structure to invest greater resources to help recipients find jobs and provide work supports such as transportation. But after initial increases in TANF’s early years, state spending on work-related activities has remained flat or declined, even as caseloads continued to plummet. In 2016, states collectively spent only 12 percent of federal and state TANF funds on work and training programs, work supports (such as transportation), or supportive services. Eleven states spent less than 5 percent of their TANF funds on these work-related activities.
2. TANF’s work programs play a very small role in helping the nation’s unemployed poor parents prepare for or connect to work. This is largely because such a small share of poor parents receive TANF cash assistance. TANF’s work programs only serve parents that receive TANF cash assistance, and thus do not reach most poor families. For every 100 poor families with children in the United States, only 23 received TANF cash assistance in 2016. And more than half of TANF cases are “child-only” cases where the parent or adult caring for the child receives neither cash assistance nor work-related services from TANF.
3. TANF work programs provide little help to those parents who do receive TANF cash assistance. For those parents who do receive cash aid, the TANF work programs play a small role in helping them prepare for and connect to work. States primarily meet their targets under the work participation rate, TANF’s work performance measure, by counting participation of those recipients who have jobs regardless of whether the TANF program helped them prepare for or get the job, and to a lesser extent, by telling people to look for a job. Most states do little to provide other employment or training services or to boost employment prospects of those who may need help the most in developing skills or addressing barriers to employment.
4. Most TANF families do not exit to jobs. While some of the families that leave TANF go to work, many others — including many experiencing crises or those with the greatest barriers to work — are cut off due to time limits or sanctions for failing to comply with program requirements. Less than one-third of TANF exits are due to employment. While some more families may work in the subsequent months after leaving TANF, very few states have data on their employment rates because this is not tracked as a TANF work program performance measure.
5. Available data show that TANF leavers have poor employment and earnings outcomes after leaving the program. A review of the research on early welfare-to-work programs found modest increases in employment, but that those gains quickly faded and many parents subject to work requirements remained poor. A more recent look at Kansas’ employment outcomes was in line with these findings. In Kansas, parents often had unstable work after leaving TANF and most had annual earnings below half the poverty line.

TANF has failed many needy families — particularly those who may have the greatest need of help connecting to work but instead have become disconnected from both work and welfare — by providing them with neither a reliable income support to meet basic needs nor employment assistance that adequately addresses their employment barriers. A key step to improving TANF’s performance as a work program would be to eliminate the work participation rate — a deeply flawed work performance measure. Instead, states should be measured on serving more families in poverty, particularly those with significant barriers to work, and on the employment and earning outcomes for families that leave the program.

Tomorrow’s post in this series will discuss how states have failed to spend the bulk of their TANF funds on the core welfare reform areas of cash assistance and work-related activities and supports.