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TANF Work Requirements Don’t Bring Stable Jobs, Higher Earnings

November 19, 2015: We've updated this post to clarify the figure about sanctions for non-compliance with Maryland's work requirement.

House Speaker Paul Ryan has called for another round of welfare reform, “as an exercise to save lives and to get people from welfare to work and realize opportunity and upward mobility.”  But the first round of welfare reform didn’t accomplish what Speaker Ryan says it did, according to a new study of former Temporary Assistance for Needy Families (TANF) recipients in Maryland. 

State TANF agencies have to meet a 50 percent work participation rate for TANF recipients, but they don’t have to collect data on their employment or earnings.  Welfare reform’s proponents continue to tout TANF’s track record in moving families to work even though we have almost no recent data on welfare reform’s recent accomplishments.  

But a new study of almost 5,000 Maryland families that left TANF between December 2001 and March 2009 disputes those claims.  Stable employment and increasing earnings were the exception, not the norm, over five years after the families left TANF, the University of Maryland’s Family Welfare Research & Training Group found.

Like almost every other state, Maryland imposes work requirements on most adult recipients and imposes stiff financial penalties on those who don’t comply.  In fact, sanctions for not complying with the work requirement are the most common reason why families leave TANF, accounting for 35 percent of all recent exits from the program.

Many former recipients spent substantial time without work and with very low earnings across the five-year follow-up period, the study shows.

  • In the fifth year after leaving TANF, almost half (45.7 percent) of the former recipients didn’t work at all or worked in just one quarter of the year, up from 38.6 percent in the first year after they left the program.  The share with no job rose substantially — from 27.4 to 37.2 percent of recipients — from the first to the fifth year (see chart).
  • Over the full five-year period, more than half were steadily unemployed, unstably employed, or worked less over time.  Almost one-fifth (18 percent) of recipients didn’t work or worked in no more than one quarter in each of the five years; just 21.6 percent worked three or four quarters in each of the five years. 
  • Among former recipients with a job, more than half (52.8 percent) had continuously low, unstable, or falling earnings; only 8 percent of former recipients earned more than the federal poverty threshold for a family of three in each of the five years. 

As we’ve said before, TANF isn’t the success that some proponents claim.  And TANF-like work requirements aren’t a solution to reducing poverty.  In fact, they may make a substantial share of families worse off.