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In 1994, the State of Florida launched the Family Transition
Program (FTP), the nation’s first experiment with welfare
time limits. Today, almost all states have established time
limits on cash assistance benefits, either for adults or
for entire families, and the 1996 federal welfare law has
imposed a nationwide 60-month time limit on federally
funded benefits (with limited exceptions). FTP has attracted
national attention, both because it anticipated key elements
of later federal and state welfare reforms — even today,
relatively few families nationwide have reached a time limit
– and because it is one of the few programs of its kind
that has been subject to a rigorous evaluation, including
an assessment of effects on participants’ children.
This is the final report in a six-year independent evaluation
of FTP conducted by the Manpower Demonstration Research
Corporation (MDRC) under a contract with the Florida Department
of Children and Families, with funding from the U.S. Department
of Health and Human Services, the Ford Foundation, and the
other organizations listed at the front of the report.
FTP, which operated until late 1999 in Escambia County (which
includes the city of Pensacola), limited most families to
24 months of welfare receipt in any 60-month period (the
least job-ready were limited to 36 months of receipt in
any 72-month period). The program also provided an unusually
rich array of services, supports, and financial work incentives
designed to help welfare recipients prepare for, find, and
keep jobs. Florida’s current statewide welfare program includes
similar time limits and financial work incentives, but differs
from FTP in other key respects; thus, the evaluation is
not assessing the state’s current program.
To assess what difference FTP made, the evaluation compared
the experiences of two groups: the FTP
group, whose members were subject to the program, and
the Aid to Families
with Dependent Children (AFDC) group, whose members
were subject to the prior welfare rules. To ensure that
the groups would be comparable, welfare applicants and recipients
(most of them single mothers) were assigned at
random to one or the other group. Because the two groups
had similar kinds of people, any differences that emerged
between the groups during the study’s follow-up period can
reliably be attributed to FTP rather than to differences
in personal characteristics or changes in the external environment.
These differences are known as program impacts.
The study focused on about 2,800 people who were assigned
to the FTP and AFDC groups in 1994 and early 1995, tracking
each person for at least four years after they entered the
study.
The FTP evaluation differs in one key respect from many
earlier random assignment studies, in which individuals
subject to a mandatory welfare-to-work program were compared
to people in a “control group” that was not required to
participate in employment services (but could do so voluntarily).
In this case, many members of the AFDC group were
subject to such mandates, in accordance with rules that
existed before FTP began. Thus, the study is assessing what
difference FTP made above and beyond the effects
of Florida’s pre-existing welfare-to-work program.
Findings
in Brief
FTP’s results were affected by the unusual environment in
which it operated – a period of low unemployment, highly
publicized changes in state and national welfare policies,
and an unprecedented 70 percent decline in Florida’s welfare
caseload. These factors shaped the outcomes of the AFDC
group — many of whom left welfare without the program —
and left little room for FTP to generate large impacts.
In addition, FTP was forced to begin operations very quickly,
with little time for planning, and early enrollees (who
are the focus of the study) entered the program before it
was running smoothly. For these reasons, the evaluation
results represent a conservative estimate of the program’s
potential. Nevertheless, FTP produced several important
effects:
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On
average, over the four-year study period, FTP increased
employment and earnings, reduced welfare receipt, and
modestly increased participants’ income.
Reflecting the rapid decline in Florida’s welfare caseload,
96 percent of the AFDC group left welfare, at least temporarily,
during the follow-up period, and less than 20 percent were
receiving benefits at the end of the period. Nevertheless,
owing in large part to its time limit, FTP substantially
reduced long-term welfare receipt: only 6 percent of the
FTP group received benefits for more than 36 months, compared
with 17 percent of the AFDC group.
The FTP group received, on average, about $700 (15 percent)
less cash assistance than the AFDC group and $500 (8 percent)
less in Food Stamps over the four years. The FTP group’s
earnings were about $2,400 higher, on average — more than
offsetting their losses in public assistance. Thus, compared
with the AFDC group, the FTP group had about $1,200 (5 percent)
more income from these sources over the four years and derived
a greater fraction of its income from earnings and a smaller
share from public assistance.
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The
pattern of results changed over time: At the end of
the follow-up period, the FTP group was less likely
to be receiving welfare, but no more likely to be working,
and the two groups had the same average income.
FTP’s positive effects on employment and income were concentrated
in years 2 and 3 of the follow-up period. During year 4,
the AFDC group “caught up,” and the two groups were equally
likely to be working at the end of period. The FTP group
was substantially less likely to be receiving welfare at
the end, but the impact on welfare payments was small in
dollar terms because neither group received much cash assistance
by that point. As a result, the two groups had about the
same combined income from earnings and public assistance
in the last few months of follow-up.
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At
the end of the four-year period, there were few differences
between the groups on most measures of economic well-being,
although, on a few indicators, the FTP group’s living
conditions appeared to be slightly better.
At the four-year point, members of the FTP group were somewhat
less likely to report having multiple housing problems and
more likely to report that they usually had at least enough
money to make ends meet. Otherwise, however, there were
few effects on a range of measures of material hardship.
FTP also did not affect marriage, fertility, or health insurance
coverage. Most people in both groups were off welfare and
working at the end of follow-up, but wages were low, and
economic conditions were poor for many families: Nearly
two-thirds of each group reported that they had experienced
at least one serious material hardship in the past year
— for example, being unable to pay their full rent or having
their telephone disconnected.
Among those least
at risk of long-term welfare receipt (based on their employment
and welfare history and other characteristics measured at
enrollment), the FTP group had about $4,200 (19 percent)
more earnings and $3,200 (11 percent) more income than the
AFDC group over the four-year period. In contrast, FTP barely
affected employment, earnings, or income for those most
at risk of long-term receipt. For a small group facing particularly
serious barriers to employment, FTP appears to have reduced
income: reductions in public assistance benefits —driven
in part by the time limit — were larger than increases in
earnings.
Among children who were 5 to 12 years old at the four-year
follow-up, FTP children were more likely than their AFDC
group peers to be in child care, and their parents were
more likely to receive child care subsidy assistance. FTP
children were also more likely to be cared for and to receive
financial support from their noncustodial fathers. On measures
of parenting and child well-being, however, there were few
differences between the two groups. For FTP adolescents,
there was a negative impact on school performance and an
increased likelihood of being suspended.
According to parental reports, FTP children in the families
least at risk of long-term welfare receipt had lower
levels of school performance than their AFDC group peers
and were more likely to have been suspended from school.
These effects were found for all school-age children, not
just adolescents. A detailed analysis focusing on the small
sample of 5- to 12-year-olds in this subgroup found that
FTP parents supervised their children less closely than
AFDC parents, perhaps because they were more likely to be
working near the end of the follow-up period. Notably, for
the most disadvantaged families (who were most likely
to reach the time limit), FTP had no impact, either positive
or negative, on child well-being.
Only 17 percent of the FTP group
reached the time limit in the study period; most of the
others left welfare and did not accumulate 24 or 36 months
of benefit receipt. Another 7 percent would have reached
the limit (they received at least 24 or 36 months of benefits),
but some of their months of receipt were not counted, usually
because they were granted a medical exemption.
Almost all of those who actually reached the time limit
had their benefits canceled, and fewer than half of these
individuals worked steadily in the post-time-limit period.
In-depth interviews found that many relied heavily on family,
friends, Food Stamps, and housing assistance. Few experienced
the most severe hardships — homelessness or hunger — and
most, whether working or not, struggled to make ends meet.
In this respect, families who reached the time limit were
similar to many other families in both groups who left welfare
for other reasons.
Saving money for taxpayers was not a central goal of FTP.
Florida initially approached time-limited welfare cautiously,
giving FTP almost unlimited funding for staffing, services,
and supports to ensure that FTP participants could achieve
self-sufficiency. Thus, the program’s net cost (the cost
of FTP over and above what was spent on the AFDC group)
was high relative to other welfare-to-work programs — nearly
$8,000 per person over five years. Offsetting welfare savings
were limited because most of the AFDC group left assistance
without the program.
Implications
Time limits have been among the most controversial features
of state and federal welfare reforms in the 1990s but, as
of late 2000, Escambia County is one of only a few places
where families have reached a time limit and had their benefits
canceled. On average, FTP’s combination of intensive services,
work incentives, and time limits substantially decreased
long-term welfare receipt while modestly increasing participants’
income. Moreover, the results are probably a conservative
estimate of FTP’s potential because the AFDC group was influenced
to some extent by the welfare reform environment. Perhaps
most important, the FTP experience shows that, under certain
circumstances at least, time limits can be implemented without
causing the widespread severe consequences predicted by
some critics of the policy.
But caution is in order. First, FTP’s results were not uniformly
positive. It appears that a group of families lost income
as a result of FTP, and the program generated negative effects
for some groups of children. In addition, the follow-up
was too short to allow final conclusions to be drawn about
the families whose benefits were canceled at the time limit:
Their complex coping strategies may or may not be sustainable
over the long term, particularly if the labor market weakens.
Finally, while there is little evidence that FTP made a
large number of families much worse off, the program also
has not yielded the dramatic positive impacts that were
anticipated by some proponents of time limits during the
national welfare reform debate.
Second, it is critical to consider the unique circumstances
under which FTP operated: far from any large city, in a
healthy economic climate, with ample resources for staff
and services. Moreover, some recipients facing very serious
barriers to employment (for example, health problems) were
exempted from the time limit, and those who were cut off
lost relatively little money (because Florida’s welfare
grant levels are low). These circumstances may have left
little room for FTP to achieve large positive effects (because
most of the AFDC group left welfare without the program),
but they also reduced the chances that the program would
cause serious harm to vulnerable families.
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