Welfare Dependence, Recidivism, and the Future for Recipients of Temporary Assistance for Needy Families (TANF)

This paper examines welfare participation dynamics during 1993-96, the initial years of Iowa's welfare reform, a reform remarkably similar to the state's current Temporary Assistance for Needy Families (TANF) program. Analyses of the Family Investment Program (FIP) participation over the program's first two years show that, on average, FIP recipients stayed fewer months in the second year compared with the first, although a relatively large share of participants (36 percent) stayed on for the full two years. A fixed effects model and a semiparametric duration model are used to examine welfare dependence and recidivism. Iowa's experience suggests that human capital, child support, marital status, and the presence of children will be significant factors in reducing time on TANF and recidivism. Child support and wage income are crucial in determining the degrees of success for exiting and staying off, especially during the early months of the exit.