Work matters most
This is the third report in a series exploring the factors that most affect post-welfare outcomes of women who were on AFDC or the Wisconsin replacement, Wisconsin Works (W-2). The study tracks women who received AFDC in Wisconsin in 1990, following them through 1998, the year W-2, post-welfare reform, was completely implemented. For these 96,300 women we have two sets of data that have been combined. One is their welfare record, starting with their baseline personal information in 1990, followed by information on their receipt of monthly welfare and other forms of assistance. The second data set is their employment record, derived from their Unemployment Insurance file. Listed in this record are all the employers each woman had between 1990 and 1998, and about 20 characteristics of each employer.
The first report in the series (White & Geddes, 2001a) analyzed the characteristics of the employers with whom recipients had found employment. The second report (White & Geddes, 2001b) explored what happened to the women who left welfare and all other forms of support and who were not working in 1998. This third report builds largely on the first. It also examines welfare outcomes, but it combines the examination of employer characteristics with those of the individual women. This effort examines in detail the relative roles of individual characteristics and employer characteristics in determining earnings outcomes. It is a unique effort, as much of the work to date on employment and earnings outcomes of welfare recipients has focused only on the characteristics of the individual women. The contribution of this report is that it combines both supply and demand sides: the characteristics of the women and the characteristics of their employers.
Our intent in this third report is to recommend public policy aimed at increasing the proportion of these women who are able to earn incomes likely to make them self-supporting. As was originally reported, one quarter of these women earned incomes that averaged about $23,000 in 1998. The other three-quarters did not, either because they could not or because they did not attempt to do so in employment covered by unemployment insurance (the source of our data). By analyzing earnings outcomes in 1998, we hope to gain insight into what most determines those earnings and what in turn the public sector can do to increase the proportion of former recipients who succeed in earning these higher incomes.
The report first reviews what others have learned about this issue. We then examine the Wisconsin population to see what additional insights can be gleaned. We use both distributions and regression analysis to search for insights.
