RELEASE: September 29, 2003

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People who left welfare for work continue to enjoy rising incomes and lower incidence of poverty or other personal crises, but their economic progress slowed last year, according to an ongoing survey of 2,000 former and current welfare recipients.

The study's authors – Mathematica Policy Research of Princeton – attributed the slower economic growth to the national recession and the fact that larger gains were made early in New Jersey's welfare reform program, Work First NJ, when many job-ready clients were able to move quickly from welfare to work.

For the first time this year, Mathematica gathered data on marriage in light of the federal effort to earmark welfare funds for family formation programs. The survey found that married clients have greater incomes, yet those benefits might prove temporary because more than one-third of the people who married after entering welfare were separated or divorced within three years.

"This research shows that steady employment is the obvious key to self-sufficiency in the long term," said Human Services Commissioner Gwendolyn L. Harris. "We must continue to focus on addressing barriers that might prevent people from working, helping people find work, and providing support services so they can continue to work.

"The marriage data in this report is interesting, particularly in light of the federal discussions about constructing interventions relating to marriage, though I don't know that we have enough here to base firm conclusions about the prospects of such programs. This data reflects the experience of our clients, without intervention, and many of the marriages that failed involved people who had prior relationships before welfare."

The survey – taken between February and June of 2002, an average 53 months after the sampled clients began participating in the Work First NJ program – was the fourth client study by Mathematica. The Department of Human Services (DHS) hired Mathematica in 1998 to conduct the surveys and other research to evaluate the Work First NJ program.

About 1,600 of the 2,000 sampled clients responded to the 2002 survey, the same 80 percent response rate for surveys taken in the prior three years.

Half of the clients who responded were off welfare and working. About 21 percent of the sample remained on welfare, and most of them were not working. The remaining 28 percent were off welfare but not working, surviving on incomes that tend to be well below the poverty line.

"I am concerned that we still have a significant number of people who remain on welfare after several years," said Commissioner Harris. "With the five-year lifetime limit on welfare benefits, we need to ensure that we are doing all we can so that those clients are able to work.”

To address the issues facing long-term welfare clients, Commissioner Harris directed the Division of Family Development (DFD) to conduct comprehensive assessments of every client after they have received welfare benefits for 12 months. Those assessments – which evaluate a client’s job history, skills, literacy level, and barriers such as mental health issues or substance abuse – were originally done after clients had spent 34 months on welfare.

“This change will help us identify barriers to employment early and give us more time to resolve those issues,” Commissioner Harris said.

The Commissioner also initiated a pilot program that provides a two-year extension of benefits and intensive case management services for those clients who have cooperated with program rules yet exhausted their five-year limit. Clients will begin entering that program in October.

The Mathematica survey reported somewhat encouraging economic data for the surveyed clients, particularly those who are off welfare and working.

The average hourly wage for clients who are working was $9.10, up from $7.88 in 1999, after adjusting for inflation.

Among all clients, total income – which includes earnings, unearned income such as child support, and government benefits such as welfare, Food Stamps, and Supplemental Security Income – was $1,543 per month. That figure is up 33 percent from 1999, when total income averaged $1,157 a month after adjusting for inflation. However, the total income rose only modestly from 2001, when the average monthly income was $1,501.

Those who were off welfare and working fared the best, averaging a monthly income of $2,088 at the time of the 2002 survey.

The clients who are off welfare yet not working have the lowest incomes reported in the survey. Most of those clients have some stable source of income, such as a working spouse or partner or other government benefits, such as Supplemental Security Income.

However, 40 percent of them – or 1 in 10 of all surveyed clients – lack stable alternative supports and live on an average monthly income of $500. Those families often must rely on family and friends to survive. Many people in this group move back onto welfare or into jobs within a year.

Among the entire sample, about 47 percent had incomes below the Federal Poverty Level, down substantially from 65 percent at the time of the first survey in 1999. Again, people working and off welfare fared best, with only 20 percent of that group living below the poverty line.

During the year prior to the 2002 survey, 19 percent of the sample experienced housing crises, such as having water or electric cut off, moving in with relatives or friends, or living in emergency shelter. That was down from 30 percent in 1999.

About 30 percent of the sample clients reported food insecurity or hunger, compared to 36 percent in 2000.

The level of food insecurity remains troubling, Commissioner Harris said, and they show the need to continue outreach programs that target people who are eligible for food stamps yet do not receive them. About 150,000 households in New Jersey receive food stamps, but the federal government estimates that represents only about 53 percent of the households that are eligible.

The DFD began an advertising campaign this summer, with the slogan "Everyday People Use Food Stamps Every Day," in an attempt to lift the stigma often attached to food stamps. In addition, the division has begun system improvements to help make it easier for people to get apply for and receive food stamps.

The 2002 survey featured Mathematica's first attempt to collect and analyze data in response to the national debate over using welfare funds to promote family formation.

The data showed that marriage is rare: only 9 percent of the women who were single upon entering welfare were married and living with their spouses at the time of the survey in 2002.

Generally, married clients have significantly higher incomes -- an average of 165 percent of the Federal Poverty Level, compared to 110 percent for single mothers.

However, the marriages tend to be unstable. Among people who were single upon entering welfare but married before the first survey in 1999, 37 percent were no longer married or living with their spouses in 2002. Mathematica reported that the rate of marital breakup for the general population, during a similar three-year period, was 12 to 15 percent.

People who were already married when they entered welfare had a divorce rate that matched the general population, the survey found.

The full report is available on the Internet at the DHS site, www.state.nj.us/humanservices, and the Mathematica site at www.mathematica-mpr.com.

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