Explaining Differences in Welfare Caseload Declines Across California ’ s Counties 1

Content Provider	Semantic Scholar
Author	Nagavarapu, S.
Copyright Year	2002
Abstract	Focusing on welfare policy differences at the county level in California, this paper explores the reasons for the differing declines in welfare recipiency rates across the state’s counties. Using a regression framework, it attempts to isolate the effects of differences in counties’ economic characteristics, demographic characteristics, and policy choices on differences in counties’ recipiency rate trends. The paper concludes that two county policies, as well as a few demographic and economic characteristics, may help explain the differing trends in caseloads observed across the state. 1 I would like to thank Professor MaCurdy for his valuable assistance on this project during the last year and a half. I am also grateful to Dana Rapoport and Margaret O’ Brien-Strain for reading preliminary drafts of this paper. All remaining errors are no doubt my fault. Chapter 1: Introduction After the passage of the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (PRWORA) on the federal level, states were forced to reform their welfare systems dramatically. One key change among the several federal changes was that PRWORA replaced the federal entitlement to welfare with block grants to the states. Moreover, the new federal law implemented lifetime limits on the receipt of federal funds for welfare benefits and required a minimum level of work participation from many welfare recipients. On August 11, 1997, Governor Wilson signed the California Work Opportunity and Responsibility to Kids (CalWORKs) legislation, which brought California into compliance with the new federal law. While CalWORKs satisfied the new federal requirements, California’s welfare policy remained quite distinctive. Part of the reason for this was simply that California chose to have more generous benefits, and a less strict sanction policy, than many other states. Another aspect of CalWORKs that made it stand out from other states’ welfare programs was that California devolved an unusual amount of responsibility to its counties, allowing them a high degree of flexibility within the framework of CalWORKs. More than four years after CalWORKs was created, it is still unclear how effectively the program has helped welfare recipients attain self-sufficiency. To fully understand the effects of the reforms on the long term well-being of families will take time. However, even now, one feature of welfare reform in California is completely clear: For whatever reason, there have been large declines in welfare caseloads across the state. A convenient measure for the level of welfare caseloads that this paper will use extensively is a recipiency rate, which is defined as the number of welfare cases per thousand women aged 15 to 44. Figure 1.1 displays the steady decline in California’s recipiency rate since 1996, when welfare reform was enacted on the federal level. Moreover, this decline in caseloads is not confined to only particular parts of California. All but one county – Alpine – has had its recipiency rate fall in the period from October 1997 to December 2000, which will be the period on which this paper’s empirical analysis will focus. Seven counties – El Dorado, Mariposa, Napa, Placer, San Diego, San Mateo, and Sonoma – have 2 In calculating the recipiency rate, I choose to use the number of women aged 15 to 44. This is the most relevant segment of the population when considering welfare recipients, since a large proportion of recipients are women in this age group. Some researchers prefer to use the total population as the denominator in the recipiency rate calculation. Though this is also a reasonable measure, it is problematic because it includes groups that are not commonly found on welfare rolls, such as male senior citizens. Figure 1.1: Statewide Recipiency Rates 0 20 40 60 80 100 120 140 Ja n96 M ar -9 6 M ay -9 6 Ju l-9 6 Se p96 No v96 Ja n97 M ar -9 7 M ay -9 7 Ju l-9 7 Se p97 No v97 Ja n98 M ar -9 8 M ay -9 8 Ju l-9 8 Se p98 No v98 Ja n99 M ar -9 9 M ay -9 9 Ju l-9 9 Se p99 No v99 Ja n00 M ar -0 0 M ay -0 0 Ju l-0 0 Se p00 No v00 Month R ec ip ie n cy R at e seen their recipiency rate decline more than 50% over this period. In order to get an overview of how caseloads have fallen in different parts of the state, I examine the trends in caseloads by region. A convenient regional division of California is in “An Examination of Welfare Caseload Dynamics in California Using Administrative Micro-Data,” written by Gritz, Lieberman, Mancuso, and Scroggins. There, California is divided into five regions, each of which contains counties with similar economic and demographic characteristics. Figure 1.2 displays the five regions, which are the Bay Area, Los Angeles, Southern California (excluding Los Angeles), the Farm Belt, and the North and Mountain counties (Gritz, et al., 11). Table 1.1 lists the counties that each region includes. Throughout this paper, I will refer to these regions repeatedly, since they allow us to get a basic understanding of important patterns without resorting to an examination of each individual county. Every one of the five regions has seen an essentially uninterrupted decline in its recipiency rate. In Figure 1.3, I graph the recipiency rate trends in the late 1990s for each region. Table 1.1 Region Counties Included in Region Bay Area Alameda, Contra Costa, Marin, Napa, San Francisco, San Mateo, Santa Clara, Santa Cruz, Solano, Sonoma Los Angeles Los Angeles Other Southern California Orange, Riverside, San Bernardino, San Diego, Santa Barbara, Ventura Farm Belt Colusa, El Dorado, Fresno, Glenn, Imperial, Kern, Kings, Madera, Merced, Monterey, Placer, Sacramento, San Benito, San Joaquin, San Luis Obispo, Stanislaus, Sutter, Tulare, Yolo, Yuba North & Mountain Alpine, Amador, Butte, Calaveras, Del Norte, Humboldt, Inyo, Lake, Lassen, Mariposa, Mendocino, Modoc, Mono, Nevada, Plumas, Shasta, Sierra, Siskiyou, Tehama, Trinity, Tuolumne Figure 1.2 (from Gritz, et al.) Figure 1.3: Regional Recipiency Rates 0 20 40 60 80 100 120 140 160 180 200 Ja n96 M ar -9 6 M ay -9 6 Ju l-9 6 Se p96 No v96 Ja n97 M ar -9 7 M ay -9 7 Ju l-9 7 Se p97 No v97 Ja n98 M ar -9 8 M ay -9 8 Ju l-9 8 Se p98 No v98 Ja n99 M ar -9 9 M ay -9 9 Ju l-9 9 Se p99 No v99 Ja n00 M ar -0 0 M ay -0 0 Ju l-0 0 Se p00 No v00 Month R ec ip ie n cy R at e bayarea socal farmbelt northmtn losang Although the recipiency rate is consistently higher in the Farm Belt, the North and Mountain counties, and Los Angeles than in the Bay Area and Southern California (excluding L.A.), even these regions have seen large declines. In percentage terms, the Bay Area experienced the greatest decline in its recipiency rate between October 1997 and December 2000, a decline of about 44.8%. In contrast, Los Angeles had the smallest decline, a decline of 26.6%. The other three regions fall in between these extremes, as Southern California, the North and Mountain counties, and the Farm Belt had declines of 41.3%, 38.3%, and 31.8%, respectively. In absolute, rather than relative, terms, the North and Mountain region experienced the greatest decline in caseloads. The variability in caseload trends from one region to another emphasizes the fact that different parts of California have had different experiences in the post-reform period. Though most counties witnessed a rapid fall in their total welfare caseloads, some counties experienced greater caseload declines than others, as already mentioned. In fact, the standard deviation of the counties’ percentage change in recipiency rates from October 1997 to December 2000 is 12 percentage points. What explains these differences in caseload changes across California’s counties? On the national level, many researchers have tried to answer a similar question about the differences in caseload changes across the states. Most of their research focuses on disentangling the effects of three sets of factors – economic characteristics, demographic characteristics, and policy choices. To answer the question about differing caseload trends across California’s counties, we must confront the same issues. Just as on the national level, economic and demographic characteristics may help explain the movements in welfare caseloads in the counties. Holding all else equal, counties with stronger economies likely experienced greater caseload reductions than counties with weaker economies. Moreover, demographic characteristics in some counties may have increased the proportion of the population in danger of going onto welfare or have prevented welfare recipients from finding employment easily. Finally, just as there are significant differences in welfare policy from one state to another, there are important differences in policy choices from one California county to another. Unlike counties in many other states, California counties were given much flexibility in designing their welfare programs under the new welfare regime. Though choices made at the county level may not be as significant as choices made at the state level (such as setting the level of benefits), they are important nonetheless. To take an example, CalWORKs required adults on single parent assistance units to participate in work activities, such as unsubsidized employment or on-the-job training, for a minimum of 26 hours per week from July 1, 1998 to July 1, 1999. However, counties had the option of requiring up to 32 hours of participation per week in this time period. Requiring more hours of work per week could have strongly affected welfare caseloads, since some current recipients or potential recipients could have been unable or unwilling to participate this much. This paper will explore the effects of economic, demographic, and policy factors on recipiency rates in California’s counties during a period from late 1997 to late 2000, after the passage of CalWORKs. More specifically, it will try to answer the following research question: 3 The story of California counties’ experience in t
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