The Shumlin administration’s proposal for capping welfare benefits hinges, in part, on the argument that time limits will induce Reach Up participants to find employment.
But a stack of reports that landed on lawmakers’ tables today pokes holes in this theory. The studies point to a number of insidious side effects associated with time limits, including an increase in infant mortality.
Margaret Nelson, a sociology professor at Middlebury College, handed the House Human Services Committee a long list of studies today that look at the impact of time limits on welfare recipients in other states.
A University of California Berkeley study found that welfare time limits lead to “deterioration of infant health.” After states put these limits in place, they registered “significant increases in infant mortality.”
A national study carried out by the National Bureau of Economic Research in 2001 examined how the time limits affect employment, labor supply, earnings,and family income for female-headed households. It draws upon survey data spanning from 1979 to 2000. The conclusions threaten to take the wind out of the sails of two of Shumlin’s proposals — the Reach Up cap and the plan to reduce the state’s portion of the Earned Income Tax Credit by $17 million.
The author of the National Bureau of Economic Research study, Jeffrey Grogger, found that although employment levels increased slightly when time limits were put into place, income levels didn’t budge. The authors suggest an explanation for this— “If time limits hasten the job search, the result may be jobs that are both less durable and less remunerative.” The study concluded: “The EITC may be the single most important policy measure for explaining the rise in work and earnings among female- eaded families in recent years.”
“Time limits have substantial effects on welfare use but smaller effects on employment, suggesting that time limits primarily move families off of the welfare rolls who were previously combining work and welfare,” Grogger wrote. “Other reforms and the EITC, in contrast, had similar effects on welfare use and employment, suggesting that they primarily moved non-working welfare families into the workforce. This suggests that different policies may be useful for achieving different policy objectives, such as reducing caseloads versus increasing work among welfare recipients.”
Another study — this one carried out by the MDRC, a nonpartisan social policy research organization and the Lewin Group in 2008 — found that people who are bumped off welfare due to time limits often remain in financial hardship. The findings showed that though homelessness has been “quite rare” among these families, levels of food insecurity and other hardships have been high.
Links to the other reports can be found here:
Time Limits: The Effects on Welfare Use and Other Consumption-Smoothing Mechanisms, November 2012
