When Work Is Not Enough: State and Federal Policies to Support Needy Workers

Chapter 7. Who Gets What?

The evidence presented in chapter 4 demonstrates that full-time, year-round minimum wage work combined with full participation in work support programs could result in significant material gains for needy working families. But this information does not necessarily indicate how the system actually performs. Do needy working families in fact participate in work support programs? How is program participation related to household characteristics? Do needy working families combine benefits from multiple work supports? Which programs do the most to help needy working families ? In other words, who gets what from the work support system? This chapter evaluates the work support system at the national level in terms of the material support it provides to poor and near-poor working families using a subsample we created from the March supplement of the 2002 Current Population Survey (CPS). The CPS March supplement is the principal data source for program participation, income, and work experience among Americans. Approximately 60,000 housing units are chosen for the main CPS sample, reflecting the labor force and demographic conditions of individual states. An additional 12,000 housing units are included in the March supplement.1 In this chapter (and appendix C) CPS data are aggregated at the national level for individuals and households. Our sample focuses on families with total incomes below 200 percent of the federal poverty standard. We linked these families to their individual members and the households in which they reside. We then determined whether any individual within the household was a “worker”; that is, had 129 7 Who Gets What? 1. Census Bureau (2002b). 07-8191-1 ch07 11/2/05 4:21 PM Page 129 earned income, including income from self-employment or farm selfemployment . All households containing at least one worker were included in the subsample. Thus the sample is a set of households containing families with incomes below 200 percent of the federal poverty standard, in which at least one household member is a worker. By linking data on individuals and families to households and aggregating work support program participation data at the household level, we provide the most comprehensive picture of work support participation possible. The individuals, families, and households included in the subsample are described in appendix C. There are two noteworthy limitations to the CPS data. First, the data are self-reported. If respondents have faulty recollections about the benefits they received, income sources, or work history, these faults are reflected in the data. Some respondents are reluctant to acknowledge participation in programs to which stigma is attached; this may reduce reported participation rates for some means-tested programs, especially Temporary Assistant for Needy Families (TANF), food stamps, and medical assistance. Second, CPS data are likely to systematically underestimate participation in the Children’s Health Insurance Program (CHIP), because the Census asks about this only as a follow-up question for Medicaid participants. Our sample is composed of households that contain poor and near-poor families that are supported by at least one worker. The composition of our sample reflects concerns about income and work effort that are common in studies of the relationships between work, poverty, and income support programs . The Department of Labor defines the working poor as “individuals who spent at least 27 weeks in the labor force (working or looking for work), but whose incomes fell below the official poverty level.”2 Our sample is more liberal in its income criterion but more strict in terms of work effort because merely looking for work is insufficient; to be included in our sample, someone in the household must be a worker. Gregory Acs, Katherin Phillips, and Daniel McKenzie have defined low-income working families as those with incomes below 200 percent of the federal poverty standard, with adult family members working an average of at least 1,000 hours per year.3 Our sample uses the same income criterion but is more liberal regarding work effort because we do not require a minimum threshold of work hours. Our evidence suggests that work support program participation is widespread but not extensive. Although many households that contain needy working families are touched by the work support system, few receive bene130 Evaluating Work Support Performance 2. Bureau of Labor Statistics (2002). 3. Acs, Phillips, and McKenzie (2001). 07-8191-1 ch07 11/2/05 4:21 PM Page 130 fits from numerous programs. This finding is significant because the potential material gains described...