Heterogeneity is also important in current discussions of so-called welfare leavers—women who have left the welfare rolls subsequent to welfare reform. The employment and other outcomes of welfare leavers are likely to differ according to their labor market skill and background. Women with greater labor market skills may be expected to fare better off the rolls than women with weaker labor market skills, for example. The existing studies on welfare leavers typically report only average outcomes for all leavers and hence do not attempt to detect differences arising from heterogeneity, but such heterogeneity is certain to be present.2 Heterogeneity among leavers is also important because it may lead to differences in average outcomes of leavers across states, for different states have different mixes of recipient types. Hence surveys of how leaver outcomes vary in different states may be reporting differences that arise from differences in the types of women on the rolls in different states rather than the effects of different state welfare policies. The types of women who are on welfare also vary over time as the caseload shrinks and expands, as well for cyclical reasons, and this will cause the average outcomes of leavers to vary over time as well, depending on what types of women exit the rolls at different points in the cycle. Thus, for example, leaver outcomes before and after 1996 may differ because of the business cycle rather than because of welfare reform.3

Heterogeneity in the caseload can be characterized in many ways. A straightforward approach is simply to examine the distributions of characteristics thought to be related to labor market skill, income-generating potential, and general coping capabilities. Examining the distribution of recipients by education, work experience, health status, drug use and illegal activity, and similar variables, are typical for such an exercise. Many studies have examined these differentials. Another approach is simply to examine the labor market outcomes of those who have left the rolls, but this is not appropriate if the object of the analysis is to develop measures of heterogeneity that might be correlated with, or possibly determine or predict, those labor market outcomes.

The approach taken in this chapter instead examines heterogeneity as measured by the recipient’s own welfare experience (hence “experienced-based” measures of heterogeneity). The most important aspect of that experience is the amount of time the recipient has received welfare benefits, which is also a measure of the individual’s degree of welfare “dependence.” The most common measure of this type is the “total-time-on” measure, which denotes the total amount of time within a fixed calendar time interval that the individual has

2  

See Brauner and Loprest (1999) and Acs and Loprest (2001) for reviews. For studies that examined heterogeneity among leavers, see Cancian et al. (1999), Moffitt and Roff (2000), and Ver Ploeg (this volume).

3  

See Moffitt and Stevens (2001) for a study of how the types of women on welfare have varied over the business cycle in the past, and whether the change in the types of women on welfare after 1996 was different than what would have been expected from the effects of the economy alone.



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