The 1996 Personal Responsibility and Work Opportunity Reconciliation Act (PRWORA), also known as welfare reform, gave states considerable flexibility and responsibility for formulating and implementing initiatives to reduce welfare dependency and to encourage employment among adult members of low-income families with children. Under the PRWORA, most welfare recipients face a lifetime limit of 60 months of federal funding and must meet certain work requirements to receive assistance. Prior to the enactment of the PRWORA, several states modified their welfare programs under waivers granted by the federal government that allowed them to implement innovative demonstration projects to move people from welfare to work.

Changes in the welfare system, under waivers and the PRWORA, have increased interest in information about the use of programs, the characteristics of participants, the length of participation, and benefit amounts.

This report focuses on the characteristics and participation of people who received benefits from any of the following means-tested assistance programs:¹

• Temporary Assistance for Needy Families (TANF)
• General Assistance (GA)
• Food stamps
• Supplemental Security Income (SSI)
• Medicaid
• Housing assistance

The data cover calendar years 2001 through 2003² and provide a set of baseline estimates to study the effects of the reforms.³

The data come from the 2001 panel of the Survey of Income and Program Participation (SIPP).⁴ SIPP is a longitudinal survey, which means that, unlike periodic point-in-time surveys such as the Current Population Survey, SIPP follows the same people over time. This longitudinal quality allows examination of the SIPP sample from two perspectives.

First, the same people can be observed over a span of time. The number of months within a period of time when individuals received benefits from one or more means-tested assistance programs can be examined, and entry and exit activity levels can be measured. For example, the number, timing, and duration of people moving into and out of a particular situation within a period of time can be studied, such as the length of time an individual continuously receives program benefits.

Second, a population of interest can be analyzed at single points of time over regular intervals measuring gross activity levels. This cross-sectional perspective captures changes over time in the level of an activity, such as the proportion of the population receiving assistance from a particular program at selected points in time.

The first section of this report examines means-tested program participation rates and the extent to which the programs are used. The second section looks at spells of program use by participant characteristics. The detailed statistical tables analyzed in this report are provided at the end of the report.

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¹ Means-tested programs are those that require income and/or assets of an individual or family to fall below specified thresholds in order to qualify for benefits. These programs provide cash and noncash assistance to eligible individuals and families.

² The longitudinal estimates presented here are based on people who were interviewed in all waves of the reference period or for whom imputed information exists. Efforts were made during the life of the panel to ensure that the sample remained representative of the noninstitutionalized population of the United States by attempting to follow people who moved to new addresses. If the people included in the estimates have different experiences in program participation than those who did not respond initially, left the sample, or missed two or more consecutive waves, these longitudinal estimates may be biased. The panel consists of four rotations interviewed in consecutive months. For individuals in the fourth rotation group, monthly data were collected for January 2001 through December 2003. For individuals interviewed in rotations 1, 2, and 3, monthly data were not collected for all months at the end of 2003. For rotations with missing data at the end of 2003, imputations were made on the basis of the closest month of data available and then moved forward. For example, individuals interviewed in rotation 3 had 1 month (December) of data imputed in 2003; rotation 2 had 2 months (November and December) imputed in 2003; and rotation 1 had 3 months (October, November, and December) of imputed data in 2003.

³ Part of the PRWORA directed the U.S. Census Bureau to field a new survey to collect the data necessary to evaluate the impact of welfare reform. To carry out that directive, the Census Bureau created the Survey of Program Dynamics (SPD). The SPD collected data on state welfare programs and the social, economic, demographic, and family changes that may affect outcomes of the reforms. For each of the 6 years from 1996 through 2002, the Census Bureau collected data from households previously interviewed in the Survey of Income and Program Participation (SIPP) from 1992–1994 or 1993–1995. Cross-sectional data from the SPD were released after the 1997, 1998, 2001, and 2003 surveys. The first longitudinal file from the SPD was released in the summer of 2001 and the second longitudinal file was released in the fall of 2002. The third longitudinal file was released in March 2006. For more information about SPD, see the SPD Web site at <www.sipp.census.gov/spd/>.

⁴ The data in this report were collected from February 2001 through January 2004 in all 9 waves (interviews) of the Survey of Income and Program Participation (SIPP). The population represented (the population universe) is the civilian noninstitutionalized population living in the United States. The sample of households in the SIPP is divided into four interview groups called rotation groups. Each month, 1 of the 4 rotation groups is interviewed about the previous 4 months (the reference period). The 2001 SIPP panel covered the period from January 2001 to December 2003. Data for all four rotation groups (the full sample) are available for 36 continuous reference months, the calendar months of January 2001 through December 2003.