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Press Release · September 11, 2003

Many Families Rise Above Poverty Line After Leaving Welfare, But Conditions for Others Are Bleak

One year after leaving California’s welfare rolls, most families have at least one adult member participating in the workforce – and many are earning enough income to put them above the federal poverty line – according to a new study released today by the Public Policy Institute of California (PPIC). However, the condition of a significant number of post-welfare families remains bleak, with some still falling below the poverty threshold and residing in crowded or substandard housing.

According to the analysis, What Happens to Families When They Leave Welfare?, about 90 percent of California families who leave welfare include a working adult one year later. Among single-parent families, the average monthly income is $2400 after one year, and among two-parent families, the average is $2300. This income is sufficient to bring nearly 70 percent of single-parent households and 55 percent of two-parent households above the federal poverty line.

Despite these positive findings, the picture is not entirely rosy: About one-third of all families who have not received welfare for a year have household incomes that fall below the poverty line. Conditions are more severe among two-parent families, where earnings are lower: Almost half live in crowded housing, and one-fourth reside in substandard housing. Inexplicably, these families have not returned to the state’s welfare rolls despite their poverty, according to PPIC adjunct research fellow Margaret O’Brien-Strain, who is also director of social policy at the SPHERE Institute. O’Brien-Strain coauthored the study with Thomas MaCurdy, a PPIC adjunct fellow and Stanford University economics professor, and Grecia Marrufo, a research associate at the SPHERE Institute. “One of the questions raised by our findings is how to help needy families who have made a break from the welfare system – and who don’t want to go back,” says O’Brien-Strain.

Indeed, some assistance is going unused: The study found that about 30 percent of one-parent and 40 percent of two-parent families who are eligible for Food Stamps are not receiving them, and one-quarter of one-parent and one-third of two-parent families are unaware of post-welfare child care subsidies available to them. Although the current debate in Congress over the reauthorization of federal welfare funds will largely determine future public policies, O’Brien-Strain says the findings suggest a need for policies aimed at providing vital information about post-welfare benefits. The study is based on extensive telephone surveys conducted in six San Francisco Bay Area counties during the late 1990s. Participants were first surveyed 5 to 10 months after leaving welfare, and then again after 11 to 16 months.

Please call Victoria Pike Bond at 415/291-4412 or Abby Cook at 415/291-4436 for further information.

The Public Policy Institute of California is a private, nonprofit organization dedicated to improving public policy in California through independent, objective, nonpartisan research on major economic, social, and political issues. The institute was established in 1994 with an endowment from William R. Hewlett.