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Press Release · June 22, 2000

Surprising Surge In “Child-Only” Cases Slows Decline In California’s Welfare Rolls

Welfare Trends in State Vary Dramatically by Case Type, Region; Immigration, Economy, Reforms Are Key Drivers

San Francisco, California, June 22, 2000 – California’s welfare caseload may be shrinking, but this overall trend is masking an unexpected increase in cases where children – but not their parents – receive public assistance, according to a new study released today by the Public Policy Institute of California (PPIC). “Child-only” welfare cases now represent over one-third of the caseload in California. The growth in these cases appears to be driven largely by immigration and some unintended consequences of state welfare policies.

Since 1994, California’s welfare caseload has declined by 30 percent. This reduction represents the largest numerical decline in the nation and results from the state’s size and much higher participation levels in the mid-nineties. Nevertheless, California’s welfare rolls have decreased at a slower pace than the rest of the nation, which saw a 47 percent drop. In The Rise and Fall of California’s Welfare Caseload: Types and Regions, 1980-1999, authors Thomas MaCurdy, David Mancuso, and Margaret O’Brien-Strain find that much of the disparity between California and the rest of the U.S. can be traced to the unique composition of the state’s caseload.

Although the stereotypical welfare family in the U.S. is a single parent receiving aid with her children, such families represent only 55 percent of current welfare cases in California. The remaining cases are either two-parent families receiving aid (11 percent) or child-only recipients (34 percent), predominantly the citizen children of undocumented immigrants. Between 1989 and the caseload peak in 1995, these two types of cases doubled, but single-parent cases grew by just over 25 percent. Since then, one- and two-parent cases have dropped substantially – largely the result of a booming economy– but the child- only rate is heading back toward peak levels.

“If we look only at the ‘typical’ recipients of public assistance, California’s recent welfare declines virtually mirror the nation’s,” said economist and PPIC research fellow Margaret O’Brien-Strain. “But California’s large and growing number of child-only cases means that it will be very difficult to achieve the overall drop-off in participation that we’ve seen in other states.”

The study found that two factors help explain the rise in child-only cases over the past decade: immigration trends in the early nineties and, most recently, state welfare reform. The legalization of 1.7 million immigrants under the Immigration Reform and Control Act of 1986 (IRCA) appears to have had a large effect on caseloads. Although the legislation included a five-year moratorium on benefits for IRCA immigrants, child-only cases skyrocketed in the late eighties as the citizen children of these largely impoverished immigrants joined the welfare rolls. Strikingly, the number of child-only cases dropped in the mid-nineties, when the moratorium ended and many families moved from child-only cases to one- or two-parent cases.

After this brief decline, the child-only caseload began climbing again in the wake of California’s welfare reform effort, CalWORKS. In fact, the child-only recipiency rate rose 11 percent between 1998 and 1999. The authors attribute this increase to the CalWORKS sanction policy, which allows children to remain on aid when adults lose benefits for failing to engage in welfare-to-work activities, such as job training. California is one of the few states with this type of sanction policy: Most other states remove the entire family from public assistance if parents fail to meet program standards.

“While we find that welfare reform in California has helped reduce the caseload overall, it does appear that state policy has had the perverse effect of contributing to the recent increase in child-only welfare cases,” said O’Brien-Strain. “This creates a real dilemma for policymakers: Sanctions that reduce only the adult portion of the welfare grant ensure a safety net for California’s children, but they also have the unintended and unfortunate consequence of allowing families to move beyond the reach of welfare-to-work efforts.”

No One Experience

The study also reveals dramatic geographic differences in welfare trends and in the key factors that drive caseloads in California – economic conditions, birth trends, and immigration. The Bay Area has seen the greatest percentage decline in welfare use over the last five years, largely the result of a mild recession in the early nineties, low non-marital and immigrant birth rates, and a disproportionately small share of undocumented immigrants. In contrast, a deep recession, high non-marital birth rates, and a massive surge in IRCA-related child-only cases have led Los Angeles County to experience the smallest caseload declines of any region in the state.

The state’s rural far northern and mountain counties continue to have higher welfare rates than metropolitan counties. This region faces very high and seasonal unemployment and significant rates of births to unmarried mothers. Since the early 1990s, however, these counties have seen a somewhat greater decline in welfare participation rates than the Central Valley and other farming regions of the state due to their low numbers of immigrants. The largely agricultural regions of the Central Valley and central coast have the highest welfare rates, driven by consistently elevated unemployment, the state’s top non-marital birth rate, and a high percentage of child-only cases. Despite these problems, caseloads in the farm belt have dropped more in absolute terms than anywhere else in the state.

“There is no one-size-fits-all welfare experience in a state as demographically and geographically complex as California,” concluded O’Brien-Strain. “And there is no one explanation for the trends in welfare use over time. While reform efforts – or simply the threat of reform and sanctions – have significantly affected the caseload in recent years, other factors like the economy and immigration have also played pivotal roles.”

The Public Policy Institute of California is an independent, nonprofit organization dedicated to objective, nonpartisan research on economic, social, and political issues that affect the lives of Californians. The Institute was established in 1994 with an endowment from William R. Hewlett.