Changes to the Temporary Assistance for Needy Families program could leave five states that provide cash assistance to about 50,000 families out of compliance with federal requirements, new research finds.
Upjohn Institute Economist Gabrielle Pepin presents the research Friday, Jan. 3 at the Allied Social Science Associations’ annual meeting in San Francisco. See our full conference coverage.
Federal law requires at least half of each state’s work-eligible TANF recipients to be engaged in activities such as employment and job training for at least 30 hours per week. However, states have much flexibility in meeting this requirement because current TANF policies offer them several strategies to comply.
Researchers Pepin and Kane Schrader of the Upjohn Institute and Josep Nadal-Fernandez of Michigan State University detail six such strategies. Some amount to “creative accounting,” offering working families very small in-kind benefits to enroll them in TANF or moving nonworking recipients to other programs. Other strategies seek to drop nonworking TANF recipients regardless of the effect on their well-being.
The research identifies only one strategy that directly aims to move TANF recipients into jobs: subsidized employment programs. Other research has found this strategy can be effective at increasing employment and earnings and reducing benefit use.
Because states use different mixes of these strategies to meet federal work requirements, program changes coming when the Fiscal Responsibility Act takes effect in 2025 will affect them in different ways. The research finds that work requirements will become stricter in 24 states but looser in nearly as many – 22 states.
Five states – Georgia, Kansas, Montana, North Carolina and Rhode Island – would no longer meet federal work requirements under the new law. As those states scramble to get back into compliance, the researchers expect they’ll rely on “creative accounting” strategies rather than expanding the more-expensive subsidized employment programs.
Under both the current and new policies, federal work requirement benchmarks focus on whether TANF recipients work while they’re receiving benefits but don’t tie funding to whether people are working, and how much they’re earning, after leaving the program. Indeed, other studies have shown that TANF does little to improve recipients’ economic independence in the long term.
“As states lack incentives to address the structural barriers to steady, remunerative employment that many of their recipients face, the program falls short in its goal of encouraging self-sufficiency through work,” the researchers write.
A provision tucked into the new law could start to change this, however. Five states will pilot new performance measures based on recipients’ employment and earnings after leaving the program.
Policymakers could also close program loopholes and make program changes to reward states that invest in initiatives shown to encourage work, the researchers conclude.
Pepin presents the research at 2:30 p.m. Friday, Jan. 3 at the 2025 ASSA annual meeting.
See a full listing of Upjohn staff participation at the Allied Social Science Associations 2024 annual meeting. Follow the #ASSA or EconConf feeds on Bluesky.
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