Work and economic outcomes after welfare

Using data from the 1969 to 1993 Panel Study of Income Dynamics, this artic le examines a number of models to determine the characteristics of AFDC rec ipients who fare well economically after they initially leave the welfare s ystem. The study includes analyses of income levels, time spent employed an d not employed, and time spent below the poverty line. Hypotheses regarding state welfare payments, area economic conditions, human it capital and tim e spent receiving welfare are examined. The findings indicate that area emp loyment conditions and the ability to quickly find work greatly affect the likelihood of faring well economically after welfare. We found that time sp ent receiving welfare had some small negative effects on post-welare econom ic outcomes. However, former welfare recipients living in states with more generous welfare payments are as likely to work, to not use welfare, and ar e generally as well off as those living in states with less generous welfar e payments. These restults indicate that high welfare benefit levels may no t be a disincentive to work. The findings also indicate that women who have little job experience, who lack education, and who have many or move child ren after AFDC, fare economically worse than others.