ly measures of recipiency are largest in the SSI program, which provides benefits to individuals and couples, not to families.
Spells of program recipiency (Indicator 7), spells of welfare receipt with no attachment to the labor market (IND 8) and spells of poverty (ECON 5) are limited to those spells that begin during the SIPP panel of observation. Spells separated by only 1 month are not considered separate spells. If an individual has two or more spells of dependency, receipt, or poverty, each is counted separately in the analysis.
Data Source for Dependency Measure
Beginning with the 2001 report, there was a shift to using CPS rather than SIPP data for our main welfare dependency measure (as well as several other indicators and predictors of welfare recipiency and dependence). This change was necessary because CPS data are updated annually, while SIPP updates are available less frequently.
The CPS data have been widely used to measure trends since the welfare reform legislation of 1996. However, because the CPS does not collect income information in the same detail as the SIPP, it has been subject to criticism for higher levels of underreporting of income, particularly welfare income. To address this concern, our measure of dependency (as well as some of the other indicators in this report) are based on CPS data that have been analyzed by the Transfer Income Model (TRIM3), a microsimulation model developed by the Urban Institute under contract to the Office of the Assistant Secretary for Planning and Evaluation. Although its primary purpose is to simulate program eligibility and the impact of policy proposals, the TRIM3 model also has been used to correct for underreporting of welfare receipt and benefits. Welfare caseloads in TRIM3 are based on CPS data, adjusted upward to ensure that total estimates of recipients equal the total counts from administrative data. To maintain consistency in data trends, we present estimates based on CPS data analyzed by TRIM3 beginning in 1993, the first year the TRIM3 microsimulation model became available.
As shown in Figure D-1, the overall measures of dependency and recipiency have not been greatly affected by the change in data sources. Both data sources show a decline in dependence between 1996 and 1999 and increases in dependence during the 2000s. Still, readers are cautioned against comparing measures for 1987-1995 from the SIPP data in the first three annual reports with the measures for 1993 and later from the TRIM3-adjusted CPS data.
Figure D-1. Recipiency and Dependency Rates from Two Data Sources: 1987 – 2011
Note: Recipiency is defined as living in a family with receipt of any amount of AFDC/TANF, SSI or SNAP during the year. Dependency is defined as living in a family having more than 50 percent of annual family income from AFDC/TANF, SSI and/or SNAP. Dependency rates would be lower if adjusted to exclude welfare assistance associated with working. While only affecting a small number of cases, General Assistance income is included within AFDC/TANF income and veterans’ pension benefits are included in means-tested assistance income for SIPP-based receipt and dependency estimates prior to 2001.
Source: Unpublished tabulations from the Current Population Survey, Annual Social and Economic Supplement, 1994-2007, analyzed using the TRIM3 microsimulation model, and unpublished tabulations from the Survey of Income and Program Participation, 1987, 1990, 1992, 1993, 1996, 2001, 2004, and 2008 panels.