Racial Disparities in Welfare Dependence and Financial Independence: Links to Human Capital, Local Economy, and State Temporary Assistance for Needy Families Policies

This secondary data analysis examined racial disparities in associations betwen welfare dependence/financial independence and human capital, local economy, and state TANF policies. A sample of 6,737 parents was extracted from the public-use data set titled “National Longitudinal Survey of Youth.” Results showed that restrictive TANF policies reduced African Americans’ likelihood of welfare use and increased likelihood of their financial independence. Multinomial logistic results also showed that, among Hispanics, employment growth in neighboring counties promoted welfare use; whereas among Caucasians such growth promoted financial independence. County poverty increased (a) Caucasians’ likelihood of welfare use and (b) Hispanics’ likelihood of being working poor; it decreased Caucasians’ and African Americans’ likelihood of financial independence. Across ethnic groups, education reduced likelihood of welfare use and working poor status; across minority groups, education increased likelihood of financial independence, but among Caucasians it decreased such likelihood. Across ethnic groups, occupational skills hindered dependence and improved odds of employment (regardless of welfare or poverty status). This study concluded the studied TANF policies and job markets were not color-blind. Interventions this study implies include less-restrictive TANF policies, generous support services, TANF staff cultural-competence training, and antidiscrimination rules. Research investigating particular TANF policies’ and services’ effects by ethnicity might prove useful.