Income Maintenance Programs and the Child Welfare System:

In each of the states, a small proportion (under 3%) of children who entered AFDC in our study period moved to foster care (see table 1 below). However, although these are small proportions, the majority (60%) of entries to foster care in each of the states were from AFDC and therefore, the small flow from AFDC accounts for a large flow into foster care. Furthermore, most children who enter foster care from AFDC do so while receiving AFDC. In fact, the vast majority (85% in Illinois, 96% in California, and 90% in North Carolina) in our study enter foster care before the AFDC case closes. A typical transition pattern is not one in which an AFDC case closes and an entry to foster care occurs, but rather one in which a child enters foster care from an active AFDC case. Therefore, if one focuses on exiting cases, one will miss the majority of children entering foster care through the welfare system.

As one would expect from current foster care caseload dynamics, infants are nearly three times as likely to enter foster care from an AFDC spell than are 15-17-year-olds in North Carolina and California, and four times as likely in Illinois. We also find that all children receiving AFDC, but especially infants, are more likely to enter foster care relatively quickly — within the first ten months — after entering AFDC. These findings suggest that for young children, there may be a link between the stress or crisis that propels families onto the AFDC rolls and a child's entry to foster care. It also suggests that young children, being the most vulnerable developmentally, should be a primary focus of the monitoring of welfare reform.

Kinship care in Illinois and California has been used as a formal foster care placement. There is some reason to believe that the dynamics of entry to kinship care in contrast to other types of foster care are different, since relatives may be taking care of a child informally prior to the intervention by the child welfare agency and therefore, coming directly from an AFDC less often. Here we find evidence for this difference, although the difference is of greater magnitude in California than in Illinois. In California, it is 160% more likely that a child from an AFDC grant enters non-kinship foster care placements than kinship foster care and in Illinois, the likelihood is 60% greater.

In summary, the transition dynamics between AFDC and foster care across states are very similar on many parameters. The consistency across states in the numbers participating in AFDC and Medicaid prior to foster care entry suggests that poverty, or perhaps participation in welfare program, plays an important role in the entry of children into foster care. Also, it is clear that infants are at greatest risk, and that the birth of a new child is a time when the child welfare system is most likely to intervene in a family's life.

The Experience of A Social Safety Net Program for Children in the Income Maintenance Program:

The three states vary greatly in the patterns of transition of children from AFDC to Medicaid. North Carolina reports many more children leaving AFDC within one year of entry (73%) than Illinois (47%) or California (42%) (see table 2). North Carolina, as a result of the shorter durations of AFDC receipt, has the highest percentage of children who move to Medicaid at one year (31%), as well as the highest percentage of children (42%) who have left the welfare system entirely at one year.

Even though the percent of children leaving AFDC at one year is similar in California and Illinois, destinations vary tremendously. California reports nearly twice as many children entering Medicaid from AFDC than in Illinois (23% vs. 12%). Illinois, on the other hand, reports twice as many children who exit the system entirely. California, as a result, has the highest percentage (55%) who receive Medicaid after their exit from AFDC. It should be noted that during 1995-1996, North Carolina and California were making special efforts to enroll children in Medicaid when their parents went to work.

Transitions from AFDC to a system exit are most likely among the oldest children in all three states. This suggests, consistent with other findings, that families with the youngest children are the most acutely needy and likely to remain on AFDC longer than families with older children. Also, it suggests that some older adolescents may be less attached to their families and are becoming independent prior to the age of majority.

With its dual emphasis on work and time limits, welfare reform is likely to result in more and earlier exits from cash assistance. As noted, families entering the workforce are offered continued health coverage through Medicaid for a transitional period after finding employment. Clients who reach stipulated time limits by first securing employment will continue to be eligible for Medicaid. Furthermore, in many states, extended Medicaid coverage under the new Children's State Health Insurance Program (CHIP) will likely mean that more families will have health insurance for their children at higher income thresholds. Thus, because more TANF families will join the ranks of the working poor, and because time limits and stiffer sanctions for noncompliance with work requirements have been mandated, we expect a higher percentage of TANF recipients to transition to receiving Medicaid assistance. A pressing policy question is what proportion of TANF exiters will completely exit the system without participating in any social safety net programs.

After two and one-half years of reform, the nation's AFDC caseloads have dropped precipitously cut in half in many states. With the first five-year time limit approaching in 2002, policymakers will want to plan for the loss of the income assistance for those families remaining — those with the most severe obstacles to entering the workforce. States have responded quite differently to those who have left income maintenance programs as our findings around the use of transitional Medicaid suggest. Those making the transition to the workforce will also need support services, in part to address the needs of their children. Children's well being is and will remain at the forefront for policymakers. This report offers a framework for monitoring the response of the welfare system to changes in policy and economic conditions.