Uncovering racial disparities in local welfare-to-work program responses to the COVID-19 pandemic in California.

Background and Research Questions The welfare-to-work (WTW) program, also known as Temporary Assistance for Needy Families (TANF), encountered unprecedented challenges during the COVID-19 pandemic. The crisis disproportionately impacted low-income families, especially single mothers of color, by exacerbating economic instability and disrupting the work-caregiving arrangement. This study analyzes welfare sanctions and employment outcomes of California’s WTW system through a racial equity lens. It addresses these questions: How did welfare sanction and employment outcomes vary by race/ethnicity and pandemic status at the state and county levels? To what extent were county-level WTW provisions associated with employment outcomes, and did these associations vary by race/ethnic group?

Methods We leveraged non-deidentified data from multiple administrative datasets provided by the California Department of Social Services, notably including the innovative CalWORKs Outcomes and Accountability Review Data (Cal-OAR) that links social service and wage data from 2017 to 2023. We used multilevel (mixed effects) regression modeling to assess several WTW performance measures, such as cross-sectional sanction, resolution, and employment rates across three program stages for six racial/ethnic groups. We also conducted a longitudinal analysis of median earnings for multiple program exit cohorts, comparing data from program entry to the fourth quarter post-program exit. WTW provisions were measured by the extent of their emphasis on employment, human capital building, supportive services, and welfare non-compliance and sanctions (punitive provisions). We accounted for various county-specific socio-economic and demographic variables to reduce confounding effects. To test the robustness of our findings, we conducted thorough sensitivity analyses, which involved considering data from different sets of counties and employing alternative model specifications to ensure the consistency of our results.

Results Preliminary findings revealed significant disparities in sanction and employment outcomes among racial groups, with significant variances associated with pandemic phases. During the pandemic, Asian Americans and Native Americans/Pacific Islanders showed the highest rates of sanctions, with Asian Americans experiencing notably lower resolution rates statewide. Post-pandemic, Black, Hispanic, and Native American participants encountered increased sanction rates. Regarding employment outcomes, despite racial minority groups consistently outperforming Whites in employment rates across different program stages, some groups have experienced more significant declines in employment and earnings during the pandemic. Additionally, all racial groups experienced significant wage growth from program entry to the fourth quarter post-exit. Black participants, who started with the lowest wages, achieved the second-largest increases after Native Americans. However, participants in more punitive WTW systems experienced lower wage outcomes. In contrast, WTW provisions that enhance human capital have shown greater potential for increasing earnings. These associations are particularly evident among African American participants.

Conclusion and Implications This study sheds light on the complex dynamics of racial disparities in welfare sanctions and employment outcomes amid COVID-19. These findings have significant implications for developing WTW policies and practices that promote equity, particularly during economic crises.

Recommended citation: Chang, Y. L., Brown, C. T., Keh, M. (working). Uncovering racial disparities in local welfare-to-work program responses to the COVID-19 pandemic in California.