Abstract

Using Iowa state administrative data for the period 1993-95, this paper explores why some low-income households successfully leave public assistance while others who leave later return. The authors examine the role of employment, child support, earnings, and other support such as the Food Stamp Program (FSP) for recipients who leave Iowa's Family Investment Program (FIP). They also examine reasons for recidivism over time, with specific attention to local labor market conditions and factors that differentiate areas by degree of rural/metro location. The data show that, among those active in FIP in all months of the two-year period, employment increased. Multivariate analysis of recidivism shows that during the first two quarters, those in nonmetro areas were more likely to return to FIP; however, after this initial period, the risk of return was very similar in the two areas. This analysis provides specific results for better understanding of the impact of recent reforms on low-income households in a state that is relatively rural.