Denote by T the spell duration of an individual participating in a government benefits program. T measures the length of time that an individual takes to exit the program. There are a variety of methods one can use to gain an understanding of the behavior of T. To investigate its behavior, we use data extracted from the 1987 panel of the Survey of Income and Program Participation (SIPP).

SIPP is a longitudinal panel survey conducted by the Census Bureau and designed to provide data on income distribution and poverty at the national level (see Nelson, et al, 1984, for an overview of the SIPP). The data collected in SIPP are often employed in the study of cost and effectiveness of Federal programs. Policy makers also entertain the data to evaluate the policies that motivate household independence form the welfare programs. Knowledge of the distribution of T permits us to make direct inference on the estimated cost of a relevant program. The dynamic behavior of T and the extent to which household characteristics affect the distribution of T, are crucial for our understanding of the effects of proposed changes in program regulations and benefit levels.