Introduction

Welfare reform that emphasizes putting welfare recipients to work is the most successful public policy initiative of this century. As recently as five years ago, almost no one believed that by mid-1997 several states could cut their welfare caseloads - the number of people on welfare - in half. Yet according to the Department of Health and Human Services (HHS), between January 1993 and July 1997:¹

• Alabama reduced its welfare rolls by 48 percent.

• Indiana, Oklahoma, South Carolina and Tennessee reduced theirs by 49 percent.

• Mississippi's cases declined by 50 percent, Colorado's by 51 percent, Oregon's by 52 percent and Wisconsin's by 58 percent.

• Wyoming's cases dropped by an astounding 73 percent.

While most of the early successful reform efforts came from a handful of state initiatives, the federal government also played a major role by passing the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (PRWORA). This legislation, which ended the 61-year-old cash entitlement program known as Aid to Families with Dependent Children (AFDC), has forced even the most reluctant states to submit plans for welfare reform. The sweeping change has had an impact nationwide, and even states that are not aggressively pushing welfare-to-work are experiencing significant caseload declines.² In the 11 months since the bill went into effect, total welfare caseloads are down by almost 2 million, leaving some 10.2 million people still on welfare.³

In addition, welfare reform is saving both the states and the federal government hundreds of millions of dollars, while it is giving millions of low-income Americans who formerly got government handouts a sense of accomplishment and self-worth. No other American public policy initiative has achieved comparable results.

The important question is whether this positive trend can be continued, or even sustained. Some states were reluctant to join the welfare-to-work movement and have little to show for their efforts.⁴ For example, from January 1993 to July 1997, HHS figures show:⁵

• While the nationwide average decline in welfare rolls was about 24 percent, the decline was only 9 percent in Connecticut, 4 percent in Alaska and 5 percent in California.

• Washington, D.C.'s rolls dropped by a mere 2 percent.

• Hawaii had a 36 percent increase.

Can the differences between successful and unsuccessful states - or even the state moving backwards - be attributed to population, geographic or other demographic or economic differences? In a word, no. While those factors can cause some differences, they can hardly account for such wide variations in caseload declines.⁶ For example, Oregon - a welfare reform success story - is sandwiched between far less successful California and Washington. Both unsuccessful New Mexico and successful Wyoming have small, rural populations, including substantial native American cohorts.

The primary difference between successful and unsuccessful states is the policies adopted and the diligence with which they are implemented. In what follows, we analyze several states' policies and draw some conclusions.

Principles for Making Welfare Reform Work

Before federal welfare reform legislation was passed, 45 states and the District of Columbia had received federally approved welfare demonstration waivers.⁷ Some waivers were limited in scope to in-state pilot programs, while others were statewide. Thus most states and the Federal District were actively engaged in welfare reform, even if limited, long before Congress passed the national welfare bill. But not all have been equally aggressive or equally successful in implementing reforms.
[See Table I.]

Because of political and economic differences between the states, there is not and cannot be a single model for welfare reform. Success - and failure - have many faces. Even so, there are similarities among the successful states, just as there are among states whose caseloads remain high. What are the apparent ingredients for successful reform?

• First and foremost, a serious effort to move welfare recipients into jobs quickly, preferably private-sector jobs.

• A political commitment to reform that transcends one person or party.⁸

• A willingness to extend some health care, child care and other social service benefits for a period after the welfare beneficiary takes a job.

• A stress on personal, individual responsibility.

• An attempt to integrate social reform - such as making sure teen mothers attend school - with welfare reform.

• A reliance on private-sector services whenever possible.

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