Making Welfare Work

Policy Backgrounders | Welfare

No. 143
Thursday, December 04, 1997
by Dr. Merrill Matthews & Kristin A. Becker


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.

"In the 11 months since the welfare reform bill went into effect, caseloads are down by almost 2 billion"

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.

"Some states have little to show for their efforts - and Hawaii had a 36 percent increase in its welfare rolls."

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.


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