Better Off Welfare

Policy Reports | Welfare

No. 255
Monday, October 07, 2002
by Joe Barnett


"Welfare reform has reduced the caseload by more than 50 percent."

Welfare rolls nationwide have fallen by more than 50 percent since the enactment of federal reforms in the 1996 Personal Responsibility and Work Opportunities Reconciliation Act (PRWORA). The law set a five-year lifetime limit for future receipt of federally funded welfare and required work by an increasing proportion of able-bodied adult welfare recipients. It also ended the federal welfare entitlement, replacing Aid to Families with Dependent Children (AFDC) with Temporary Assistance for Needy Families (TANF). The act gave states flexibility in reaching the goal of putting 50 percent of able-bodied adult welfare recipients to work or removing them from the rolls. The result was 50 state experiments in reform. Some of these have been very successful in reducing welfare rolls, while others have had little impact.1

Congress is now debating reauthorization of the law. Since less than half of the caseload of able-bodied adults on welfare has been required to work, and welfare rolls have fallen little in some states, opportunities for substantial further reduction in welfare caseloads abound. Thus the Bush administration proposed, and the U.S. House of Representatives in May passed, a reauthorization bill requiring states to put more of those on welfare to work or remove them from the rolls.2

However, the goal of welfare reform was not simply to reduce the number of welfare cases. It was to move families on welfare - the vast majority of which are headed by single women - from dependency to independence through work. The two principal questions about the success of welfare reform are: Have the easiest-to-employ women left welfare, leaving the "hardest" cases behind? And are the families that have left welfare better off?

Before 1996, there was little interest in answering these questions.3 However, in recent years, separate U.S. Census Bureau and nongovernmental surveys have provided data on the employment and income of those who have left welfare. In addition, academic researchers have examined the experience of welfare "leavers" in specific states. Although research continues, the evidence already gathered and analyzed leads to some surprising conclusions.

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