NCPA - National Center for Policy Analysis

Indicators Of Welfare Reform Success

August 24, 1999

With welfare caseloads down an average of 45 percent since states started implementing welfare reforms in 1994, analysts are asking what has happened to ex-beneficiaries. Are they working, do they have more income, and have they escaped poverty?

They report that the law is working better than anyone dared to hope.

  • Basing its estimates on state studies, the General Accounting Office says that about 60 percent of former welfare mothers are employed -- and 80 percent have held a job at some time since they left the rolls.
  • Although there is no reliable national data on the income of ex-welfare mothers, the annual income of the bottom 20 percent of all mothers -- those making about $6,500 in 1997 -- increased nearly $500 from 1993 to 1997, according to the Census Bureau.
  • But over the same period, those mothers with average incomes of $13,500 gained nearly $3,000 in earnings and the earned income tax credit.
  • Overall poverty and child poverty declined in 1995, 1996 and 1997 -- while poverty among black children declined more in 1997 than in any previous year.

This year the U.S. will spend at least $80 billion providing low- income working families with cash income supplements through tax credits and other benefits such as child care. According to the Congressional Budget Office, some $45 billion of this amount is directly attributable to legislation enacted since the mid-1980s.

Welfare reform advocates point out that his new work-support system means that mothers who take minimum-wage jobs are far better off than mothers on welfare.

Source: Rep. Nancy L. Johnson (R-Conn., chairman, Subcommittee on Human Resources of the House Ways and Means Committee), "The Results Are In: Welfare Reform Works," Wall Street Journal, August 24, 1999.


Browse more articles on Tax and Spending Issues