NCPA - National Center for Policy Analysis

Welfare Reform's Relation to Upward Mobility

April 6, 2015

The early 1990s saw the expansion of sweeping welfare reforms that increased class mobility through programs such as Aid to Families with Dependent Children (AFDC), the Earned Income Tax Credit (EITC) and the Personal Responsibility and Work Opportunity Reconciliation (PRWOR) Act. Welfare reform targeted parental income, which conservatives often see as a way to increase long-term opportunity available to children.

Studies attest to the effectiveness of such a strategy:

  • Columbia University found the rate of children living in poverty declined by 10 percent between 1990 and 2006.
  • The number of employed single mothers rose by 66 percent since the introduction of welfare reform.
  • A fall in the birth rate among unmarried African American women by 32 percent.
  • Reforms were effective at mitigating what could have been a child poverty peak during the Great Recession, with only a meager rise of 2 percent.

The success of the 1990s welfare reform is credited to its emphasis on poor, young and low-educated women who were seen by both the Bush and Clinton administration as serving vital economic and social roles in society. Still, many policy solutions can undergo significant innovation and improvement since past reforms did not target the skills of poor children, which is also believed to be a significant factor in easing economic mobility.

Source: Scott Winship, "Will Welfare Reform Increase Upward Mobility?" Economics21, April 3, 2015.        


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