NCPA - National Center for Policy Analysis

Off Welfare, Better Off

October 1, 2002

Welfare rolls nationwide have fallen by more than 50 percent since welfare reform was enacted in 1996. The goal of reform was to move families on welfare -- the vast majority of which are headed by single women -- from dependency to independence through work. How successful has reform been?

  • Both national surveys and state data show that the women most at risk for long-term welfare receipt have left the welfare rolls at rates as fast as or faster than women who are much less at risk.
  • In the states studied in depth, most of those leaving the welfare rolls have found employment, increased their incomes relative to welfare recipients and are gradually moving up the income ladder; a majority of those who have left say they feel they are better off.

During the booming economy of the late 1990s, welfare reform critics claimed that the good economy was primarily responsible for the fall in welfare rolls. They predicted that if the good times ended, welfare rolls would rise. Yet despite the increase in unemployment following the 2001 recession, many states continued to reduce their welfare rolls.

That is because most significant factor in caseload reduction is state policies. The states that have been less successful have had ineffective sanctions, high benefit levels and other counterproductive policies. Without any changes in federal law, the states that have failed to reduce their welfare rolls by as much as the average could adopt more effective policies. The impact would be significant:

  • If the 23 less-than-average states had done as well as the average state, more than 800,000 additional people would have left welfare.
  • Instead of a 59 percent reduction in welfare rolls since 1993, the United States would have 66 percent fewer welfare recipients.

Source: Joe Barnett, "Better Off Welfare," NCPA Policy Report No. 255, October 2002, National Center for Policy Analysis, 12770 Coit Rd., Suite 800, Dallas, Texas 75251, (972) 386-6272.

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