NCPA - National Center for Policy Analysis

Welfare Declines Even As Economy Tumbles

September 5, 2002

Despite the dire earlier warnings of welfare reform opponents, economic lean times have not resulted in an explosion of new welfare applicants in major U.S. cities. In fact, welfare rolls continue to decline.

  • Even in New York City -- which has the largest number of public assistance cases of any city in the nation, as well as an increase in unemployment of more than 20 percent since March -- welfare cases are down 9.5 percent since the beginning of the year.
  • For 2001, 26 states saw rising welfare caseloads, but the overall number of people receiving welfare benefits fell by 5.6 percent.
  • A study of major U.S. urban centers done by New York City reveals that from January through May of this year, Chicago's Cook County experienced a decline of 6.9 percent in welfare caseloads, a drop of 1.3 percent in Detroit's Wayne County, and a loss of 2.9 percent in Los Angeles County.
  • Those compare with a drop of 4.1 percent over the same period for New York City.

Experts are hard-pressed to explain the trend. Some attribute it to improvement in the self-reliance of former recipients of public assistance. Others point out that single mothers often specialize in careers in health care, education and social services -- areas that grew strongly through 2001. In New York City, for example, 17.9 percent of single mothers are employed in education and social service jobs, a field that grew by 15 percent in the last two years.

Others observe that welfare and the state of the economy, surprisingly, have historically had weak statistical correlation.

Source: Leslie Kaufman, "Economy Dips While Welfare Drops," New York Times, August 31, 2002.

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