NCPA - National Center for Policy Analysis

"Work First," Even in a Recession

February 7, 2002

In previous recessions welfare caseloads ticked up along with rising unemployment, perhaps because those last hired were first fired and, failing to qualify for unemployment insurance, turned to the social welfare safety net. But welfare caseloads haven't risen in lockstep with unemployment during the current recession, and even liberal analysts attribute this weakening link to the "work first" philosophy of the 1996 welfare reform law.

In fact, welfare caseloads have continued to decline in a number of states, and the overall increase in welfare rolls so far has been minimal, according to a new report by the National Campaign for Jobs and Income Support (NCJIS) released yesterday.

Nationally, welfare caseloads have declined by more than 50 percent since the mid-1990s, with most of the decrease occurring since welfare reform replaced Aid to Families with Dependent Children (AFDC) -- the principal federal cash welfare entitlement -- with Temporary Assistance for Needy Families (TANF), a block-grant program to the states that requires able-bodied adults to work and imposes time limits on assistance.

NCJIS, a coalition of welfare advocacy groups, surveyed 42 states and the District of Columbia to gather previously unpublished data on the number of families receiving welfare through TANF from March through December 2001; for the remaining eight states the study used the most recent data available (September 2001) and estimated December figures.

  • In the first ten months of the 1990-1992 recession, welfare caseloads rose in 41 of the 42 states that experienced rising unemployment; but in the first 10 months of the current recession, caseloads increased in only 32 of 47 states with higher unemployment.
  • And in 14 states with higher unemployment, welfare caseloads actually dropped, "in some cases significantly."
  • Nationally, caseloads have increased by an estimated one percent -- a total of 24,305 families.

Not only is this a smaller percentage increase than during the same period of the 1990-1991 recession, but because welfare caseloads have fallen from more than five million to about two million, far fewer families are involved.

Source: "The Weakening Link: Unemployment And Welfare Caseloads," National Campaign for Jobs and Income Support, February 6, 2002.


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