NCPA - National Center for Policy Analysis

More than Half of Recipients Left Welfare

October 31, 2001

Welfare rolls have fallen dramatically in the past few years -- by September 2000, they had fallen an amazing 57 percent from their historic high of five million families in March 1994. More than eight million people no longer relied on welfare.

The 1996 welfare reform act replaced Aid to Families with Dependent Children with a new program, Temporary Assistance for Needy Families (TANF). It ended the federal entitlement to welfare, replacing it with time-limited benefits and work requirements.

With the reform law up for reauthorization in 2002, policymakers are asking how much of the decline in welfare rolls is due to the reform law? How much is due to falling unemployment in the late 1990s? And how are those who have left the welfare rolls faring?

Reviewing a number of studies, researchers Douglas J. Besharov and Peter Germanis found general agreement on the relative impact of various factors on the decline.

  • Some 15 percent to 25 percent of declining welfare rolls was due to the economic expansion and increased availability of work.
  • About 30 percent to 45 percent was due to massive increases in other aid to the working poor.
  • As little as 0 percent to 5 percent was due to minimum wage increases in 1996 and 1997.
  • Another 30 percent to 45 percent of the decline was due to the welfare reforms.

Of those who have apparently left the welfare rolls permanently, between 60 percent and 70 percent of adults got jobs; but only about 50 percent to 60 percent of the mothers who have left welfare seem to be working regularly.

Mothers who left welfare but don't work appear to have other sources of support, including other forms of government assistance -- and for over two-thirds of them, help from families, friends or another adult in the household.

Source: Douglas J. Besharov and Peter Germanis, "Welfare Reform After Five Years," Policy Forum No. 1, October 2001, Acton Institute.

For Acton Institute study


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