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November 2002, Vol. 125, No.11
Welfare reform impacts in SIPPRichard Bavier
Nearly 6 years after enactment of the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (PRWO or simply "welfare reform") most analysts have found generally positive outcomes. Welfare dependence has declined; by 1999, average monthly welfare caseloads stood at less than half the 1994 pre-reform peak for the predecessor Aid to Families with Dependent Children (AFDC). In addition, the economic status of women who head families with children, the group affected most directly by welfare reform, has improved according to annual data from the March Current Population Survey (CPS).1 After a post-1995 dip, even the poorest families showed economic gains in 1999 and 2000, though these were lost in the recession year of 2001.
Analysis of expenditure levels provides a more optimistic picture.2 Several samples specially created to monitor what happened under the new program, Temporary Assistance to Needy Families (TANF), have also reported income gains. The Urban Institute’s National Survey of American Families found that families leaving welfare in 1999 did as well or better economically than 1997 leavers.3 Researchers employing data from the Women’s Employment Project, find that "work pays" for post-reform welfare leavers.4 However, other researchers have also found that some families lost ground economically after leaving welfare. In their first year off the rolls, nearly half of all leavers had average monthly income lower than their last months on welfare.5
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1 The Current Population Survey is a monthly survey of approximately 60,000 households, which provides data on the labor force status of individuals, including demographic characteristics. Wendell Primus, Lynett Rawlings, Kathy Larin, and Kathyrn Porter, "The Initial Impacts of Welfare Reform on the Economic Well-Being of Single-Mother Families with Children" (Washington, DC, Center on Budget and Policy Priorities, 1999). Richard Bavier, "Material Well-Being," in Douglas Besharov, ed., Family Well-Being After Welfare Reform (College Park, MD, University of Maryland School of Public Affairs, 2002), available on the Internet at: http://www.welfare-reform-academy.org.
2 Bruce D. Meyer and James X. Sullivan, "The Effects of Welfare Reform: The Material Well-Being of Single Mothers in the 1980s and 1990s," Working Paper 206 (Chicago, IL, Joint Center on Poverty Research, 2000).
3 Pamela Loprest, "How Are Families That Left Welfare Doing? A Comparison of Early and Recent Welfare Leavers," Assessing the New Federalism Policy Brief B–36 (Washington, DC, The Urban Institute, 2001).
4 Sheldon Danziger, Colleen Heflin, Mary E. Corcoran, and Elizabeth Oltmans, "Does It Pay to Move From Welfare to Work?" Journal of Policy Analysis and Management, Fall 2001, pp. 671–92.
5 Maria Cancian, Robert Haveman, Thomas Kaplan, and Daniel Meyer, "Work, Earnings, and Well-Being after Welfare: What Do We Know?" Working Paper 73 (Chicago, IL, Joint Center on Poverty Research, 1999); Richard Bavier, "Welfare reform data from the Survey of Income and Program Participation," Monthly Labor Review, July 2001, pp. 13–24; and Sheila Zedlewski, "Family Incomes: Rising, Falling, or Holding Steady?" Panel presentation at the Fall 2001 conference of the Association for Public Policy Analysis and Management.
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