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Twenty years later: Lessons from welfare reform

Twenty years have passed since Aid to Families with Dependent Children (AFDC) disappeared, replaced by Temporary Assistance for Needy Families (TANF). Notwithstanding all the acronyms, this was a far more important advance than simply shifting around some letters. But what happened since then? Some answers are emerging.

First a little background: The reform, established by the Personal Responsibility and Work Opportunity Reconciliation Act, shifted funding to a block grant.  States were given the ability to choose and discard different services. Cash benefits diminished and the focus on “welfare to work” greatly expanded. Time limits were put on receiving assistance and variations in the way states ran their programs expanded. 

This month, the Institute for Research on Poverty at the University of Wisconsin released an excellent short issue brief focused on the impact of reform. It’s based on a meeting of policy-makers, practitioners and researchers that was hosted by the Brookings Institution Center on Children and Families and the University of Kentucky Center for Poverty Research

The brief starts out with the good news, including major improvements to child health outcomes since the mid-1990s. Mortality rates, particularly for young black males, have dropped. Teen pregnancies declined as did eighth grade tobacco and alcohol use.

According to the brief, “Even in a time of growing income inequality, the well-being of the young has significantly improved, especially among blacks and the poorest Americans.”

But the job of figuring out results of reform are hideously complex given swings in the economy and the number of other programs that expanded, or contracted during the last twenty years. It’s likely that many improvements stem more from increased access to health care for children through Medicaid and the State Children’s Health Insurance Program (SCHIP). Similarly, the brief cites the Earned Income Tax Credit as likely having a greater impact on work participation than did TANF.

Other observations from the brief:

  • TANF had success in increasing job participation for less educated women, though only by 2 to 4 percentage points.

  • While TANF and associated work programs have lifted incomes for mothers with skills, it left behind unskilled workers. This has created a situation in which a number of families with significant employment barriers are cut off from safety net programs and live in deep poverty. According to the brief, “The personal responsibility emphasis of welfare reform was not balanced by a public responsibility to create jobs.”

  • Non-marital births rose as a percent of the total – from 32 percent right before reform to 41 percent in 2013. “Promoting marriage and reducing non-marital births was welfare reform’s least realized goal,” the brief says.

  • Inflation has eaten into the size of the $16.5 billion block grant, making its value about one third less than in 1996.

  • Cash assistance has dwindled enormously from 70 percent of TANF dollars in 1997 to 23 percent in 2014.

The brief provides informative end notes, with a multitude of other sources for readers.


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