Family economic well-being following the 1996 welfare reform: Trend data from five non-experimental panel studies

Abstract

This analysis summarizes trends in family economic well-being from five non-experimental, longitudinal welfare-to-work studies launched following the passage of the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (PRWORA). The studies include a sizable group of parents and other caregivers who received TANF at the point of sampleCorresponding author: Kristen Shook Slack, Assistant Professor, School of Social Work, University of Wisconsin-Madison, 1350 University Avenue, Madison, WI 53706, ksslack@wisc.edu, Phone: 608-263-3671. Publisher's Disclaimer: This is a PDF file of an unedited manuscript that has been accepted for publication. As a service to our customers we are providing this early version of the manuscript. The manuscript will undergo copyediting, typesetting, and review of the resulting proof before it is published in its final citable form. Please note that during the production process errors may be discovered which could affect the content, and all legal disclaimers that apply to the journal pertain. NIH Public Access Author ManuscriptChild Youth Serv Rev. Author manuscript; available in PMC 2014 December 09. Published in final edited form as:Child Youth Serv Rev. 2007 June ; 29(6): 698-720. doi:10.1016/j.childyouth.2006. NIH-PA Author ManuscriptNIH-PA Author Manuscript NIH-PA Author Manuscript selection or shortly thereafter, and share a wide range of similar measures of economic well-being. This analysis provides descriptive information on how these families are faring over time.Our results confirm what has been found by previous studies. Many families remain dependent on public benefits, and are either poor or near-poor, despite gains in some indicators of economic well-being. We caution that these aggregate statistics may mask important heterogeneity among families.U.S. welfare policy has a long history of expansion and retrenchment. One of the most significant developments since its inception in 1935, with the passage of the Social Security Act and creation of Aid to Dependent Children, manifested in the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (PRWORA). This federal law eliminated welfare as an entitlement benefit, and solidified a shift in welfare policy back to the states. In the wake of "welfare reform," as PRWORA is often labeled, welfare caseloads dropped precipitously. However, as noted by many policy scholars, caseload reduction should not be heralded as the sole indicator of PRWORA's success (Blank, 2002; Duncan & ChaseLansdale, 2001; Zedlewski, 2002). Rather, it is important to understand whether this caseload decline has been accompanied by economic gains or losses, as well as changes in other indicators of family well-being.This analysis summarizes trends in family economic well-being from several nonexperimental, longitudinal welfare-to-work studies 1 launched following the passage of PRWORA. Our set of indicators is limited primarily to those relating to economic wellbeing and hardship. We have done this deliberately ...

Poverty and the American Family: A Decade in Review

“…In 1996, 4.5 million families enrolled in TANF; by 2002, 2.1 million families claimed benefits and less than 1.7 million did so by the end of 2008, a year which captured the beginning of the recession (Administration for Children and Families, n.d.). Much of the change was because single mothers began working at unprecedented levels after welfare reform, and family incomes increased (Acs & Loprest; Corcoran et al; Seefeldt, 2008; Slack et al, 2007). Of important note, the 1993 expansion of the Earned Income Tax Credit (EITC), a substantial refundable tax credit for low‐income working families that now represents America's largest means‐tested anti‐poverty program, greatly contributed to the changes in caseloads and labor force participation as well (Eissa & Hoynes, 2005; Grogger; Noonan, Smith, & Corcoran, 2007).…”

“…Substantial numbers of current and former welfare recipients continued to struggle with multiple obstacles to employment after welfare reform (Acs & Loprest, 2007; Corcoran et al, 2000; Seefeldt, 2008; Slack et al, 2007). As an indication of this fact, a sizable portion of welfare leavers (about one fifth) at any given time had no identifiable means of support (i.e., they did not work, receive welfare, or live with a working partner), and this group was growing even prior to the recession (Acs & Loprest; Loprest & Zedlewski, 2006; Turner, Danziger, & Seefeldt, 2006).…”

“…Though recent scholarship showed that a sizable minority of those in low‐wage work eventually transitioned to somewhat higher‐paying jobs (F. Anderson, Holzer, & Lane, 2006; Newman, 2006), for most ex‐recipients, work did not, by itself, result in economic self‐sufficiency, and setbacks were common (Cancian et al, 2002; Slack et al, 2007; Wood et al, 2008). One problem is that the majority of former recipients only commanded entry‐level jobs in the service and retail sector (Corcoran et al, 2000; Lein et al, 2005; Loprest & Zedlewski, 2006).…”

“…Another indication that those who went to work in the aftermath of welfare reform were not doing as well as policymakers hoped is that they, just as they did under AFDC (Edin & Lein, 1997), continued to work informally, sell personal belongings for needed cash, and garner in‐kind and cash assistance from friends, family, and charities (Clampet‐Lundquist et al, 2004; Fletcher, Winter, & Shih, 2008). Some research suggested that those who left welfare for work engaged in fewer of these activities than they did while on welfare, but their ongoing reliance on government benefits (e.g., child‐care subsidies, Medicare, and the EITC) belies the idea that they became economically self‐sufficient (Danziger et al, 2002; Slack et al, 2007). There are also now indications that hardships associated with the economic crisis may be prompting increased use of food banks (Feeding America, 2009) and shelters (Markee, 2009).…”

“…Critically, though, the decade's scholarship did document that even before the recent recession, former recipients suffered from material hardships at significant rates, though estimates of the level of hardship experienced varied substantially across studies (Acs & Loprest, 2001; Clampet‐Lundquist et al, 2004; Slack et al, 2007). In fact, those who left welfare for work, and the working poor in general, were either no better off or only slightly better off than those who stayed on the rolls or combined welfare and employment (Danziger et al, 2002; Heflin, Corcoran, & Siefert, 2007; Loprest & Zedlewski, 2006; Meyers & Lee, 2003).…”