Working Paper: NBER ID: w7627
Authors: Robert F. Schoeni; Rebecca M. Blank
Abstract: This paper evaluates the effectiveness of recent welfare reforms, investigating the effects of both state-specific waivers in the early 1990s and the 1996 federal reform legislation. Unlike earlier work, we analyze a wide array of indicators, including welfare participation, labor market involvement, earnings, income and poverty, and family formation. While no single methodology is entirely satisfying, the results in this paper are convincing in part because they are consistent across alternative approaches. We find strong evidence that these policy changes reduced public assistance participation and increased family earnings. The result was a rise in total family income and a decline in poverty. The gains from the 1996 reforms were not as broadly distributed across the distribution of less-skilled women as were the effects of waivers. Waivers also increased labor market involvement among the less-skilled, but the 1996 reforms had little additional impact on work behavior after controlling for economic forces. These policies also appeared to have an impact on family structure.
Keywords: welfare reform; public assistance; employment; income; poverty; family structure
JEL Codes: I3
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Welfare reforms (I38) | Reduction in public assistance participation (I38) |
| Welfare reforms (I38) | Increase in family earnings (J12) |
| Welfare reforms (I38) | Rise in total family income (D19) |
| Welfare reforms (I38) | Substantial decline in poverty (I32) |
| Waivers (I38) | Increase in income for less-skilled women (J79) |
| 1996 reforms (E69) | No income gains for the poorest women (F63) |
| Welfare reforms (I38) | Changes in family structure (J12) |