Leaving Welfare: Challenges in a New Economy

Leaving Welfare: Employment and Well-Being of Families that Left Welfare in the Post-Entitlement Era, which was recently published by the Upjohn Institute. Visit www.upjohninstitute.org to read the first chapter or to order the book. During the mid 1990s, states aggressively pursued new and innovative welfare policies beginning under waivers to federal rules and continuing through federal welfare reform. The Temporary Assistance for Needy Families (TANF) block grant program replaced the “check writing ” culture of the old welfare system with program rules that emphasized the importance of work. These rules include strong work requirements for recipients of cash assistance and strict sanctions for noncompliance with these requirements, coupled with enhanced financial incentives to work. The late 1990s ’ policy Studies of welfare leavers indicate that working leavers are, for better or worse, entrenched in the low-wage labor market. focus on work happily coincided with a booming economy. The results are well-known: welfare caseloads dropped dramatically around the country, and the majority of families leaving welfare had at least one working adult and were, on average, better off than they had been on welfare. As we pass the eighth anniversary of federal welfare reform, states ’ policies have begun to stabilize, and low-income families are likely to have adapted to the new world of welfare. Further, the hot economy of the 1990s has given way to a more temperate job market. As federal policymakers continue to debate whether and how to change federal program rules when reauthorizing the TANF program— a discussion that continued for nearly three years without resolution—it is useful to reexamine what we know about the challenges facing families leaving welfare and the unfinished business of welfare reform.