Lessons for Welfare Reform

An Analysis of the AFDC Caseload and Past Welfare-to-Work Programs

(The first chapter of this book is available in PDF format.)  

Welfare reforms enacted in 1996 are here. A 60-month lifetime limit for welfare benefits is in place, as is a work requirement after two years on the rolls. Furthermore, states have assumed greater autonomy over welfare spending and have become responsible for new programs to replace the now-defunct Aid to Families with Dependent Children (AFDC) -- for six decades the nation's principal cash assistance welfare program -- and its accompanying education, work and training programs.

The result is a book that offers thoughtful new analyses on several crucial questions facing state policy makers as a result of welfare reform including: 1) How many recipients can be expected to reach the five-year limit imposed by the new legislation? 2) What are the personal characteristics and labor-market options of those who reach this limit? 3) How helpful are work/training programs in reducing welfare dependency? 4) How will current and potential recipients react to a reduction in the financial benefits available from welfare? and 5) Will teenage out-of-wedlock childbearing fall in unison with the incidence of welfare participation among young women?

O'Neill and O'Neill divided their research results into three broad areas:

1. The extent to which recipients respond to changes in the welfare benefit system.
   • The authors review basic information about benefit levels, eligibility and participation trends in the AFDC program, revealing the relationships between changes in these factors and the size and makeup of the caseload.
2. The patterns of welfare use and the work skills and other characteristics of short-term and long-term recipients.
   • Using CPS and NLSY data, O'Neill and O'Neill explore patterns of welfare use, and focus on the duration of welfare participation both in single episode and multiple spells. Here they also examine correlates of short-term and long-term participation. Using personal characteristics as their criteria, the authors identify the population groups most likely to encounter problems with the newly-imposed time limits on benefits. They also identify factors associated with work experience, earnings and incomes of those who exited welfare, and potential market earnings of those who remain on welfare.
3. The effectiveness of the many work and training programs for welfare participants implemented during the past 25 years.
   • A detailed look at the Job Opportunities and Basic Skills (JOBS) training program is offered, as well as analysis of a number of other programs and experiments intended to raise the earnings of women on AFDC and/or to reduce the size of the caseload. O'Neill and O'Neill also address questions concerning the capacity of state and local governments to implement time-limited welfare reform, particularly when tied to an aggressive work-oriented program providing for a significant increase in the number of welfare recipients in work-related activities.

"The wide-ranging information assembled by the authors from a variety of sources makes this book a solid contribution to the existing literature on welfare receipt and welfare policy reform. The authors cogently describe the history and current state of the welfare program, profile long- and short-term welfare recipients, and comment on the theoretical and empirical efficacy of one major reform component (work/training education). Supporting their arguments are not only numerous references to empirical studies, but also clear interpretations of tables of summary statistics and simple regression results.

"[This book] is an excellent starting point for researchers entering the field of welfare reform and for policy-makers involved in welfare program modification. The many tables and well-written, readable text provide a clear introduction to the extensive and often inconclusive literature on the AFDC program, and they also highlight areas to consider as reform progresses." ILR Review

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