August 22, 2000

Four years later, welfare reform only "moderately successful"
New study applauds caseload reduction but sees few gains in self-sufficiency

WASHINGTON-The welfare-reform law enacted four years ago today has been neither the stunning success claimed by its supporters nor the unmitigated disaster feared by its detractors, according to a new Cato Institute study.

In the most comprehensive analysis of welfare research since the passage of the 1996 law, the Cato study acknowledges that welfare rolls have dropped precipitously but argues that few gains have been made in helping welfare recipients achieve self-sufficiency. In fact, says study author Lisa Oliphant, at least two-thirds of former welfare recipients remain dependent on some form of government assistance, everything from Medicaid and housing subsidies to food stamps and daycare. "Clearly, welfare reform is failing to make people independent," she says.

Even so, Oliphant says, it is clear that welfare reform has improved the well-being of those formerly receiving cash assistance. Far from driving people further into financial hardship, the welfare law has reduced poverty among those who comply with the rules and claim the transitional benefits and tax benefits for which they qualify. Also important are the psychological benefits that come from leaving the dependency of welfare for the dignity of work, she says.

Still, welfare reform's chief flaw is that it fails to address the central cause of dependence in the first place. As Oliphant puts it, "The system continues to encourage dependence by providing generously for young women who give birth out of wedlock." Trying to ameliorate welfare dependency after it has occurred will never succeed in freeing families and future generations from reliance on the state, she argues.

"The ultimate solution lies in prevention," Oliphant says. "Welfare reformers need to turn their efforts toward encouraging young women to 1) finish school; 2) not get pregnant outside marriage; and 3) get a job, any job, and stick with it. The most effective way to communicate this message would be to remove welfare as an alternative for young women who fail to make smart choices."

" Four Years of Welfare Reform: A Progress Report "