Policy Analysis No. 378

Four Years of Welfare Reform: A Progress Report

By Lisa E. Oliphant
August 22, 2000

Executive Summary

Fours year ago, President Clinton signed into law the Personal Responsibility and Work Opportunity Reconciliation Act, promising to put an end to dependence on welfare by requiring work and responsibility and encouraging two-parent families. The conversion of the old entitlements-based Aid to Families with Dependent Children program into the new work-oriented Temporary Assistance for Needy Families program has brought about some of the most talked-about public policy phenomena of the last decade, including dramatically reduced caseloads and an influx of single mothers into the labor market. Welfare reform is generally regarded as a great success, and policymakers today are talking about incremental add-ons to the 1996 legislation.

A closer review of the research, however, reveals that the celebration of welfare reform has been premature and that the new law, in fact, merits fundamental restructuring. A survey of welfare reform’s progress to date suggests that the 1996 legislation, although moderately successful in reducing the disincentive to leave welfare, has produced few gains in self-sufficiency and done little to discourage women from making the choices that cause them to enter the welfare rolls in the first place:

  • Welfare reform has been largely unsuccessful in moving long-term unemployed, difficult-to-place individuals off cash assistance.
  • Welfare reform is failing to make individuals self-sufficient.
  • Welfare reform has failed to significantly curb out-of-wedlock births to young women.

Overall, the new welfare law is a second-best solution to welfare dependence. Until policymakers take a preventive approach and make welfare no longer available to, or an attractive option for, women considering making untenable life choices, the country will continue to spend endless taxpayer dollars trying to clean up its dependence problem.

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Lisa E. Oliphant is an entitlements policy analyst at the Cato Institute.