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Manhattan Institute

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Gaining Ground? Measuring the Impact of Welfare Reform on Welfare and Work

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Gaining Ground? Measuring the Impact of Welfare Reform on Welfare and Work

By June E. O'Neill, M. Anne Hill July 2, 2001
Urban PolicyWelfare

The report's main findings are as follows:

  • The number of families on welfare declined by 50 percent between the passage of welfare reform legislation in August, 1996 and the date for the most recent caseload statistics, September, 2000.
  • Most of the women heading these families have gone to work, contrary to the expectations of many welfare reform critics. The proportion of single mothers who work has increased dramatically since welfare reform, nearly matching the proportion leaving welfare.
  • Regression results indicate that Temporary Assistance to Needy Families (TANF), the federal program created in 1996 pursuant to the welfare reform law, accounts for more than half of the decline in welfare participation and more than 60 percent of the rise in employment among single mothers.
  • These results also show that although the booming economy of the late 1990s contributed both to the decline in welfare and to the rise in work participation among single mothers, that contribution was relatively minor compared to the contribution of TANF, accounting for less than 20 percent of either change.
  • The decline in welfare participation was largest for groups of single mothers commonly thought to be the most disadvantaged: young (18-29) mothers, mothers with children under seven years of age, high school dropouts, black and Hispanic single mothers, and those who have never been married.
  • Employment gains have also been the largest among disadvantaged single mothers: mothers who have never married, mothers between the ages of 18 and 29, mothers with children under seven years of age, high school dropouts, and black and Hispanic mothers.
  • TANF's beneficial effects extend even to the most disadvantaged portions of the welfare-eligible population. TANF accounts for 40 percent of the increase in work participation among single mothers who are high school dropouts; 71 percent of the increase in work participation among 18-29 year old single mothers; and 83 percent of the increase in work participation among black single mothers.

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