Outcomes and outputs: Long-term effects of Temporary Assistance for Needy Families on caseload enrollment and poverty

Date01 July 2018
Published date01 July 2018
Public Policy and Administration
2018, Vol. 33(3) 290–310
!The Author(s) 2017
Reprints and permissions:
DOI: 10.1177/0952076716687353
Outcomes and outputs:
Long-term effects of
Temporary Assistance
for Needy Families on
caseload enrollment
and poverty
Jaclyn Bunch and Scott Liebertz
University of South Alabama, Mobile, AL, USA
Kerri Milita
Illinois State University, Normal, IL, USA
The Welfare Reform Legislation of 1996 is often cited as one of President Clinton’s
most notable achievements, as this law was followed by sizable reductions in states’
welfare loads. Did this policy devolution lead to lower state poverty—as was suggested
by reform advocates? We re-examine the effects of the new welfare regime on state-
level poverty and welfare enrollment between 1996 and 2012. This is important to
complement existing studies of individual-level experience with the welfare system. Our
analysis confirms that the federal-to-state welfare transition eased the states’ caseload
burden and poverty rate. We also find evidence that the relationship between welfare
restrictiveness and caseload burden was strongest in the period before the recession,
and with the inclusion of post-recession years, higher level restrictiveness may have little
to no effect on reducing caseload. While state decisions to increase welfare restrict-
iveness did reduce poverty, our results show no added benefit to those with the highest
levels of welfare restrictions. These findings reinforce the need to match policy goals to
social outcomes, rather than relying on output measures such as caseload reduction.
Devolution, intergovernmental relations, service delivery, state poverty, Temporary
Assistance for Needy Families (TANF), welfare reform
Corresponding author:
Jaclyn Bunch, University of South Alabama, 5991 USA Dr N, HUMB 222, Mobile, AL 36688, USA.
Email: Jbunch@southalabama.edu
When President Bill Clinton fulf‌illed his promise to ‘‘end welfare as we know it,’’
many critics feared the legislation would be a disaster for the poor (Blank, 1997). The
new law, Personal Responsibility and Work Opportunity Reconciliation Act, ended
the old system of direct cash assistance to the poor, Aid to Families with Dependent
Children (AFDC), and replaced it with Temporary Assistance for Needy Families
(TANF). No longer could welfare recipients benef‌it from aid in perpetuity. The
federal government placed a f‌ive-year lifetime restriction on public assistance, in
addition to a two-year limit before the benef‌iciary must obtain employment.
Furthermore, the new legislation devolved substantial design and implementation
authority to the states. Thus, many states chose to place even stricter time limits on
assistance. Policy centers warned that the uptick in restrictive welfare legislation
might condemn up to a million new children to poverty (Zedlewski et al., 1996).
Many perceived the new legislation as another step in the campaign to blame the
impoverished for their poverty, particularly single, low-income mothers (Handler
and Hasenfeld, 2007; Lichter and Crowley, 2002; Soss and Schram, 2007).
The greatest fears of the critics did not occur in the years immediately following
implementation. The number of people on welfare rolls was in decline in the three
years prior to the legislation and continued to fall at an even greater pace following
the transition to TANF. Between 1993 and 1997 state caseloads declined on aver-
age by 30% across the country (Schram et al., 1998). By 2000, caseload reductions
had reached nearly 50% of their pre-TANF levels (Bell, 2001). Nor did the new
welfare system seem to cause great increases in poverty, as opponents of TANF
had predicted. The poverty rate for female-led households with children reached an
all-time low of 32.5% in 2000 (Lichter and Crowley, 2002). Despite these f‌indings,
it is unclear whether the declines in poverty and caseloads can be attributed to
TANF and state-level decisions or to propitious timing. TANF went into ef‌fect
prior to an unprecedented economic boom in the US, and many states’ caseloads
were already on a downward trajectory prior to the state takeover of welfare. Thus,
it is dif‌f‌icult to determine whether the TANF transition was a true cause of declin-
ing poverty in the states. Researchers are now in a position to investigate the long-
term ef‌fects of TANF, revealing important implications for public policy.
We examine how state-level variations in welfare restrictiveness shape a state’s
welfare caseload and poverty rate. To reform proponents, TANF’s potential to
reduce welfare caseloads is a victory for limited national government and local
control, as individual states are free to implement program reform with varying
degrees of restrictiveness (Blank, 2002). Opponents doubt the conventional wisdom
of welfare reform’s success and fear that decentralization of welfare begets a ‘‘race
to the bottom’’ in which states compete to of‌fer minimal benef‌its (Brueckner, 2000;
Peterson and Rom, 1990).
The primary goal of this study is to determine whether welfare reform impacted
state povertyrates. We also extend the time periodand scope of previous works, which
have primarily focused on the impact of welfare reform on outputs (e.g., caseload
burden) rather than outcomes (e.g., poverty rate) with some notable exceptions
(Rodgers et al., 2006). In order to truly understandthe i nf‌luence of state-level decisions
Bunch et al. 291

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