Welfare Reform

TWENTY YEARS AGO, President Bill Clinton promised to “end welfare as we know it” by signing into law the Personal Responsibility and Work Opportunity Reconciliation Act, otherwise known as “welfare reform.”

Controversial at the time, the law placed a five-year time limit on government financial assistance to those in need and instituted work requirements for welfare recipients. With two decades of hindsight, there is now sufficient evidence to evaluate its effectiveness, the holes it created in our nation’s social safety net, and what needs to be done to address them.

One of the best examinations of this law’s effects is the insightful book $2.00 a Day: Living on Almost Nothing in America. Scholars Kathryn J. Edin and H. Luke Shaefer note that welfare reform has succeeded in important ways. “Poor single mothers,” they write, “left welfare and went to work in numbers that virtually no one expected. In 1993, 58 percent of low-income single mothers were employed. By 2000, nearly 75 percent were working, an unprecedented increase.” While the Great Recession reversed some of this progress, the employment rates remain “above pre-reform levels.” Child poverty rates also fell after welfare reform’s passage and remain down, though the authors note that additional measures, such as the expansion of the Earned Income Tax Credit and increased government spending on child-care programs, also factor into this decline.

But the outcomes are not universally positive. In the first 15 years after passing welfare reform, the number of people living in “$2-a-day poverty” had more than doubled.