Recent Data Trends Show Welfare Reform to Be a Mixed Success: Significant Policy Changes Should Accompany Reauthorization

The conventional wisdom is that the 1996 federal welfare reform law has been a stunning success. Welfare caseloads have declined significantly and employment among disadvantaged single mothers has increased more than anticipated. Also, more low‐income children were living with married couples in the late 1990s. However, welfare reform was enacted in the midst of exceptional economic, demographic, and other policy changes and it is impossible to disentangle the impact of federal welfare reform from these other factors. This article describes these factors and puts the income gains and losses among families with children between 1996 and 2000 into the historical context of the past twenty‐five years. This analysis provides substantial evidence that welfare reform may have “worked” for many low‐income families with children while failing other low‐income families. Furthermore, despite recent increases in poverty following the 2001 recession, welfare caseloads continued to decline, indicating a fundamental flaw in what has traditionally been a countercyclical program. Data also suggest that the significant increase over the 1990s in the share of low‐income children living with married couples has been reversed following the recent recession. These findings suggest that the 1996 welfare law needs to be considerably retooled.