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The state of the safety net in the post-welfare reform era

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  • Marianne Bitler
  • Hilary W. Hoynes

Abstract

The passage of the 1996 welfare reform bill led to sweeping changes to the central U.S. cash safety net program for families with children. Importantly, along with other changes, the reform imposed lifetime time limits for receipt of welfare de facto ending the entitlement nature of cash welfare for poor families with children in the United States. Despite dire predictions about poverty and deprivation, the previous research shows that caseloads declined and employment increased, with no detectible increase in poverty or worsening of child-well-being. We re-evaluate these results in light of the severe recession which began in December 2007. In particular, we examine how the cyclicality of the response of program caseloads and family wellbeing has been altered by the implementation of welfare reform. We find that use of food stamps and non-cash safety net program participation have become significantly more responsive across economic cycles after welfare reform, going up more after reform when unemployment increases. By contrast, there is no evidence that cash welfare for families with children is more responsive after reform, and some evidence that it might be less so. There is some evidence that poverty increases more with the unemployment rate after reform (and no evidence that poverty increases less with unemployment after reform). We find that reform has led to no significant effects on the cyclical responsiveness of food consumption, food insecurity, health insurance, household crowding, or health.

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Bibliographic Info

Paper provided by Federal Reserve Bank of San Francisco in its series Working Paper Series with number 2010-31.

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Date of creation: 2010
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Handle: RePEc:fip:fedfwp:2010-31

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Keywords: Public welfare ; Welfare;

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  1. Jim C. Ohls & Thomas M. Fraker & Alberto P. Martini & Michael Ponza, 1992. "The Effects of Cash-Out on Food Use by Food Stamp Program Participants in San Diego," Mathematica Policy Research Reports 1253, Mathematica Policy Research.
  2. Bruce D. Meyer & James X. Sullivan, 2008. "Changes in the Consumption, Income, and Well-Being of Single Mother Headed Families," American Economic Review, American Economic Association, vol. 98(5), pages 2221-41, December.
  3. Bruce D. Meyer & Wallace K. C. Mok & James X. Sullivan, 2009. "The Under-Reporting of Transfers in Household Surveys: Its Nature and Consequences," Working Papers 0903, Harris School of Public Policy Studies, University of Chicago.
  4. Marianne P. Bitler & Jonah B. Gelbach & Hilary W. Hoynes, 2006. "Welfare Reform and Children's Living Arrangements," Journal of Human Resources, University of Wisconsin Press, vol. 41(1).
  5. Bruce D. Meyer & Dan T. Rosenbaum, 1998. "Welfare, the Earned Income Tax Credit, and the Labor Supply of Single Mothers," JCPR Working Papers 32, Northwestern University/University of Chicago Joint Center for Poverty Research.
  6. Thomas M. Fraker & Alberto P. Martini & James C. Ohls & Michael Ponza & Elizabeth A. Quinn, 1992. "The Evaluation of the Alabama Food Stamp Cash-out Demonstration. Vol. 1: Recipient Impacts," Mathematica Policy Research Reports 1206, Mathematica Policy Research.
  7. James P. Ziliak & David N. Figlio & Elizabeth E. Davis & Laura S. Connolly, 2000. "Accounting for the Decline in AFDC Caseloads: Welfare Reform or the Economy?," Journal of Human Resources, University of Wisconsin Press, vol. 35(3), pages 570-586.
  8. Jeff Grogger & Charles Michalopoulos, 2000. "Welfare Dynamics under Time Limits," JCPR Working Papers 125, Northwestern University/University of Chicago Joint Center for Poverty Research.
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Cited by:
  1. Tiehen, Laura & Jolliffe, Dean & Gundersen, Craig, 2012. "How State Policies Influence the Efficacy of the Supplemental Nutrition Assistance Program in Reducing Poverty," 2012 Annual Meeting, August 12-14, 2012, Seattle, Washington 124937, Agricultural and Applied Economics Association.

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