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

Author

Listed:
  • 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.

Suggested Citation

  • Marianne Bitler & Hilary W. Hoynes, 2010. "The state of the safety net in the post-welfare reform era," Working Paper Series 2010-31, Federal Reserve Bank of San Francisco.
  • Handle: RePEc:fip:fedfwp:2010-31
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    References listed on IDEAS

    as
    1. Bruce D. Meyer & Dan T. Rosenbaum, 2001. "Welfare, the Earned Income Tax Credit, and the Labor Supply of Single Mothers," The Quarterly Journal of Economics, Oxford University Press, vol. 116(3), pages 1063-1114.
    2. 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 bc4fe28e4d704a8a84e7adf0b, Mathematica Policy Research.
    3. Rebecca M. Blank, 2001. "What Causes Public Assistance Caseloads to Grow?," Journal of Human Resources, University of Wisconsin Press, vol. 36(1), pages 85-118.
    4. repec:mpr:mprres:1206 is not listed on IDEAS
    5. Rebecca M. Blank, 2002. "Evaluating Welfare Reform in the United States," Journal of Economic Literature, American Economic Association, vol. 40(4), pages 1105-1166, December.
    6. Jeffrey Grogger & Charles Michalopoulos, 2003. "Welfare Dynamics under Time Limits," Journal of Political Economy, University of Chicago Press, vol. 111(3), pages 530-554, June.
    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. 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.
    9. repec:mpr:mprres:1253 is not listed on IDEAS
    10. 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).
    11. 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 2221-2241, December.
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    Citations

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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.
    2. East, Chloe N. & Kuka, Elira, 2015. "Reexamining the consumption smoothing benefits of Unemployment Insurance," Journal of Public Economics, Elsevier, vol. 132(C), pages 32-50.
    3. Marianne Bitler & Hilary Hoynes, 2016. "The More Things Change, the More They Stay the Same? The Safety Net and Poverty in the Great Recession," Journal of Labor Economics, University of Chicago Press, vol. 34(S1), pages 403-444.
    4. Slack, Kristen S. & Kim, Bomi & Yang, Mi-Youn & Berger, Lawrence M., 2014. "The economic safety net for low-income families with children," Children and Youth Services Review, Elsevier, vol. 46(C), pages 213-219.
    5. Armando Barrientos, 2016. "Inequality, Poverty, and Antipoverty Transfers," Working Papers id:11190, eSocialSciences.
    6. Hilary Hoynes & Douglas L. Miller & Jessamyn Schaller, 2012. "Who Suffers during Recessions?," Journal of Economic Perspectives, American Economic Association, vol. 26(3), pages 27-48, Summer.
    7. Lucie Schmidt, 2013. "The New Safety Net? Supplemental Security Income after Welfare Reform," Department of Economics Working Papers 2013-07, Department of Economics, Williams College.
    8. Martha Starr, 2014. "Gender, added-worker effects, and the 2007–2009 recession: Looking within the household," Review of Economics of the Household, Springer, vol. 12(2), pages 209-235, June.
    9. Jackson, Margot I. & Mayne, Patrick, 2016. "Child access to the nutritional safety net during and after the Great Recession: The case of WIC," Social Science & Medicine, Elsevier, vol. 170(C), pages 197-207.
    10. Hilary Hoynes & Diane Whitmore Schanzenbach & Douglas Almond, 2016. "Long-Run Impacts of Childhood Access to the Safety Net," American Economic Review, American Economic Association, vol. 106(4), pages 903-934, April.

    More about this item

    Keywords

    Public welfare ; Welfare;

    JEL classification:

    • I3 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty
    • I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs

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