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Don’t Tamper with Welfare Success

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Fraser Forum The United States Congress has until September 30, 2002 to reauthorize the Temporary Assistance for Needy Families (TANF) welfare pro-gram. The Personal Responsibility and Work Opportunity Reconciliation Act (PRWORA) established TANF in place of Aid to Families with Depend-ent Children (AFDC). With an eye to influencing the debate about the reauthorization of TANF, various stake-holders are busy promulgating research in and around the US Capitol in an at-tempt to roll back the initial 1996 wel-fare reforms that were so successful in ending welfare as Americans knew it. With this call for retrenchment towards a less strict, Canadian model of social as-sistance, the future success of US wel-fare reform will be compromised.

For example, a recently-publicized study examines how welfare and employment policies have influenced recipients’ adolescent children. This study published by the US-based Man-power Demonstration Research Corpo-ration (MDRC) synthesized 8 studies from 16 programs in 9 states and 2 Canadian provinces (Gennetian et al., 2002.) It found that welfare policies that increase parental employment (i.e., mandatory employment services, earn-ings supplements, and time limits) could have detrimental effects on school achievement. Jodie Levin-Epstein of the Washington-based Center for Law and Social Policy, who recently testified before the Subcommittee on Human Resources for the US House Committee on Ways and Means on this very sub-ject, claims, “These findings [from the MDRC study] should give pause to policymakers who want to change the welfare law and make mothers leave home even more.”

However, if one reads beyond the news-paper headlines, the authors of the MDRC study claim, with good reason, that the findings of their work “are better seen as calling for more investiga-tion than for an immediate policy response.” After all, the authors make clear the weaknesses of their study. For example, of the 8 studies examined, all of them began prior to 1996 and the introduction of PRWORA and the establishment of TANF. Consequently, the study does not isolate the effects from the most recent welfare reforms. The studies also do not track teens for a sufficient period of time so as to provide conclusive answers about youths mak-ing the transition into young adulthood. Of the subset of studies that provide at least 5 years of follow-up, the MDRC study suggests that no negative effects on school completion were evident. Perhaps more importantly is the fact that the average effects on school outcomes were “small” and many of the programs studied did not produce statistically significant results.

Currently under TANF, single parent families have to be engaged in work- related activities (defined generally as activities that lead directly to employ- ment, rather than training and education) for 30 hours a week, with work comprising a minimum of 20 hours of the total. The Bush administration’s TANF reauthorization calls for 40 hours of work-related activities a week, with a minimum of 24 hours of work contributing to the total.

In reducing welfare dependency, strong measures—consisting of work requirements backed by sanctions and benefit time limits—have effectively convinced welfare recipients that they must leave welfare for work. The reauthorization of TANF, at the very least, should retain the current status quo considering that these reforms account for more than half of the decline in welfare participation since 1996 (O’Neill and Hill, 2002). The decline of 57 percent in welfare recipients from a high of 12.2 million in August 1996 to a low of 5.3 million in December 2001 represents the largest decline in caseload history of US public assistance programs. The decline in welfare and increases in employment and earnings have been greatest for the most disadvantaged— high school dropouts, single mothers, and ethnic minorities (O’Neill and Hill, 2002). At the same time, as the welfare dependency rate fell, the poverty rate for all individuals declined from 13.7 percent in 1996 to 11.3 percent in 2000 – the lowest rate since 1979.

During the TANF reauthorization debate, welfare reform opponents will be busy spinning this MDRC study as proof that work requirements for wel- fare recipients should be scaled back. However, retrenchment should be avoided at all costs. If anything, the suc- cess of welfare reform should prompt calls for further reforms along the lines of successes already achieved. Scaling back work requirements would bring US reforms eerily close to the current state of welfare reform north of the border in Canada.

In measuring Canadian provincial and US state welfare reductions post-1996 reform, the top performing Canadian province ranks a miserable 38th in terms of the percentage of citizens receiving welfare, and a slightly worse 39th in the percentage change in the population receiving welfare benefits as of June 2000 (see Clemens et al., 2001). More disturbing is the fact that the remaining 9 Canadian provinces occupy 9 of the bottom 10 positions for all jurisdictions in terms of the percentage of the population receiving welfare ben.efits. The divide between the states and provinces is stark. In reauthorizing TANF, any movement toward Cana.dian-style welfare reform should be avoided.
The debate over reauthorizing TANF is just beginning to heat up. Studies such as the MDRC study will continue to be used as ammunition by opponents of welfare reform to capture the attention of newspaper headline readers in an attempt to influence the debate. In call.ing for a scaling back of work requirements for welfare recipients—one of the most successful reforms adopted in 1996—welfare reform opponents are promoting a move towards a softer model of Canadian welfare reform. However, the goal should not be emulation of Canadian provincial welfare reform, which in comparison with the success of US state welfare reform ranks dismally. If anything, the goal should be to reform welfare further by emphasizing more work. At the very least, the recommendation of Wendell Primus, the former deputy assistant secretary in the US Department of Health and Human Services should be heeded. Despite having resigned in protest after the adoption of PRWORA, he suggests, “Whatever we have been doing during the past five years we ought to keep doing.”