Jeffrey Grogger
Lynn A. Karoly
Copyright Date: 2005
Published by: Harvard University Press
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  • Book Info
    Book Description:

    In Welfare Reform, Jeffrey Grogger and Lynn Karoly assemble evidence from numerous studies to assess how welfare reform has affected behavior. To broaden our understanding of this wide-ranging policy reform, the authors evaluate the evidence in relation to an economic model of behavior.

    eISBN: 978-0-674-03796-0
    Subjects: Political Science, Finance

Table of Contents

  1. Front Matter
    (pp. i-vi)
  2. Table of Contents
    (pp. vii-x)
  3. List of Figures
    (pp. xi-xiv)
  4. List of Tables
    (pp. xv-xvi)
  5. Preface
    (pp. xvii-xviii)
  6. List of Acronyms
    (pp. xix-xx)
  7. CHAPTER ONE Introduction
    (pp. 1-9)

    In 1935 the United States implemented its first federal welfare program. Soon to become known as Aid to Families with Dependent Children, or AFDC, its goal was to alleviate need among single-parent families by raising their living standards without requiring single mothers to enter the labor market. That goal reflected contemporary social realities: few women worked outside the home, opportunities to do so were limited, and women who had lost their husbands—predominantly widows—were hard-pressed to support their children as a result.

    Over time, those realities changed. One important change was the movement of women into the workforce. Between...

  8. CHAPTER TWO Background
    (pp. 10-41)

    The changes in welfare policy that were implemented during the 1990s represent both an extension of and a departure from past policy. To set the stage for the theoretical and empirical analysis to follow, we begin this chapter with a brief history of federal welfare policy and previous reform efforts.¹ The discussion focuses on some of the motivations for reform and some of the shifts in emphasis among the goals of reform. We then describe the reforms undertaken during the 1990s. After that, we discuss changes in welfare-related behavior that took place during the 1990s, some of which may be...

  9. CHAPTER THREE An Economic Model
    (pp. 42-56)

    With some background in hand, we turn to the first step of our analysis. We present the conventional economic model of welfare incentives under AFDC and extend it as necessary to predict the effects of three major categories of reforms: financial work incentives, requirements for work or related activities (and sanctions for noncompliance), and time limits. Of all the policy reforms implemented under PRWORA, these three are among the most important, and are likely to have consequences for welfare use, labor market behavior, and income. Indeed, the model suggests that these reforms may entail trade-offs among the traditional policy goals...

  10. CHAPTER FOUR Methodological Issues
    (pp. 57-104)

    The model from the last chapter makes ceteris paribus predictions about the effects of welfare reform. Put differently, it makes predictions about the causal effects of different reforms. Thus comparing the theory to the data requires estimates of the causal effects of reform.

    In this chapter we focus on the two principal methodologies used in the literature to isolate the effects of welfare reform policies: random assignment experiments and observational studies. We identify the strengths and weaknesses associated with each approach. We also highlight a number of other methodological issues that are relevant for research in this area. One conclusion...

  11. CHAPTER FIVE Welfare Use and Welfare Payments
    (pp. 105-133)

    In this chapter we focus our attention on how welfare reform has affected welfare use and welfare payments. These are two key outcomes about which the model discussed in Chapter 3 makes predictions. Welfare use is also related to welfare dependency, which has long been one of the key topics in debates over social welfare policy. In addition, welfare payments are an important component of poor families’ incomes, another issue that is central to many discussions of welfare reform.

    This chapter has four goals. We first determine whether the estimated effects of specific welfare reform policies on welfare use and...

  12. CHAPTER SIX Employment, Labor Supply, and Earnings
    (pp. 134-154)

    Promoting work among welfare recipients has been a key objective of policy reform efforts since at least the early 1960s. The recent era has been no exception. Many waiver-based reforms focus primarily on requiring recipients to work or receive training, and one of PRWORA’s primary goals is to promote work. Moreover, employment and labor supply are two of the central outcomes about which our economic model makes predictions. These two factors also play a key role in alleviating need.

    Almost all of the major reforms discussed in Chapter 2—work requirements, time limits, and financial work incentives—should increase employment....

  13. CHAPTER SEVEN Income and Poverty
    (pp. 155-172)

    Raising living standards has been another key objective of welfare policy, and many reform efforts have been designed with this goal in mind. One way to capture the effect of reform on living standards is to examine its effect on income, a measure widely used to gauge a family’s command over resources. Poverty is another metric commonly defined on the basis of whether a family’s income exceeds a specified needs standard. For some observers, these outcomes are among the most important to consider when evaluating the consequences of welfare reform.

    For the most part, the model in Chapter 3 makes...

  14. CHAPTER EIGHT Family Structure
    (pp. 173-198)
    Jacob Alex Klerman

    As noted in Chapter 1, in addition to promoting work and reducing dependency, PRWORA’s goals specifically included family structure considerations: to see that children are cared for in their own homes, to promote marriage, to encourage the formation and maintenance of two-parent families, and to reduce the incidence of out-of-wedlock childbearing. A number of reforms implemented by the states were designed to directly affect marriage and childbearing. For example, states aimed to diminish any disincentive toward marriage associated with welfare eligibility rules by eliminating differences in eligibility for two-parent versus one-parent families (for example, the “100-hour rule” and work history...

  15. CHAPTER NINE Child Outcomes
    (pp. 199-227)

    The model introduced in Chapter 3 focuses on the relationship between welfare policies and decisions regarding welfare use, work effort, and income. The previous chapter extends that model to consider the impact of reform on marriage and childbearing. In this chapter, we further extend the model to examine the impact of reform policies on children and consider the evidence from experimental and observational studies.¹

    Throughout the process of reform, there has been considerable attention paid to the potential for both negative and positive impacts of various welfare policies on the well-being of children. There are a number of reasons to...

  16. CHAPTER TEN Theory, Evidence, and Policy Trade-offs
    (pp. 228-252)

    We have presented a substantial amount of detail concerning the effects of various welfare reform policies on several measures of welfare-related behavior. In this concluding chapter, we pull these parts together into a more coherent whole, providing an accessible summary of the evidence on the effects of welfare reform. Where possible, we assess whether the results are consistent with the predictions from the model discussed in Chapter 3. We discuss which policy reforms achieve which policy objectives and point out where important trade-offs arise.

    Our summary is organized around a more elaborate version of the matrix presented in Table 3.1....

  17. APPENDIX A. Sources for Experimental Study Results
    (pp. 254-277)
  18. APPENDIX B. Methodology for Summary Figures in Chapter 10
    (pp. 278-282)
  19. Notes
    (pp. 283-298)
  20. References
    (pp. 299-316)
  21. Index
    (pp. 317-331)