[cover]

Economic Conditions
and Welfare Reform

Sheldon H. Danziger, editor
University of Michigan

 

"The nine papers in this volume ask the authors to 'use their analyses to predict what is likely to happen to welfare caseloads, to recipient well-being, and to state budgets and policies when the next recession arrives.' Given that the 'next recession' is now upon us, it is hard to imagine a more timely collection of essays."Southern Economic Journal

"Serious students of welfare change will want to read this excellent study." Choice Magazine

(The first chapter of this book is available in .pdf format.)

Welfare reform is widely touted as the reason welfare caseloads have declined rapidly the last few years. Apparently, say a group of researchers, reforms have contributed to this decline, but so has the booming economy. If this is true, what will happen to caseloads should the economy enter a recession, and what will states do to confront rising welfare costs?

The relationship between welfare caseloads and the economy is one of the key issues addressed in this timely book edited by Sheldon H. Danziger. Using the most current data available, a group of the nation's leading researchers examines the effects of welfare reform prior to and after enactment of the 1996 Personal Responsibility and Work Opportunity Reconciliation Act (PRWORA). What they find is a mixed picture.
Of note
  • Rural Dimensions of Welfare Reform: Welfare, Food Assistance, and Poverty in Rural America, Bruce A. Weber, Greg J. Duncan, Leslie A. Whitener, Editors
    • Says Danziger, "Taken together, the chapters in this volume suggest that, in its first few years, the 1996 welfare reform has been more successful in some dimensions (notably, reducing caseloads) than in others (raising disposable income). Much of the success to date is due to a booming economy and to a fiscal environment in which states have more funds to spend per recipient than they had in the past. Nonetheless, even under these optimal economic and fiscal conditions, some recipients have already 'slipped through the cracks.'" He also warns that, given the current rules governing welfare, the success in reducing welfare caseloads seen to date may disappear during the next recession.

    The book is divided into three sections. The first, comprising four papers, offers analyses of trends in welfare caseloads and whether these trends are the result of welfare reform or the macroeconomy.

    Related titles
  • Leaving Welfare, Gregory Acs and Pamela Loprest
  • Welfare and Work, Christopher T. King and Peter R. Mueser
  • Helping Working Families: The EITC, Saul D. Hoffman and Laurence S. Seidman
  • Lessons for Welfare Reform, Dave M. O'Neill and June Ellenoff O'Neill
  • Poverty and Inequality: The Political Economy of Redistribution, Jon Neill, Editor
  • Of Heart and Mind: Social Policy Essays in Honor of Sar A. Levitan, Garth Mangum and Stephen Mangum, Editors
  • The Earned Income Tax Credit, Saul D. Hoffman and Laurence S. Seidman
  • Public Service Employment: The Experience of a Decade, Robert F. Cook, Charles F. Adams, and V. Lane Rawlins
    Also visit our Welfare-to-Work Research Hub.
    • Welfare Reform, the Business Cycle, and the Decline in AFDC Caseloads by David N. Figlio and James P. Ziliak.
    • What Goes Up Must Come Down? by Geoffrey Wallace and Rebecca M. Blank.
    • The Effect of Pre-PRWORA Waivers on AFDC Caseloads and Female Earnings, Income, and Labor Force Behavior by Robert A. Moffitt.
    • Examining the Effects of Industry Trends and Structure on Welfare Caseloads by Timothy J. Bartik and Randall W. Eberts.
    The second section focuses on the labor market, specifically recipients' work and earnings outcomes, and employers' willingness to hire welfare recipients.
    • Work, Earnings, and Well-Being after Welfare by Maria Cancian, Robert Haveman, Thomas Kaplan, Daniel Meyer, and Barbara Wolfe.
    • Employer Demand for Welfare Recipients and the Business Cycle by Harry J. Holzer.
    The three papers in the final section focus on what states are doing now and what they are likely to do in the event of a recession. As Danziger points out, "This is uncharted territory." As a result of the 1996 welfare reform, states now receive a fixed block grant from the federal government that is based on a caseload that was significantly higher than it is now. While this represents a financial windfall for states at current caseload levels, the federal government will not share in any increased welfare costs caused by a recession as it did in the past. What the states might do is discussed in the following.
    • What Will the States Do When Jobs Are Not Plentiful? by LaDonna A. Pavetti.
    • Cyclical Welfare Costs in the Post-Reform Era by Philip B. Levine.
    • The States, Welfare Reform, and the Business Cycle by Howard Chernick and Therese J. McGuire.
    As Danziger notes, policymakers and program administrators considering future versions of welfare reform should use the analyses offered in this volume as a "road map" for reforming welfare reform. State policymakers would also be well-served if they began to make contingency plans in response to the authors' projections.
    345 pp. 1999
    $48 cloth ISBN 0-88099-200-X / ISBN-13 978-0-88099-200-8
    $22 paper ISBN 0-88099-199-2 / ISBN-13 978-0-88099-199-5.

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