Has the Well Run Dry? An Examination of the Effects of the TANF and Family Cap Reforms on Welfare Use

Abstract

The welfare system in the United States has seen great changes over the course of the last century, moving us away from “charity” and towards a system that considers cash assistance to be a temporary, support system as people get back to work and back on their feet. The most extreme of these changes occurred during the 1980s and 1990s, when programs that combined welfare and work were tested as “experiments” in the states and then became federal law in 1996. The cornerstone of the new “welfare to work” model is known as the Temporary Assistance for Needy Families (TANF) block grant and provides aid to the majority of welfare cases, contingent upon their participation in work activities. While the effects of TANF implementation on welfare caseloads have been extensively studied, a consensus still has not been reached regarding the extent of the effect. Studies span the gamut in how much they attribute the decrease in welfare caseloads to welfare reform, with most admitting that the number of potentially confounding variables in existence puts every model in danger of serious bias. It is with this precise dilemma in mind that I undertake my principle research project, hoping to build off of what has been done before and contribute new estimates measuring the effects of TANF on welfare use. Additionally, in part two of my research, I hope to be the first to contribute some empirical knowledge to our understanding of the effects of the Family Cap reforms on welfare use. After its implementation, TANF became an umbrella program to which other welfare reforms could be added, on a state-­‐by-­‐ state basis. The Family Cap reforms were among these and involved limitations on 5 benefits for families based on family structure concerns. The effects of this reform policy on welfare use have been very sparsely studied; with results that are inconclusive in the few places that they exist. I hope to modify a model that was used to measure the effects of time limit reforms on welfare use and apply it to the Family Cap reforms. If such a model could be tailored to work with the Family Cap reforms, it could provide estimates that would further our understanding of which specific policy reforms within the TANF bundle are effective.