What's Behind Rise and Drop In Welfare Rolls

Call it the conundrum of the cash handout.

As politicians try to one-up each other on welfare reform, a fundamental question lurks beneath the surface: Why are welfare caseloads dropping so dramatically and who - if anyone - should get credit?

Democrats and Republicans have been dueling lately to claim credit for a drop in public-assistance rolls that has occurred in 42 states - in some cases by almost one-third. But social scientists say a variety of forces have led to the decline, only some of which involve government reforms.

Moreover, they note the latest drop was preceded by a far bigger - and more mysterious - rise in welfare caseloads, which helps put the current political chest-pounding in perspective.

Both trends are of more than academic interest. Welfare is a hot political issue, not only in the presidential race, but also in state politics. Governors are racing to put pilot programs in place. Some results are in for the earliest experiments, but before broad conclusions can be drawn, a deeper understanding of the long-term trends is needed, experts say.

Both parties take credit, but drop in recipients is also linked to improved economy and changed culture.

On May 22 in Wisconsin, a state at the forefront of welfare innovation, GOP candidate Bob Dole was to lay out his own proposals for change. President Clinton will be in Wisconsin May 23 to give his welfare speech. He stole some of Mr. Dole's thunder Saturday by endorsing Wisconsin's reform plan.

Broadly speaking, social scientists agree several factors have played a role in the 9 percent decline of the welfare caseload over three years: the improved economy, states' reform initiatives, and changed attitudes among recipients.

Some of the most aggressive innovators have seen the biggest declines. Wisconsin is down by 24 percent, Massachusetts by 29 percent, and Indiana by 30 percent. At the same time, California's rolls are up 10 percent over three years ago, but have begun to decline - a reflection, analysts say, of the state's delayed economic recovery.

Four years of talk by politicians about "changing welfare as we know it" has not produced sweeping national reform, but it has brought innovation at the state level - and a new outlook among some recipients.

"The word is out, and it's given people pause," says Isabel Sawhill, a welfare expert at the Washington-based Urban Institute. "Potential recipients are less likely to apply, and more likely to take a job if it becomes available. The evidence is anecdotal, but it's pretty convincing."

But ask experts to explain why the welfare rolls swelled between 1989 and 1994, after nearly two decades at roughly steady levels, and all they can offer is a list of hypotheses, most of which they shoot down. They also urge perspective: For all the recent progress, the nationwide totals of 12.8 million recipients remains well above the levels of the 1970s and '80s, which hovered between 10 million and 11 million.

The factors researchers are looking at include:

*The rise of single motherhood. A study by the Congressional Budget Office blamed half of the surge in welfare caseloads on the increase in single-parent families. But experts note that the rise in out-of-wedlock births began around the mid-'60s - well before 1989 - and accelerated in the early 1980s. Until the end of the 1980s, the number of welfare recipients remained relatively constant.

"There's no way the number of single mothers went up by 10 to 20 percent a year after 1989," which is what happened to welfare rolls, says Robert Moffitt, an economist studying welfare at Johns Hopkins University in Baltimore.

*The decline in the labor market for low-skilled workers. Average wages for people at the bottom of the income scale declined throughout the 1980s, making work a less attractive option for some people, especially mothers lacking post-high school education. This depression of wages may have also made marriage a less available option for men, who felt they could not raise a family on such wages.

*The economic recession of 1989-91. Economists say that downturns in the economy account for some swelling of welfare rolls in general. But the CBO study found that only about a quarter of the growth of single-parent welfare families was attributable to the recession.

*Changes in Medicaid. Expansion of the availability of Medicaid, the government health program for the poor, may have made more families aware of the Aid to Families with Dependent Children program and caused an expansion of AFDC rolls. But some experts argue that the change in rules allowing families to receive Medicaid without being on AFDC may help explain the decline in AFDC rolls.

*Changes in welfare rules. In 1988, married couples with children became eligible for AFDC, which added to welfare rolls - but not by a large number.

*More legal immigrants applying for welfare. A government program in 1980s to legalize many undocumented workers would have made them eligible for AFDC. But experts doubt this would have added substantially to rolls, given that many illegal immigrants had already learned to survive without public assistance.

"In short, none of the explanations is plausible," says William Dickens, a Brookings Institution economist who is researching why welfare rolls swelled. "A few things haven't been ruled out. But so far, we're left with a big question mark."

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