Welfare reform worked - don't fix it

When President Clinton signed welfare reform into law in 1996, many observers predicted a sharp increase in poverty among single mothers and their children. Some social welfare advocates worried that single mothers would be unable to find work, or that moving from welfare to work would boost their income while decreasing their material standard of living.

For example: A single mother might replace her $550 monthly welfare and food stamps with $800 per month from a $6-an-hour job, yet incur $650 monthly expenses for child- and healthcare.

As the welfare rolls fell to the lowest levels in 40 years, we counted ourselves among the concerned. But our recently completed study of 25,000 single-mother families in the post-welfare reform era surprised us. Our findings disproved the theory that welfare reform would increase hardship. Instead, poverty and hunger among single mothers and their children have declined, even taking into account the negative impacts of the 2001 recession.

Our research cannot prove that welfare reform was solely responsible for the improvement in living standards. But it does reveal an important lesson for Congress as it seeks to reauthorize federal welfare reform legislation: Don't fix what ain't broke.

Determining how single mothers fared in the wake of welfare reform is complicated. The official poverty rate for these families declined from 43 percent in 1996 to 33 percent in 2000. As single mothers moved from welfare to work, their expenses for childcare, healthcare, and transportation often did increase. That's why we'd expected that welfare reform might have actually increased hardship among single mothers and their children, despite the income gains that pushed many of them above the official poverty line.

So to bypass the shortcomings of the official poverty rate as a measure of hardship, we instead examined changes in single mothers' ability to put food on the table. These measures ranged from the relatively common (whether or not a family's monthly budget ever required them to stretch their food supply) to the severe (whether a child ever went hungry for an entire day).

Our analysis of nearly 50 of these measures revealed that food problems among single-mother families consistently declined between 1995 and 2000, when the economy was expanding. Food problems increased between 2000 and 2002, during the brief recession and "jobless recovery" that followed. But by the end of 2002, single-mother families were still significantly better off than before welfare reform.

From the early 1960s to the mid-1990s, economic expansions reduced poverty more among two-parent families than among single-mother families, and recessions harmed two-parent families more. This history is consistent with the opposing accounts of welfare as a poverty trap and a safety net: During booms, single mothers did not benefit from economic growth as much as they might have, but during busts they were shielded from rising unemployment.

But since the 1996 welfare reforms, the opposite pattern has prevailed: Until joblessness began increasing in 2000, hardship declined among single-mother families at a faster rate than among two-parent families; since then hardship has worsened at a slightly faster rate among single mothers.

Welfare reform and other policy changes that made work pay - such as the Earned Income Tax Credit, a higher minimum wage, and expanded childcare subsidies - ensured that single mothers gained more from the 1990s boom than they otherwise would have. Without these policy changes, economic growth would have had a more modest impact. The example of the late 1990s shows - contrary to the fears of liberals - that when policy "sticks" are accompanied by policy "carrots," legislators can simultaneously promote work and improve the living standards of single-mother families.

But it doesn't follow that it is now time to adopt the even tougher policies advocated by conservatives. The proposals before Congress attempt to move more welfare recipients into the workforce, and more quickly. If they succeed and do not provide sufficient work supports, the beneficial outcomes of the 1990s may not follow. This is of particular concern because the most employable women receiving welfare have already left the rolls, and the women who remain are likely to have low skill levels, poor health, sick children, and other barriers to work.

The lesson of the 1990s is that "work promotion plus work supports" can reduce poverty, but the question of how to help those who cannot find work - but face a five-year limit on federal benefits - remains unanswered.

Welfare reform was the product of compromise among both Democrats and Republicans, and it clearly has succeeded. Rather than make substantial changes of uncertain wisdom, we believe that Congress should reauthorize welfare reform along the lines of the 1996 legislation.

• Scott Winship is a fellow at the Wiener Center For Social Policy at Harvard's Kennedy School of Government. Christopher Jencks is Malcolm Wiener Professor of Social Policy there. Their study is accessible at: http://ksgnotes1.harvard.edu/research/ wpaper.nsf/rwp/RWP04-027