Personal Responsibility and Work Opportunity Reconciliation Act

1996 marked a major shift in American policy regarding unemployment and poverty. Congress passed and the President signed into law the Personal Responsibility and Work Opportunity Reconciliation Act (PRWORA), which replaced the sixty-one year old Aid to Families with Dependent Children program (AFDC) with Temporary Assistance for Needy Families (TANF). The dramatic reform of the welfare program spawned a major debate among scholars and activists that transgressed partisan divisions. That a public problem existed was undisputed; exactly what the problem was (or is) is the subject of much controversy.

A Brief History of Welfare
Welfare, perceived by many to be the public problem, itself originated as a policy alternative to treat a public problem. At the time of its inception in 1935 AFDC was developed as part of a series of large-scale social reforms included in the New Deal following the Great Depression. New Deal programs such as AFDC aimed at stimulating the economy and creating jobs in the midst of massive market failure. The rationale behind AFDC at the time was actually to provide incentive for single mothers to stay home with their children and not work, thus reducing the labor supply and unemployment.[1] Today this has come to be seen by some as a major liability of the welfare program. FDR, in recognition of the fact that 100% employment was an economic impossibility, envisioned welfare and other income transfer recipients as contributing to society by accepting a meager income from the state in exchange for removing themselves from the labor market. AFDC was also targeted primarily at single mothers, and the pervasive ideology of the period held that mothers did not belong in the workplace.

Public problems are not static however, and since the adoption of the AFDC program in 1935 the political and economic landscape of the US has changed dramatically. Whereas policy makers in 1935 faced a massive market crash and resulting widespread unemployment, policy makers in the late 90’s face a booming economy and record-low rates of unemployment. Public attitudes towards women and work have also changed, and from the combined effects of these changes it can be expected that the definition of the public problem policy makers are attempting to treat has changed as well.

What exactly is the problem?

No analysis of the effectiveness of the recent welfare reform legislation can make sense unless the problem that the policy attempts to treat is defined. Literature on the effectiveness of welfare reform is confusing for precisely this reason; there are numerous and varied assumptions on what welfare reform, and welfare itself, aim to accomplish. A survey of welfare reform analyses reveals roughly three ideological frameworks of what the problem is with welfare.[2]

The first and probably most widely accepted definition of “the welfare problem” is simple and straightforward: welfare expenditure is an undue burden to the federal budget. With the growing concern over the past decade about balancing the budget the welfare program has been placed under scrutiny by policy makers. Another widely accepted definition of the welfare problem is that welfare promotes rather than alleviates poverty (the inherent assumption here is that welfare as a policy alternative aims to reduce poverty). This occurs because recipients are given disincentives to work; specifically, benefits are cut off once recipients are employed. Since welfare benefits typically provide much less income than even a low wage full-time job, recipients are caught in the “welfare trap,” and remain poor. Thus welfare works to deprive the poor of motivation to become upwardly mobile. Lastly, a third view sees the problem as a moral issue: that welfare undermines family. The underlying reasoning is that by subsidizing single mothers the state encourages non-marital (out-of-wedlock) births.[3] Authors who assume this problem definition often mention in passing the explosion of non-marital births over the past fifty or so years.

How effective is PRWORA?

With varying definitions of the public problem in regards to welfare, an analysis of the effectiveness of PRWORA as a policy will also vary. With regards to the first definition, let us examine the evidence for PRWORA as a measure to reduce public spending. First it is important to note that perceptions by the public of how much was spent on AFDC prior to the