Journal of Economic Perspectives
ISSN 0895-3309 (Print) | ISSN 1944-7965 (Online)
Did Welfare Reform End the Safety Net as We Knew It? The Record since 1996
Journal of Economic Perspectives
vol. 39,
no. 1, Winter 2025
(pp. 101–28)
(Complimentary)
Abstract
This paper examines the evolution of the safety net for low-income families since welfare reform in 1996 promised to "end welfare as we know it". The total package of supports has become substantially more generous, but has changed in character. Support has shifted away from monthly cash transfers towards tax credits and in-kind benefits, and has expanded for working families while declining for those without earnings. Resources available to married-parent families have expanded, whereas those for adults without dependents remain scant. We also document that, despite expanded state flexibilities, variability in generosity across states did not grow due to simultaneous expansions of federal food assistance and tax credits. Overall, these changes reflect ongoing contention over two key policy issues. First, what is the appropriate trade-off between promoting work versus preventing material hardship? Second, what is the appropriate role for states versus the federal government in determining safety net generosity?Citation
Schmidt, Lucie, Lara Shore-Sheppard, and Tara Watson. 2025. "Did Welfare Reform End the Safety Net as We Knew It? The Record since 1996." Journal of Economic Perspectives 39 (1): 101–28. DOI: 10.1257/jep.20231392Additional Materials
JEL Classification
- H53 National Government Expenditures and Welfare Programs
- H75 State and Local Government: Health; Education; Welfare; Public Pensions
- I13 Health Insurance, Public and Private
- I18 Health: Government Policy; Regulation; Public Health
- I32 Measurement and Analysis of Poverty
- I38 Welfare, Well-Being, and Poverty: Government Programs; Provision and Effects of Welfare Programs