The landmark welfare reform legislation passed by Congress last fall may be a minefield for welfare mothers but a fertile field for research, suggests economist Rebecca Blank in an article on "The 1996 Welfare Reform" that appears in the latest issue of NU Policy Research.
By abolishing Aid to Families with Dependent Children (AFDC) and replacing it with the Temporary Assistance for Needy Families (TANF) Block Grant to states, the law gives states nearly complete control over design of their public assistance programs and much more discretion in determining allocation of funds, Blank points out. It imposes new mandates for work requirements, payment limits for recipients, and a mandatory 5-year limit on support--though states may exempt 20% of their caseload and support them with state funds. But it offers states no new federal funds to expand their work programs.
These provisions, which went into effect July 1, 1997, could have serious ramifications for women now receiving AFDC, Blank cautions. She questions whether many of them could actually work a significant number of hours in the labor market, given their lack of skills and personal and health problems. Citing the higher unemployment rates and lower earnings of high school dropouts, especially those residing in isolated rural areas and urban sections of concentrated poverty, she thinks "the 1996 welfare reform legislation might be too optimistic about job availability, even in a strong macroeconomy." For those who do get jobs, the effects on their children's well-being are unknown and should be of high priority for researchers, she says.
Blank points to other wide-open areas for research that include:
Given the difficulty of implementing large organizational changes in state bureaucracies, Blank expects less than dramatic effects of the new legislation, particularly of a positive nature. The latter are especially unlikely, Blank says, "because the most disadvantaged populations--women at risk of long-term welfare use, with multiple out-of-wedlock children and whose job preparation is lowest--have proved hard to reach through policy interventions and appear to have only limited labor market options.
"At the very least it is unlikely to be cheap, quick, or easy to move them into greater self-sufficiency and employment and could make their situations worse," she concludes.
Blank is an IPR faculty fellow and former director of the Northwestern University/University of Chicago Joint Center for Poverty Research. She is currently on leave from Northwestern, serving as a member of the Council of Economic Advisers in Washington D.C.