How Welfare Reform is Affecting Women's Work

Abstract

The new welfare system mandates participation in work activity. We review the evolution of the 1996 legislation and how states implement welfare reform. We examine evidence on recipients' employment, well-being, and future earnings potential to assess the role of welfare in women's work. Policies rewarding work and penalizing nonwork, such as sanctions, time limits, diversion, and earnings “disregards,” vary across states. While caseloads fell and employment rose, most women who left welfare work in low-wage jobs without benefits. Large minorities report material hardships and face barriers to work including depression, low skills, or no transportation. And disposable income decreased among the poorest female-headed families. Among the important challenges for future research is to differentiate between the effects of welfare reform, the economy, and other policies on women's work, and to assess how variations in state welfare programs affect caseloads and employment outcomes of recipients.