Did Welfare Reform End the Safety Net as We Knew It? The Record since 1996

Lucie Schmidt, Lara Shore-Sheppard and Tara Watson

Journal of Economic Perspectives, 2025, vol. 39, issue 1, 101-28

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?

JEL-codes: H53 H75 I13 I18 I32 I38 (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:aea:jecper:v:39:y:2025:i:1:p:101-28

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DOI: 10.1257/jep.20231392

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