CASELOAD IMPACTS OF WELFARE REFORM

Terry R. Johnson, Daniel H. Klepinger and Fred B. Dong

Contemporary Economic Policy, 1994, vol. 12, issue 1, 89-101

Abstract: A welfare reform demonstration program designed to reduce Aid to Families with Dependent Children (AFDC) recidivism through increased employment and training services resulted in significantly higher short‐term caseload growth. Demonstration sites attracted proportionally more households onto assistance early in the demonstration than did comparison sites. These entrants tended to have more extensive previous employment histories. This result suggests that the demonstration attracted individuals who previously qualified for AFDC but did not apply for benefits and/or individuals who reduced their employment to qualify for AFDC. Exits from AFDC also were delayed under the demonstration, suggesting that the more intensive services provided through the demonstration required more time to complete. Finally, certain groups—nonwhites and those with language problems, for example—apparently avoided the demonstration by not migrating into demonstration sites or by migrating out of demonstration sites. These results have important implications for the likely costs of state welfare reform efforts under the Family Support Act of 1988.

Date: 1994
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