Incentives, Challenges, and Dilemmas of TANF

Barbara Wolfe ()

Institute for Research on Poverty Discussion Papers from University of Wisconsin Institute for Research on Poverty

Abstract: The Personal Responsibility and Work Opportunity Reconciliation Act of 1996 changed the U.S. welfare system dramatically. Its primary goal was to reduce dependency by moving most of those receiving cash welfare into the work force. One tool to accomplish this objective was a change in the incentives facing actual and potential recipients. States were granted flexibility in how to accomplish this objective. This paper evaluates the program in four states in terms of efficiency and equity. It looks briefly at resulting labor force participation and incomes of those most directly affected by welfare reforms. The analysis highlights the difficulty of simultaneously providing incentives to work and incentives to increase individuals’ labor market productivity while maintaining a minimal safety net and avoiding high marginal rates of taxation. None of the states studied is able to avoid a “poverty trap” in its program. The need to coordinate the benefit and withdrawal schedule of programs designed to help this population flows from the analysis.

References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

Downloads: (external link)
http://www.irp.wisc.edu/publications/dps/pdfs/dp120900.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:wop:wispod:1209-00

Access Statistics for this paper

More papers in Institute for Research on Poverty Discussion Papers from University of Wisconsin Institute for Research on Poverty Contact information at EDIRC.
Bibliographic data for series maintained by Thomas Krichel ().