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Executive Summary 
 
Routing 
 Implementing Welfare Reform
 A State Report Card 
by Jenifer Zeigler
In 1996 the Personal Responsibility and WorkOpportunity Reconciliation Act was signed intolaw, and the nation waited to see if welfarereform would truly “end welfare as we know it.”Block grant funding and administrative devolu-tion gave the states a chance to move beyondpilot programs and prove that they could transi-tion people off welfare more efficiently and effec-tively than the federal government. As a result,caseloads have dropped by more than half.Congress is currently debating the reauthoriza-tion of PRWORA, and there are a variety of per-spectives on the direction welfare reform shouldnow take. It is useful to look at the policy decisionsstates have made over the past seven years and com-pare the results. This paper emphasizes the positivepolicy choices made by states regarding welfarereform implementation—choices that encouragepersonal responsibility and self-sufficiency.Strong structural reforms in a state’s welfaresystem—including time limits, sanctions, and nar-row definitions of work activity—lay the founda-tion for successful reorganization. Idaho, Ohio,Wisconsin, and Wyoming combined those re-forms with positive quantitative outcomes andreceived the highest grade of A. California andNew York, the states with the largest welfare case-loads, will struggle to maintain their C grades inthe coming years since they lack programs thatencourage self-sufficency. Vermont received thelowest of the failing grades, including the lowestgrade on implementation of structural reformsrequired for a successful state welfare program.Strained state budgets, a fluctuating economy,and new “pet programs” packed into welfare reau-thorization will all change the face of welfare overthe next several years. This study offers analysis of state welfare reform implementation in the pres-ent and can serve as a baseline for tracking welfarereauthorization program changes in the future.
_____________________________________________________________________________________________________
 Jenifer Zeigler is a welfare policy analyst with the Cato Institute.
No. 529October 19, 2004
 
Introduction
The Personal Responsibility and WorkOpportunity Reconciliation Act of 1996made great strides in welfare reform. The leg-islation reflected ideas and programs thatwere already being tried on the state level andgranted the states flexibility to continueexperimentation with new methods of wel-fare reform. Many people consider PRWORAa success because welfare rolls have droppedsignificantly; yet that cannot be the only measure by which reform achievement isevaluated, as many factors contribute to thereduction of welfare rolls. Only time will tellwhat role the healthy economy of the late1990s played, if people who are removedfrom the rolls can maintain employment andstay off welfare, and if reduced child poverty is a product of welfare reform efforts.The new Temporary Assistance to Needy Families program places cash assistance inthe states’ hands to distribute, with workrequirement and time limit guidelines. Theresults have been impressive—not only didwelfare caseloads drop 58 percent between1996 and 2002,
1
but the employment rate fornever-married single mothers rose from 46 to68 percent during roughly the same timeperiod.
2
The greatest result welfare reform couldproduce would be the elimination of the wel-fare system. PRWORA removed the entitle-ment to cash assistance and now sends themessage that welfare is meant to be tempo-rary, not a way of life. As welfare administra-tion continues to devolve from the federalgovernment to the states, and eventually tomore local levels, communities will effective-ly assume responsibility for the welfare sys-tem. Those localities, held accountable by local residents and voters, will begin to findinnovative ways to meet the needs of thepoor, using charitable organizations andencouraging civil society solutions ratherthan relying on government.Pilot programs, waivers, and the flexibleguidelines of the block grant system allow states to experiment with programs andmake policy decisions that best serve theircitizens. This report card is designed toreview and compare the structural reformsstates have implemented and the quantita-tive results those programs have produced.
State Grades
Welfare reform has allowed states the flex-ibility to spend money and implement pro-grams that will help recipients escape wel-fare’s “cycle of dependence.” The idea behindwelfare reform was to provide recipients with job experience for a better transition into the job market, rather than to give them cashhandouts for doing nothing. With job skillsand an incentive to hurry off the rolls (timelimits), families have been leaving welfare inrecord numbers.This report card grades each state on pro-gram and performance measures. It is just asimportant to evaluate the programs a state hasinstituted (structural reforms) as the results of those reforms (quantitative results). It is neces-sary that states reduce caseloads and poverty rates, but if they are not establishing soundwelfare policies that will sustain self-sufficien-cy, many people in need will never completely escape the system.Unfortunately, as the scope of evaluationincreases, so do the number of variables.Structural reforms evaluated in this reportcard are influenced by a number of significant variables. States will always have differentdemographics; some welfare populations areaggregated in urban areas, and some stateshave higher immigrant populations. Policieshave different effects on each state as a resultof its diverse populations. Moreover, the stag-gered implementation of most welfare reformpolicies means that some programs may nothave had time to produce results. Statesreceive the same credit for implementing a policy, whether a state implemented the pro-gram directly after welfare reform or only lastyear. Some programs also take time to pro-duce results, especially programs designed todiscourage self-defeating behavior such as
2
Not only didwelfare caseloadsdrop 58 percentbetween 1996 and2002, but theemployment ratefor never-marriedsingle mothersrose from 46 to 68percent.
 
teenage pregnancy. Finally, states handleexternal influences, such as economic cycles,differently. Although many states follow thenational economic trend, they may experienceeconomic change at different times.Some components of sound welfare reformpolicy are not best measured quantitatively. Itis difficult to place a numeric value on struc-tural reforms that encourage self-sufficiency and personal responsibility. The quantitativeresults used in the report card are certainly indicators of successful welfare reform, butthey cannot reflect important accomplish-ments such as encouraging community orga-nizations to take over social services or chang-ing the perception of welfare as a safety netrather than a lifestyle subsidy. As a result of the numerous variables andincomplete measurements, the correlationbetween successful structural reforms andpositive quantitative results is not perfect. Although a relationship between reforms andresults exists, this report card was notdesigned to establish or highlight that rela-tionship. Rather, criteria were selected thatwould reflect the direction of a state’s welfarepolicy. Both quantitative and qualitative mea-sures are necessary to see each state’s welfarereform implementation in its entirety.The states with the highest grades rankedin the top third of the states in both structur-al reforms and quantitative measures. Thosestates recognized that it is important to re-duce rolls and rates in the short term (high
3
The greatestresult welfarereform couldproduce would bethe eliminationof the welfaresystem.
Table 1Overall Grades
StateOverall ScoreLetter GradeStateOverall ScoreLetter GradeIdaho76ADelaware52COhio74AMontana51CWyoming72AWest Virginia50CWisconsin71AArkansas50CFlorida68BOregon50CConnecticut63BAlabama49DVirginia62BKentucky49DIllinois61BOklahoma49D New Jersey60BTennessee46DIndiana60BMassachusetts44DIowa60BNevada43DMaryland58CMichigan43DCalifornia58CPennsylvania43DSouth Carolina57CTexas40DArizona57CMinnesota40D New York57CAlaska40DGeorgia56CNebraska38F North Carolina55CRhode Island38FColorado55CUtah37FWashington55CNew Hampshire36FHawaii55CD.C.36FSouth Dakota54CMaine36FLouisiana54CNorth Dakota36FKansas53CMissouri36FMississippi53CVermont21F New Mexico52C
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