Three years after the passage of welfare reform legislation, everyone wants to know if it is a success. On the one hand, caseloads have declined precipitously and many who left welfare are working. On the other, many former welfare families continue to struggle. The truth is we do not yet know. America's desire to help poor families with children is ill-served by claiming victory or conceding defeat prematurely.
The 1996 reform fundamentally changed welfare. The old welfare program sent out assistance checks. New welfare programs must help recipients prepare for and move into work. This is no easy task because almost all recipients are single mothers with children, and many have little or no work experience. Further, the new law limits the time most families can receive benefits to at most five years over their lifetime. In some states the limit is 21 months. The broad scope of these changes means that implementation takes time.
Yet we do know that welfare reform already has had an impact. Almost 7 million fewer people are receiving welfare now than in 1993, a 50 percent decline. Although some of the decline reflects the strong labor market, a study by the Council of Economic Advisers finds that welfare reform accounts for one-third of the reduction since 1996.
But the sole gauge of welfare reform's success should not be lower welfare rolls. Ultimately what counts is the consequences for poor families and their children.
Since reform, many families have moved from welfare to work. In 1997 three-fourths of all families that left welfare had an employed adult. This employment rate is higher than many expected before reform and comparable to those of other low-income families with children who have not recently received welfare. But many of the jobs former recipients hold are low-wage and don't come with benefits, such as health insurance. The average hourly wage for these working welfare leavers is $6.61. Average monthly earnings for these families total $1,149.
So are those who leave for work better off? In all states, a woman with two children will increase her income if she leaves welfare to work full-time at a minimum wage job (35 hours per week at $5.15 an hour) as long as she receives all the other benefits for which she qualifies. These additional supports -- including food stamps, Medicaid, child care subsidies and the earned income tax credit -- are key to making work pay.
What is troubling is that many of these families are not receiving benefits such as food stamps and Medicaid that should be supplementing low wages. Only a third of former recipient families are receiving food stamps, and only about half of their children have Medicaid. One-third of families that left welfare report having to eat smaller or fewer meals because food is in short supply, while nearly 40 percent report problems paying rent, mortgage or utility bills.
Obviously, if families are to make successful transitions to work, they need to have access to the benefits already in place to help support that transition. More attention needs to be focused on making sure former welfare recipients know they are eligible for food stamps and Medicaid and making sure these programs are easier to use.
Figuring out whether welfare reform is a success means looking beyond how families that recently left welfare are faring today.
For those families that have left welfare and joined the work force, success will depend on whether they move into jobs with higher wages and benefits so that they can be not just better off than when they were on welfare but move further toward self-sufficiency.
For families still on welfare, success means beating welfare time limits. Will they be ready and able to work? If recession ends our boom, will the newly employed keep their jobs? Will welfare recipients find jobs?
Welfare reform has dramatically changed one of the nation's largest programs for helping poor families. Many more have left welfare than expected, and many of these families that are making a fresh start continue to need support. That much we know. But more than that we don't know -- and can't -- until time limits expire, the economy cools off and the newly employed have the chance to become permanently employed. Claiming before then that welfare reform has succeeded or failed is easy but wrong.
The writer is a senior research associate at the Urban Institute.