What Works Is Work: Welfare Reform and Poverty Reduction

Haskins, Ron | January 1, 2009

This is an essay about how the 1996 welfare reform law and other policies contributed to the sharpest decline in child poverty since the early 1970s. The story is told in the context of the nation’s long struggle to reduce poverty and the factors that have made it so difficult to make progress against poverty. These factors involve both forces over which individuals have little or no control and factors over which they have almost complete control. Such factors include the problems with child poverty, male non-work, education rates, and the influx of low-skilled immigrants. To a large extent, the achievement of welfare reform was to use both positive and negative incentivescarrots and sticks. The sticks encourage, cajole, or force able-bodied mothers to exploit the factors over which they have control and enter the labor force. The carrots reinforce their initiative with government-provided benefits that support poor and low-income workers. I argue that this combination of carrots and sticks is the most successful strategy for reducing child poverty that the government has yet devised. The strategy enjoys solid support from taxpayers, which suggests that innovative expansions that further increase personal responsibility, increase income, and reduce poverty would receive public support. Unfortunately, there are clear downsides to the new policies, raising the issue of whether creating outcomes that include increased work, increased income, and reduced poverty for many offset the decline into deep poverty of a few. The Article concludes by suggesting policy changes in order to maintain the country’s work support system, to reduce non-marital birth rates and increase marriage rates, to better assist single-mothers, and to better assist young black males.