May 10, 1999 | News Releases on Welfare and Welfare Spending

Welfare Delcline Due to State Work Rules, Not Strong Economy, Analysts Say

WASHINGTON, MAY 10, 1999-Some researchers attribute the nationwide decline in welfare caseloads-37 percent over the last three years-to a strong national economy, but states with the sharpest welfare declines are almost invariably ones with tough sanctions and immediate work requirements for welfare recipients, a new paper by The Heritage Foundation says.

By contrast, states with mild sanctions and lax work requirements experience much smaller reductions in their welfare caseloads, according to Heritage welfare analyst Robert Rector and researcher Sarah Youssef.

Between January 1997 and June 1998, the caseloads of states with strict accountability that are willing to promptly eliminate the entire welfare check if a recipient fails to comply with work requirements dropped by 41.8 percent, they write. States that withhold welfare checks only after a period of work infractions reduced their welfare rolls by 28.3 percent. And states that withhold only the adult portion of a welfare check when the recipient fails to work saw their caseloads decline by 17.3 percent.

Working with economists in Heritage's Center for Data Analysis, Rector and Youssef found virtually no correlation between the strength of a state's economy-as measured by unemployment figures-and the decline in its welfare caseload. In fact, on average, states with significant declines in their welfare rolls have higher unemployment rates, while states with more modest reductions have lower unemployment rates.

While the strength of the nation's economy is a "positive background factor" in the decline in welfare caseloads, the adoption of tough welfare reforms by many states is the most decisive factor in driving down welfare caseloads, they write. "Policy reform-not economics-is the principal engine driving the decline in dependence," Rector and Youssef say.


About the Author