Approaches to Evaluating Welfare Reform: Lessons from Five State Demonstrations. Chapter 1: Introduction


The federal welfare reform legislation enacted in August 1996 (the Personal Responsibility and Work Opportunity Reconciliation Act of 1996--P.L. 104-193) eliminates the Aid to Families with Dependent Children (AFDC) entitlement program and replaces it with a block grant to the states. Under the block grant, states will design, implement (by July 1997), and administer their own programs to aid families with dependent children. These programs, however, must satisfy requirements in the new federal law concerning such matters as work requirements for program participants and limits on the amount of time that a family can receive assistance.

Although the former AFDC program was federally administered and imposed requirements on the states, it did offer the states considerable flexibility to deviate from those requirements through a formal process of applying for and receiving federal waivers to implement welfare reform demonstration programs. Provision for waivers of AFDC regulations is included in Section 1115 of the Social Security Act, which was added to the original 1935 act as part of the Social Security Amendments of 1962. Section 17(b) of the Food Stamp Act provides for similar waivers of federal regulations governing the Food Stamp Program. Beginning in 1992, the Bush administration actively encouraged states to initiate reforms to their welfare systems through these waiver provisions. The Clinton administration continued this encouragement and had approved AFDC waivers for 43 states as of August 1996. The new law limits the DHHS waiver authority, but expands Food Stamp waiver authority by giving states more flexibility to experiment with Food Stamp rules under waivers.(1) In addition, the act allows states to keep their waiver programs in place for the duration of the waivers, if the waivers are inconsistent with the requirements of the new law. Because this report is being prepared in September and October 1996, it is not clear how this provision will be interpreted or how many states will keep their waiver programs (and evaluations) in place.

In granting a state's request for waivers of regulations governing the AFDC and Food Stamp programs, the federal government required that the state satisfy explicit terms and conditions. The terms and conditions, which the federal government negotiated with each state, (1) defined the new policies under which the demonstration programs would be run, (2) required the demonstrations to be cost neutral to the federal government, (3) specified requirements for evaluations of the demonstrations, and (4) detailed the cost neutrality methodology and reporting requirements. Accompanying the terms and conditions was a list citing the specific provisions of the Social Security Act and the Food Stamp Act that were being waived and the nature of the waivers. The terms and conditions also required the state to contract with a third party to evaluate the effects of the waivers. In general, the evaluation was to include impact, cost-benefit, and process/implementation analyses.

Several divisions within the U.S. Department of Health and Human Services (DHHS) were responsible for reviewing and approving state Section 1115 waiver applications along with the Office of Management and Budget (OMB).(2) DHHS project officers were responsible for reviewing the evaluation plans that states submitted as part of their waiver application packages and monitoring the conduct of the evaluations. Although they shared certain design features, the evaluations used widely divergent methods to achieve similar research objectives. DHHS determined that it would be useful to obtain a broader perspective, from a source outside of the day-to-day activities of reviewing and monitoring the evaluations, to identify common research issues and to assess the appropriateness of the approaches that the states and the third-party evaluators had adopted. DHHS contracted with Mathematica Policy Research, Inc., (MPR) to conduct this study of evaluations. This report presents our findings and recommendations.