Leavers, Stayers, and Cyclers An Analysis of the Welfare Caseload. Background

11/01/2002

 One of the first steps in understanding how leavers are faring and how the caseload has changed is figuring out why the caseload declined so dramatically since the early 1990s. Did most families leave because they found jobs in the expanding economy, or did they leave because of welfare reform? Caseload declines that are driven by the economy should result in fewer negative effects on family income or well being, since many families presumably left as they got jobs or increased their earnings and became ineligible for benefits. In this case, those who leave welfare will probably be the most employable segment of the caseload. Caseload declines that are driven by welfare policies, on the other hand, may encourage both more and less employable recipients to leave welfare and, by doing so, may make some families worse off, if they were encouraged to leave before making a solid transition to work. In addition, different welfare policies may have different effects. Time limits have generated the most concern in terms of their potential for negatively affecting families. There is some debate about what factor played the major role in the caseload decline, but all generally agree that both the expanding economy and welfare reform had important effects (Wallace and Blank, 1999; Council of Economic Advisors, 1999). 

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