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Labour Markets, Gender and Institutional Change

Essays in Honour of Günther Schmid

Edited by Hugh Mosley and Jacqueline O’Reilly

The original essays in this book have been written by a number of leading international experts in the field of labour market studies to honour the intellectual contribution and lifetime achievement of Günther Schmid.
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Chapter 8: The 1996 US welfare reform: objectives, effects and lessons

Robert Haveman and Barbara Wolfe


Robert Haveman and Barbara Wolfe August 1996 is a watershed date for US social and economic policy. On that date, Congress passed into law a far-reaching welfare reform, the Temporary Assistance for Needy Families (TANF) programme. In many ways, TANF reflects the ascendance of a social philosophy that society should require all able-bodied individuals and families to be economically independent and self-reliant. It attempts to accomplish this by minimizing collective cash support for individual well-being while increasing the reward to work effort. Since the implementation of the welfare reform law in 1996, welfare rolls have fallen by more than 50 per cent.1 THE 1996 WELFARE REFORM: TANF TANF2 replaced a welfare system that was based on a quite different philosophy, namely that all individuals and families should be assured a minimum level of living through some combination of own income and public transfers. While the socially accepted level of living implicit in this system was meagre relative to the norms of many of the generous western European welfare states, and while it varied from state to state, the pre-TANF system nevertheless provided such a safety net for all families except the ‘working poor’.3 The major provisions of TANF included, first, the elimination of the major cash assistance programme to poor people, the Aid to Families with Dependent Children (AFDC) programme; second, the reassignment of fiscal and regulatory responsibilities for assisting the nation’s poor families from the federal government to state and local governments;4 third, the provision of a...

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