Does work first policy make former welfare recipients better off?

Since the passage of Personal Responsibility and Work Opportunity Reconciliation Act (PRWORA), welfare caseloads have declined by one half, and work participation rates have increased significantly. Does this mean that former welfare recipients’ living got improved after welfare reform? Too much attention has been paid to caseloads and work participation rates to evaluate welfare reform, while the status of former welfare recipients’ economic well-being has been minimized. This study examines disposable income changes of former welfare recipients before and after welfare reform. The 1996 Panel of the Survey of Income and Program Participation (SIPP) is used for the analysis. Overall, more than a half of the subjects have less disposable income after the reform. Specifically about a quarter of the subjects left welfare without working, and most of them experienced significant income loss. Additionally, more than a quarter of working leavers had less income after the reform and only a few received work-related subsidies for which they might be eligible. The author suggests improvements in welfare administration to help people get all their benefits and public job creation to lower work barriers.