The Personal Responsibility and Work Opportunity Reconciliation Act (PRWORA) of 1996 ended the longstanding unconditional cash assistance program and installed a new time limited and work-focused social assistance program –– Temporary Assistance for Needy Families (TANF). TANF has aimed to promote work and self-reliance, and it has established that individuals are subject to work requirements and a federal 60-month time limit on welfare. Under TANF, states are able to impose further restrictions beyond the federal requirements, and many have done so. While PRWORA has been shown to positively affect employment in the immediate aftermath of 1996, little is known of the extent to which stringencies in various state TANF policies have affected individuals long-term. These policies affect millions of poor families, and stringencies add to levels of psychological stress and stigma families experience. In this proposed study I intend to investigate how stringent and lenient welfare approaches differ in their impacts on an individual’s long-term self-sufficiency.

I will use a nationally representative longitudinal dataset – Survey on Income and Program Participation 1996, 2001, 2004 Panels (covering 1996-2008) to estimate the intent-to-treat effect of stringent versus lenient TANF policies on self-sufficiency among the potentially affected population. Since selection into TANF participation is not random, estimating intent-to-treat effects could more accurately capture policy effects. I will use low-educated single mothers as the proxy for the population most likely to be affected by TANF, and the self-sufficiency trajectory over time will be tracked using tenure in single motherhood post-1996 as the trend variable. Hence, I restrict the sample to mothers aged 18 and above at baseline and who do not have a bachelor or higher degree at any time point during the panel. A state’s TANF regime is defined as stringent if its time limits are below 60 months and/or the initial sanction to noncompliance to work requirements is to remove the entire benefit. An individual’s self-sufficiency is characterized by work participation, earnings, and dependency on welfare. I use multiple imputations to address the missing data problem, and random effect models will be used to estimate state policy impacts on an individual’ long-term self-sufficiency progress.

Preliminary results indicate that stringent state TANF policies do not show superior effect on long term self-sufficiency. Single mothers in stringent states do not earn more or have faster earnings growth. They also do not show lower likelihood to use welfare over time. Although there is evidence that single mothers are more likely to be employed in stringent states, single mothers in lenient states have faster employment growth and could overtake the employment advantage in stringent states within 8 years. 

By examining whether stringent requirements encourage individuals to work more, earn more, and be less likely to receive welfare over the long term, this study could help states design effective and humane policies. Findings may also help shed light on debates over the rationality and effectiveness of workfare policies.