Association for Public Policy Analysis & Management

Welfare programs are intended to help poor families and individuals survive when their income falls below a certain threshold. Welfare spending has steadily increased over the past 50 years with the expectation of significantly impacting poverty rates in the United States. The increase in spending in the 60s coupled with the push for employment-based benefits in the 90s should have made a substantial impact on overall poverty rates in the United States, yet the percentage of impoverished families is largely unchanged hovering around 15% of the population for the last 50 years. However, Previous studies focus on national level and do not take into account differing state demographics and spending levels. While some states have shown improving poverty rates, other states have poverty on the rise despite increases in welfare spending. Although cross-national studies show welfare spending reduces poverty, the United States does not fit the normal pattern. Therefore, this paper analyses state level data for poverty and unemployment rates as well as state spending on welfare per capita for the years 1992-2013.Welfare programs in the United States are designed as safety net programs, keeping people from falling too deeply into poverty, but often lack the ability to bring families out of poverty. Employment typically offers greater income than welfare programs; families that have working adults are less likely to live in poverty than households without a working adult. Mid-90s reforms linked welfare to working, with the idea that it would incentivize families to seek employment and greatly improve their chances of escaping poverty. However, while this regulation has induced employment among recipients, hours worked are often only enough to meet program requirements and there is no long-run impact on employment income. The data shows that state poverty rates are tied closely to unemployment rates and are independent of welfare spending levels even after work-requirements were added.