September 17, 2006

Underreported Fact: Welfare Rolls are STILL Plunging

Filed under: Economy,MSM Biz/Other Ignorance,Taxes & Government — Tom @ 2:22 pm

OVERVIEW: An underappreciated accomplishment of the past five years has been the continued reduction in the number of people on welfare.


The welfare caseload, after declining dramatically in the first four years after Welfare Reform was enacted, might have been expected to level off, or even rise slightly with overall population growth, after the initial impact of the 1996 law wore off.

After all, the reduction in the number of welfare recipients during the 1990s was stunning. From a peak of over 14 million in 1994, and over 12.5 million at the end of 1996 (over 4.5 million families) when the new took effect, the number of those receiving welfare came tumbling down to about 5.5 million by the end of 2000 — a decline of nearly 2 million per year.

I’m not sure that anyone expected the numbers to steadily fall after the first four years of reform, but that is exactly what has happened. Here are the details for families and recipients on welfare as of the end of each calendar year beginning with the turn of the century (000s; the index to data for all years back to 1960 is here; figures below and related links were updated on August 13, 2007 to reflect slight changes made in Administration for Children & Families data):

Dec. 31, 2000: 2,155; 5,527 (from year-end 2001 reports)
Dec. 31, 2001: 2,101; 5,276 (from year-end 2002 reports)
Dec. 31, 2002: 2,045; 5,014 (from year-end 2003 reports)
Dec. 31, 2003: 2,003; 4,844 (from year-end 2004 reports)
Dec. 31, 2004: 1,970; 4,695 (from year-end 2005 reports)
Dec. 31, 2005: 1,863; 4,386 (from latest available 2006 reports)
Mar. 31, 2006: 1,808; 4,223 (from latest available 2006 reports)

The reductions in families and recipients on welfare over the last 5-plus years are almost 16% and over 23%, respectively, which the country’s overall population has increased by about 6%. The percentage of the population receiving welfare benefits has dropped from 1.95% at the end of 2000 to 1.42% — a per-capita drop of over 27%.

It’s also worth noting that since reform took effect, the ratio of recipients to families has gone down from 2.56 to 2.33 — perhaps indicating a significant slowdown in the “babies making babies” phenomenon.

It seems to me that the following deserve kudos, and at least some media attention, for the continued, and I believe mostly unexpected, progress: The Administration for Children and Families (ACF); its Director, Wade Horn; and, of course, the frontline people in the agency and in the states who have been making it all happen.

To get the numbers down further and thereby move more individuals and families into the economic mainstream, ACF would do well to focus on three persistent problem spots, all of which have generally escaped media mention:

  • California — The Golden State apparently abandoned governor Ronald Reagan’s landmark welfare reforms of the 1970s. Paul Weyrich noted earlier this year in a Townhall column that “Reagan managed significantly to cut welfare rolls while increasing support for those who really needed help.” But by the time nationwide welfare reform kicked in, a mind-boggling 8% of the state was on the dole — over 2.6 million people. While the state’s caseload has dropped to a current 1.05 million, the rest of the nation’s improvement has been much greater. California today has about 12% of the nation’s population but about 25% of the total welfare caseload. Perhaps contrary to expectations, California’s outsized welfare problem probably cannot be traced to immigration, as Florida, Arizona, and Texas do not have disproportionately large welfare populations.
  • Tennessee — The Volunteer State’s welfare situation is also seriously out of whack; it has 2% of the nation’s population but 4.3% of all welfare recipients. The state’s nearby neighbors do not have anything resembling this severe of an imbalance.
  • The District of Columbia — Though relatively small in population, The District is far and away the statistically worst Welfare Reform performer when compared to the 50 states. A given DC resident is almost five times more likely to be on welfare than a person in the rest of the country as a whole. Despite a declining population, welfare rolls have not even been cut by half since Welfare Reform kicked in.

It’s likely that other urban core areas have situations that are similar to DC’s, but only state-level information was available for this post.

One hopes that the record of improvement continues. Every former welfare recipient who enters the workforce transforming himself or herself into a societal contributor, and from a tax-taker to a taxpayer.

And here’s a related thought that I wish I had time to follow up on: How much of the prosperity of the late 1990s, and how much of the budget-deficit turnaround that occurred, can be traced to over 2 million adults coming off the dole and entering the workforce during that time? I suspect that the answer is “much more than a little.”

Cross-posted at


1 Comment

  1. Economics and Social Policy XIV…

    A post on the Economics and Social Policy Carnival….

    Trackback by The Boring Made Dull — September 24, 2006 @ 8:22 pm

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