Distinguished Lecture on Economics in Government—Fighting Poverty: Lessons from Recent U.S. History

Abstract

Welfare reform efforts in the 1990s aimed at reducing welfare dependence and moving women into work. Public assistance use fell and labor force participation among mothers rose at a stunning rate over the decade. Poverty declined, but at a slower rate. These changes are causally related to the strong macroeconomy, welfare reform efforts, and other policy changes, especially the EITC and minimum wage expansions. This paper concludes that all of these effects reinforced each other, producing very large behavioral changes. It is too early to predict the effects of these changes on long-term family well-being.