Cash Assistance in America: The Role of Race, Politics, and Poverty

Abstract

We examine the predictors of state spending on Temporary Assistance for Needy Families (TANF) cash assistance, which has fallen dramatically since the passage of welfare reform in 1996. Over the 2000s, states allocating 33% or more of their TANF expenditures toward cash assistance are more likely to have higher minimum wages and are more liberal, though with fewer Black residents—both overall and on the TANF caseload. Our preferred empirical specifications suggest a negative link between state basic assistance expenditures—which we use as a measure of cash assistance—and the proportion of Black residents on the state’s TANF caseload. These findings contribute to a longstanding body of research examining the political economy of racial disparities within the welfare system and support further investigation into the mechanisms driving these observed associations. Upon considering the Kerner Commission’s call to reinvest in economically disadvantaged communities, it is important to consider how reform proposals modeled off of TANF may extend to new domains of the American social safety net. Our findings, as well as those of others within the welfare research literature, recommend a closer look at whether and how race operates within systems of devolved authority.