Personal Responsibility and Work Opportunity Reconciliation Act of 1996

Personal Responsibility and Work Opportunity Reconciliation Act of 1996 fundamentally changed the cash welfare system in the United States. It cancelled Aid to Families with Dependent Children (AFDC) plan, replacing it with Temporary Assistance for Needy Families (TANF). It abolished the entitlement status of welfare, provided states with strong incentives to impose time limits, and tied funding levels to the states’ success in moving welfare recipients into work. It is well known that caseloads plummeted during the 1990s and that employment rates of single mothers--the primary recipients of welfare in the United States—rose almost as fast (Shipler).

TANF strengthened and introduced new behavioral requirements. It requires most recipients to work or participate in so-called work-related activities. It imposes time limits on the receipt of federally funded benefit. It also allows states to use financial incentives to encourage business (Weil). PRWORA also sought to promote marriage, maintain two-parent families, and reduce out-of-wedlock childbearing. To reduce the perceived disincentive to marriage, many states relaxed eligibility rules that made it difficult for married couples to receive welfare. To reduce perceived childbearing incentives, various states imposed family caps, which prevented benefits from rising when new babies are born to mothers already receiving welfare. To reduce the incidence of unwed-teen childbearing, many states required minor parents to live with their own parent or guardian. The states also implemented other measures designed to encourage parental responsibility more generally. At the same time that these dramatic changes in welfare policy were taking place, welfare-related behavior was changing in...

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