The 1996 national welfare reform law imposed a five-year time limit on federally funded cash assistance, established stricter work requirements, and provided greater flexibility for states in designing and managing programs. This report — the last in a series from MDRC’s Project on Devolution and Urban Change — describes how welfare reform unfolded in Los Angeles County (particularly between 1998 and 2001) and compares welfare reform experiences and outcomes there with those in the other three Urban Change sites: Cuyahoga County (Cleveland), Miami-Dade County, and Philadelphia.
Los Angeles is a big and complex urban county, with a welfare caseload that is larger than that of 48 of the 50 states. In addition to its sheer size, the Los Angeles story is also unique among the four Urban Change sites because its new welfare policies were gentler on families, with time-limit and sanctioning rules that continued to provide benefits to children and with other policies that made it easier for welfare recipients to increase their income by combining welfare and work. That said, the welfare reform experience in Los Angeles paralleled in many ways what happened in the three other Urban Change counties: The county had a rigorous work participation requirement that typically kicked in after a recipient had been on welfare for 18 months, and it developed policies to help move welfare recipients into jobs; over time, more recipients did go to work. Neighborhood conditions also generally got better. However, most recipients still remained poor, and those who worked were usually in low-wage jobs without benefits.
While welfare caseloads declined significantly both in Los Angeles and nationwide, a higher proportion of people remained on welfare in Los Angeles than in the other three Urban Change counties, and fewer left welfare for work. Policies that allowed welfare recipients to stay on the rolls with fairly high earnings also increased people’s connection to support services, and — perhaps as a result — household incomes were higher than in the other sites. Contrary to national trends during the 1990s, however, the concentration of poverty increased in Los Angeles, likely driven by an influx of poor immigrant families into particular neighborhoods.
Analyses of trends before and after the new welfare law took effect are mixed in Los Angeles. They suggest that state and county policies encouraged people to leave the rolls and discouraged people from coming onto the rolls but that they also increased the likelihood that former recipients would return to the rolls. Although welfare recipients were more likely to work over time, the trends do not suggest that this was because of the county’s efforts. Instead, the burgeoning economy was probably an important force behind improving conditions.
Overall, the Urban Change project suggests that neither the fears of welfare reform’s critics nor the hopes of its supporters appear to have been realized. There is no evidence that welfare reform caused widespread hardship, but families were not substantially better off financially even though many parents went to work. Looking ahead, the central challenge facing welfare policymakers is how to devise strategies to help low-wage workers acquire the skills needed to advance and how to support low-wage workers, perhaps by helping families use such work supports as food stamps, Medicaid, child care subsidies, and the Earned Income Credit — in effect, building a safety net around work and earnings.