Income Distribution Commons^™

Was There A ‘Race To The Bottom’ After Welfare Reform?, Sarah K. Burns

University of Kentucky Center for Poverty Research Discussion Paper Series

Leading up to the passage of the 1996 welfare reform, there was much speculation and debate over the possibility that states would "race to the bottom" in setting welfare generosity if given more control over their individual programs. In the fifteen years after welfare reform, did such a race to the bottom ensue? Using a spatial dynamic econometric approach I investigate welfare competition across multiple policy instruments and across three distinct welfare periods - the AFDC regime, the experimental waiver period leading up to the reform, and the TANF era. Results suggest strategic policy setting occurs over multiple dimensions of …