Workfare and the Great Recession: Socioeconomic Outcomes among Black, White, and Hispanic Mothers in the Era of Work-First Welfare

With the introduction of welfare reform in 1996 – the culmination of Bill Clinton's campaign promise to 'end welfare as we know it' – means-tested cash assistance became conditional upon participation in the labor market. The current welfare program Temporary Assistance to Needy Families (TANF) is dependent on recipients being able to find work, typically in the low-wage service sector. In addition, this reform handed the states considerable autonomy in TANF's implementation and administration. The literature, citing increased caseworker discretion and state-level policies, has also shown substantial evidence of favorable treatment toward white recipients (e.g. less sanctioning) compared with that of blacks and Hispanics. Using the National Longitudinal Survey of Youth-1997 cohort, this study examines the impact of TANF before and during the Great Recession of 2008 by comparing socioeconomic outcomes among TANF recipients and similarly situated 'non-entrants' with an added focus on racial disparities in these outcome measures. Also, the role of state-level policy context is explored by assessing employment, income, and healthcare coverage outcomes among white, black, and Hispanic recipients living in states whose TANF policies are comparatively strict. Main findings include a significantly negative relationship between TANF participation and socioeconomic outcomes when controlling for relevant factors. No evidence was found, however, linking state TANF policy strictness with decreased socioeconomic outcomes among program participants.