The True Cost of Welfare Reform

Following the alleged success of welfare reform in the 1990s, policy makers have repeatedly attempted to introduce work requirements and time limits into other social programs. The most recent efforts this year revolve around the Supplemental Nutrition Assistance Program (SNAP), formerly known as food stamps. In a recent study, researchers at Columbia University’s Mailman School of Public Health and the Wallace Foundation recently provided some evidence that these types of restrictions should not be considered lightly as they could have unintended consequences on participants’ health.

Published in Health Affairs, Peter Muennig, Zohn Rosen, and Elizabeth Ty Wilde discuss their analysis of one of the many randomized experiments that took place in the years preceding and during the transition between Aid to Families with Dependent Children (AFDC) and the Temporary Assistance for Needy Families (TANF) Program. This transition changed cash assistance from a federal entitlement program to a block grant in which states receive funding and are able to design programs within certain limitations. The new cash assistance rules included a greater emphasis on work participation and reducing dependency. Specifically, the authors focus their attention on Escambia County and Florida’s Family Transition Program (FTP), where families were randomly assigned to the traditional AFDC or the new FTP. Under the new FTP program, families had time limits of either 24 or 36 months on cash assistance during any 60 or 72 month period, respectively. In addition, FTP enrollees participated in employment services including training and job placement.

To study the health effects of the program changes, the researchers link the data from the experiment with the 2011 Social Security Administration Death Master File in order to identify the number of participants who died in the given year. The researchers then control for variables such as birth year and site location before estimating the average number of life-years the experimental group lost as compared with families in the traditional AFDC program. They find that participants in the experimental group had a 16 percent higher mortality rate than those in the control, or in other words, a loss of nine months of life expectancy between the ages of 30 and 70.

Despite these significant results, the researchers acknowledge that the study has limitations, the first being its ability to relate to welfare reform as a whole. To mitigate this concern, they note that they find similar results to studies on other randomized experiments in terms of employment outcomes. Furthermore, the data is limited and prevents the researchers from unambiguously identifying the driver of increased mortality—psychological stress, employment, or a combination of additional variables.

Limitations aside, the study is an addition to the growing literature on health impacts of social programs that are not directly aimed at improving one’s health. Like research on the Earned Income Tax Credit (EITC) and its positive impact on child health outcomes, this negative association between work participation requirements, time limits, and mortality suggests that policy makers need to examine a much wider range of costs and benefits when weighing a policy change like this one.

Feature Photo: cc/(Allan Foster)