Why Did Welfare Caseloads Collapse? The Mystery of Diversion
About This Event

The welfare reform of the 1990s was an unusual success for American social policy. By requiring more welfare mothers to work, reformers aimed to move them into jobs and reduce welfare rolls. Unexpectedly, reform was accompanied by a greater decline of caseloads--over 60 percent--that had previously been anticipated by research. Listen to Audio

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The fall was not caused only by more welfare mothers going to work. Other single mothers took jobs directly and bypassed welfare entirely--a phenomenon known as diversion. No one has explained these effects. They are important because they suggest that antipoverty measures could also have systemic impacts in other areas, such as the problems of low-income men, that are now getting attention.

At this conference, leading field researchers who observed welfare reform first-hand will offer their own explanations and address the questions: What forces generated diversion and thus transformed welfare? And what does this imply for future social policy?

8:30 a.m.
Registration and Breakfast
Lawrence M. Mead, AEI and New York University
Panel I:
Field Researchers
Tom Gais, Rockefeller Institute of Government
Pamela Holcomb, Columbia Pike Revitalization Organization
Irene Lurie, Rockefeller Institute of Government
Karin Martinson, Urban Institute
Ron Haskins, Brookings Institution
Panel II:
Dan Bloom, MDRC
Demetra Nightingale, Urban Institute and Johns Hopkins University
LaDonna Pavetti, Mathematica
Douglas J. Besharov, AEI and University of Maryland
Panel III:
State Studies
Stephen Camp-Landis, New York University
Jason DeParle, New York Times
Lawrence M. Mead, AEI and New York University
Sheila Zedlewski, Urban Institute
12:30 p.m.
Event Summary

From Welfare to Work: Lessons of Welfare Reform for Low-Income Men's Programs

WASHINGTON, NOVEMBER 20, 2008--The welfare reform of the 1990s was an unusual success for American social policy--cutting caseloads by over 60 percent. These effects were due in large part to a little-examined phenomenon called diversion. "By diversion, we mean the tendency of many welfare mothers to leave welfare before they were told to do so--or to avoid welfare entirely by going directly to work," Lawrence M. Mead, a visiting scholar at the American Enterprise Institute and professor of politics at New York University, explained at a recent AEI event.

Welfare reform's "help but hassle" approach--which included time limits for benefits, work requirements, and new services designed to support work--led to dramatic caseload reductions. "In fact, the caseload fall was much greater than anyone had anticipated, even the proponents of reform," Mead said. Experimental studies prior to reform predicted incremental changes in caseloads, but nothing like the actual outcome. What happened? 

Social expectations deeply affected the behavior of welfare mothers by motivating them to seek work. Mead explained that instead of focusing on the economic barriers to employment for poor families, "if one asks what families can do to work before they get aid, then suddenly many fewer of them had to be on welfare." This cultural factor cannot be underestimated. Demetra Nightingale, a researcher at the Urban Institute and professor at Johns Hopkins University, explained that caseloads declined dramatically even in states that moved less aggressively to reform welfare. It is apparent that social expectations fostered a culture that in turn supported employment.

Work programs also diverted welfare mothers. Karin Martinson of the Urban Institute explained that the establishment of work programs was the only part of reform that was "pervasive across the states." While increased job availability was due in part to the economic boom of the late 1990s, more services became available to help welfare mothers find jobs, which led many of them to leave the rolls even before their benefits were to expire. Increased job availability also motivated some women to bypass the welfare system entirely and find a job.

Welfare implementation also created institutional changes that contributed to diversion. As Tom Gais of the Rockefeller Institute of Government noted, welfare reform did not transform welfare agencies but instead added new agencies specializing in work placement. Gais explained that complex, up-front processes can contribute to diversion in two ways: if these programs work, they send people to work quickly; if not, there are "neighborhood effects" and people avoid them and find work on their own.

Although welfare reform has been lauded as a success for social policy, diversion effects had some negative implications for diverted mothers. As LaDonna Pavetti of Mathematica explained, employment rates for diverted mothers varied across states, an indication that some diverted mothers did not join the labor force. Diverted mothers also saw the highest rates of deep poverty of any population group, particularly with respect to securing housing and food. These effects indicate that, as Mead noted, future reforms could require that diverted individuals interact more with the government--even after they have found employment.

The lessons learned from diversion are important because they suggest that antipoverty measures could also have systemic impacts in other areas, such as the problems of low-income men, a subject on which Mead is working at AEI. First, politics and administration were crucial to driving the work message home. Second, according to Gais, "it is probably very good to focus on an overarching and well-accepted goal and not jumble it up with a lot of other things you'd like to see from your policy reforms . . . and it's probably good not to reengineer state and local agencies." It is also important to provide flexibility for reforms. "These programs weren't constrained by having to stick with bad ideas," Gais explained. Instead, they could "jettison bad ideas and try out new ones." Finally, cultural and social expectations are important and must be championed by political leaders. Behavioral change from targeted populations requires leadership, and that leadership, according to Nightingale, must come from the "highest political level."


For video, audio, and more information about this event, visit www.aei.org/event1821/. For more information about Mead's research and other emerging scholarship at AEI, visit the National Research Initiative's site at www.aei.org/NRI/.

For media inquiries, contact Véronique Rodman at [email protected] or 202.862.4870.


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