Tough love works

A decade ago, Americans began a bold social experiment. In August 1996, Bill Clinton signed into law the bill that introduced “welfare to work”. From that point, poor families could no longer claim welfare indefinitely as an entitlement. Instead, parents had to find a job.

The reform, controversial enough in America, was reviled in many parts of Europe. Its opponents said that welfare claimants, most of them single mothers, would be unable to find work. They and their families, it was argued, were being condemned to destitution.

Ten years on, such dire warnings have been proved spectacularly wrong (see article). America's welfare rolls have fallen by over half as existing claimants have found work and fewer people have gone on benefit in the first place. A strong economy, generating plenty of jobs, has undoubtedly helped; but the main reason for the steep decline in caseloads is the reform itself. Furthermore, there has been no upsurge in the poverty rate; in fact, it has fallen over the period. Most of the jobs taken by former claimants are poorly paid, but in general they are doing somewhat better than when they were on welfare.

Welfare to work | Tough love works | Economist.com