Work and Welfare: Lessons on Employment Programs

Abstract

The nation's social welfare policy reflects an ongoing effort to balance sometimes competing objectives—alleviating poverty and promoting self-sufficiency—in a manner consistent with underlying public values about the primacy of the family and the importance of work. Concern has been growing that the welfare system has not been doing this very well, and welfare reform once again moved towards the top of the policy agenda, resulting in passage of the Family Support Act of 1988 (FSA). This paper discusses what economists know about the potential of one central component of the new legislation: the effort to transform welfare from a means-tested entitlement into a reciprocal obligation, in which getting a welfare check would carry with it a requirement to look for and accept a job, or to participate in activities that prepare people for work. It sets the context for this discussion by briefly outlining why this approach to reform gained support and by summarizing major policy and program alternatives.