Social Policy and the Macro-Economy: What Drives Welfare Caseloads in the US?

In: Social policy and society: SPS ; a journal of the Social Policy Association, Band 2, Heft 2, S. 133-142

Abstract

This article sifts the evidence to explain why welfare caseloads have fallen so markedly in the US since 1993. In particular, it seeks to explain the discrepancy between studies that identify welfare reform as the principal explanatory factor and those that emphasise the buoyant economy. Analyses that prioritise welfare are shown to be mis-specified while a comparative analysis of all 51 states shows a strong link between welfare trends and macroeconomic performance. The expansion of Earned Income Tax Credit has also contributed to the fall in welfare caseloads.