Poorest miss out on benefits, experience more material hardship, since 1996 welfare reform

Although the federal government's 1996 reform of welfare brought some improvements for the nation's poor, it also may have made extremely poor Americans worse off, new research shows.

The reforms radically changed cash assistance—what most Americans think of as 'welfare'— by imposing lifetime limits on the receipt of aid and requiring recipients to work. About the same time, major social policy reforms during the 1990s raised the benefits of work for low-income families.

In the wake of these changes, millions of previous welfare recipients, largely single mothers, entered the workforce. At the same time, welfare has become more difficult to obtain for families at the very bottom, who often have multiple barriers to work. As a result, in the new welfare system, the working poor may be doing better while the deeply poor are doing worse.