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The Effect of Specific Welfare Policies on Poverty |
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Policies that can Reduce Poverty Many political leaders pointed to poverty rate declines along with increases in employment and falling welfare caseloads that occurred in the late 1990s as evidence that the 1996 federal welfare reform had been a success (Kaus 2001). While trends in poverty and deep poverty generated discussion and speculation about the effect of welfare reform on poverty and deep poverty, there is limited and mixed information on welfare reform's effect on these outcomes. Moreover, the literature provides no guidance on how specific welfare reform policies affect poverty and deep poverty. This paper contributes to the literature by examining the effects of a rich and comprehensive set of specific welfare policies on poverty and deep poverty among women and children. We capture objective and detailed measures of states' policies by measuring policies individually, and in continuous values such as dollars, wherever possible. Overall, we find evidence that more lenient eligibility requirements for welfare receipt and more generous financial incentives to work generally reduce deep poverty, as hypothesized. We also find evidence that eligibility requirements for welfare receipt and financial incentives to work affect poverty.
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