The role of the economy and welfare policies in shaping welfare caseloads: The California experience

This longitudinal study analyzes the effect of labor market conditions and welfare policies accompanying the 1990s waivers granted by the federal government and Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (P.L. 104-193) on California's welfare caseload. A monthly semilogarithmic rate model is constructed for analyzing and predicting the single-parent welfare caseload from January 1983 to December 1998. The idea underlying this model is that during the study period month-to-month changes in the fraction of the female population ages 15 to 44 who headed a single-parent family and who received welfare were in response to changes in welfare policies and other programmatic and economic factors. The findings suggest that the role of welfare policies in shaping the caseload was modest, whereas the role of the economy was substantial.