Incentives, Challenges, and Dilemmas of TANF: A Case Study

Autor/in	Wolfe, Barbara L.
Titel	Incentives, Challenges, and Dilemmas of TANF: A Case Study
Quelle	In: Journal of Policy Analysis and Management, 21 (2002) 4, S.577-586 (10 Seiten) PDF als Volltext Verfügbarkeit
Sprache	englisch
Dokumenttyp	gedruckt; online; Zeitschriftenaufsatz
ISSN	0276-8739
DOI	10.1002/pam.10074
Schlagwörter	Dependents; Tax Rates; Child Care; Welfare Recipients; Welfare Services; Incentive Grants; Policy Analysis; Cost Effectiveness; Comparative Analysis; Economic Impact; Systems Analysis; Case Studies + Suchen Sie Ihr Suchwort? Familienangehöriger; Steuergruppe; Kinderfürsorge; Kinderbetreuung; Sozialhilfeempfänger; Sozialhilfeempfängerin; Fürsorgeeinrichtung; Finanzieller Anreiz; Politikfeldanalyse; Kosten-Nutzen-Analyse; Kosten-Nutzen-Denken; Ökonomische Determinanten; System analysis; Systemanalyse; Case study; Fallstudie; Case Study
Abstract	This paper compares the incentives inherent in TANF (Temporary Assistance for Needy Families), the U.S. welfare system in place after the 1996 reforms, with those of TANF's predecessor, AFDC (Aid to Families with Dependent Children), using the experience in one state, Wisconsin, as an example. Is the new program successful in avoiding the "poverty trap" of the old welfare system, in which the marginal tax rates imposed on earnings and benefits were so high that they discouraged work effort outside a narrow earnings range? As women receiving assistance begin working more hours and earning more, income-conditioned benefits (Food Stamps, EITC, Medicaid, and subsidies for child care) are reduced and withdrawn, in effect constituting a "tax" on earnings. Under TANF, there is more support for these families, at least in Wisconsin, and so economic well-being should be higher for most women with earning in this range than it was under AFDC. But marginal tax rates under TANF remain high, and in some income ranges they are higher than under AFDC. Once in the work force, former TANF recipients have earnings over the long run that expose them to very high marginal tax rates, which decrease the benefits of working harder and make it very difficult to gain full economic independence. Evidence from other sources suggests that most low-skilled women have earnings in the same range and so are likely to face similar reductions in benefits such as child care subsidies or the EITC as their earnings increase, even if they are not receiving welfare-related benefits. (Contains 2 figures and 13 footnotes.) (Author).
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Erfasst von	ERIC (Education Resources Information Center), Washington, DC
Update	2017/4/10