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Rural Welfare Reform: What Have We Learned?

Image for Amber Waves finding  "Rural Welfare Reform: What Have We Learned?"

Since passage of the Personal Responsibility and Work Opportunity Reconciliation Act (PRWORA) of 1996, welfare and food stamp caseloads have declined substantially, employment and earnings of single mothers have increased, and poverty rates of single mothers have fallen. Despite the high marks, there are signs that not all areas of the country are benefiting equally from the legislation.

Specifically, rural outcomes of welfare reform may be different from urban outcomes. Employment in rural areas is more concentrated in low-wage industries, unemployment and underemployment are greater, poverty rates are higher, rural residents have less formal education, and work support services, such as paid child care and public transportation, are less available. These barriers suggest that welfare reform may be less successful in moving rural low-income adults into the workforce, off of welfare, and out of poverty.

According to results from national studies, welfare reform outcomes did not differ greatly between rural and urban areas. However, when national-level findings are disaggregated by State and by rural and urban areas within States, a less positive picture emerges. Several studies of individual State welfare programs have shown consistently smaller changes in welfare caseloads, employment, earnings, and poverty in rural areas than in urban areas. In Minnesota, for example, improvements in the employment and earnings of welfare recipients due to welfare reform were smaller in rural areas than in urban areas, and were not as lasting. The smaller effects in rural areas result from differences between State programs in terms of how eligibility, benefits, and work requirements are determined, as well as rural-urban differences in job opportunities, availability of critical work supports, and characteristics of welfare recipients. As seen in county-level studies, the poorest and most remote rural areas experienced fewer successes in reducing poverty and moving former welfare recipients into the workforce on a lasting basis. For example, 360 nonmetro (or rural) counties have had poverty rates of at least 20 percent in every decade since 1960. These areas have a disproportionate number of economically vulnerable residents and have weaker local economies than other rural places, making successful welfare reform more difficult to achieve.

As Congress considers reauthorization of PRWORA, the policy debate will focus on many critical issues, such as funding levels, time limits and sanctions, child care, and the adequacy of provisions for future economic downturns. Study results on welfare outcomes provide a strong empirical base to better comprehend the importance of rural and urban diversity in welfare policy design.

This article is drawn from...

Issues in Food Assistance—Reforming Welfare: What Does It Mean for Rural Areas?, by Leslie Whitener, Bruce Weber, and Greg Duncan, USDA, Economic Research Service, June 2002