Purpose: Most of the previous studies having evaluated the effects of welfare reform on program participation estimated a kind of static model. Although several studies have estimated a duration model, their inquiry was limited to average effects of waivers. The objective of this paper is to evaluate the effects of TANF as well as waivers on welfare participation transitions and to investigate heterogeneous effects of welfare reform among subgroups through a duration model.

Methods: This paper uses the SIPP 90-96 panel data, which cover the period from 1990 to the early 2000, to evaluate the effects of both waiver and TANF on welfare participation transitions. Specifically, I compared non-parametric Kaplan-Meier hazard functions of AFDC/TANF transitions between the early and late 1990s to examine any difference of the transitions before and after welfare reform. I also estimated discrete time hazard models with logit specification to estimate the net effects of welfare reform on the transitions.

Results: I found that TANF implementation increased the exit rates from AFDC/TANF but did not have statistically significant effects on the entry rates to AFDC/TANF. No significant waiver effects were found. The subgroup analyses revealed that welfare reform increased the exit rates among not only the disadvantaged but also the better off but reduced the entry rates only among those who have at least some earning capacities.

Implications for policy: These results suggest that TANF has been successful in making welfare recipients exit from welfare but unsuccessful in keeping welfare leavers, especially less educated single mothers, off of welfare. More policy efforts are needed to support less educated welfare leavers to stay off welfare roll.