New Jersey's Surprisingly Successful Welfare Reform 

by Ted Goertzel, Rutgers University, Camden NJ 08102

and Gary Young, Cooper Hospital, Camden NJ 08102


- longer version of a paper published in The Public Interest, fall 1996 -


The welfare reform passed by the New Jersey legislature in January, 1992, has been surprisingly successful in lowering birth rates and cutting welfare dependency in New Jersey's poorest cities. For a time, this success was obscured by the misinterpretation of incomplete findings from a research design which missed the real changes. Complete data from two independent and reliable sources now show that the reform was effective. The mechanisms of that success, however, were different than anyone anticipated.

The New Jersey reform was been controversial because of the so-called "family cap" provision which denies an additional cash benefit to women who conceive an additional child while receiving AFDC benefits. Welfare advocates waged a crusade against this provision, denouncing the "myth" that welfare recipients have additional children to receive increases in their benefits. They fought, and lost, a bitter political and legal struggle with then New Jersey Assemblyman (now Senator) Wayne Bryant, the initiator and chief proponent of the reform.

Wayne Bryant, an African-American and a liberal democrat representing the state's most welfare-dependent city, Camden, wanted the "family cap" provision to send a message to welfare recipients that welfare must be temporary, not a way of life. He took steps to ensure that word of this change would spread quickly through the inner city communities, in the hope that it would encourage welfare mothers to take advantage of other features of the welfare reform which were designed to strengthen families and facilitate their entry into mainstream society.

Today, definitive data show that births to welfare mothers and welfare caseloads have declined significantly. State officials have detected no increase in abortions or in reports of suffering by poor children. Significant numbers of welfare mothers are going to college, an option not available under the previous policy.

Confusing Early Research Findings. Much of the confusion about the New Jersey reform was due to reliance on data from an experimental research project which was required by the federal government as part of the waiver process which allowed New Jersey to change its AFDC rules. The experiment was rigorous and scientific in form and intent, but it was unable to capture the changes the New Jersey reform actually caused. A group of women were exempted from the provisions of the new law. This group, which was labeled the "control group," was contrasted to an "experimental group" which followed the same rules as all other New Jersey recipients.

Results of this experiment were eagerly anticipated as a test of whether or not the "family cap" worked. In response to Congressional requests, an early report was prepared by June O'Neill, then a professor at the City University of New York, which found a slightly lower birth rate in the "experimental group" than in the "control group". A later report, by Michael Camasso, a professor of social work at Rutgers University in New Brunswick, found no statistically significant difference between the two groups.

Data from the experiment conflicted with the monthly records kept by the New Jersey Division of Family Development which showed that birth rates and case loads were dropping. Supporters of the New Jersey reform used these data to argue that the reform had been a success. Opponents insisted that, even though birth rates had gone down, the reform had not "really" been successful because there was little difference between the "experimental" and the "control" groups. Each side to the debate selected the data which supported its point of view, while discounting the data that did not. As one New Jersey official observed, "Some are yelling, `Hooray, it works' and some are yelling `Hooray, it doesn't work.' Please recognize that it is too soon to recognize a trend."

While opponents of the reform focused their attention on the lack of a statistically significant difference between the "experimental" and "control" groups, supporters observed that, in both the O'Neill and the Camasso studies, birth rates went down sharply in both the "experimental" and the "control" groups (Figure 1). There was also a much smaller decline in births among the general population of New Jersey welfare mothers. The decline in both the "experimental" and "control" groups may due to the well-known "Hawthorne effect" in which participants in an experiment change their behavior simply because they know researchers are watching them. Or it may be because births are more common among women who have recently gone on welfare, and none of these women were included in the "experimental" or "control" groups in the second year.

Regardless of the reasons, however, the fact that both "experimental" and "control" groups differed shaprly from the rest of the welfare population highlights the fact that an experimental design is inherently flawed as a technique for evaluating broad cultural changes. It is impossible to isolate members of the "control group" from the effects of these changes. The very fact that they are part of an "experiment" communicates uncertainty about the future of the welfare system, and may cause them to be more cautious in their reproductive behavior.

Also, welfare policy is concerned with a population which is continuously changing because of the monthly influx of new recipients and exit of old ones. Unless a new experiment is begun each month, an experimental study cannot fully account for changes in the composition of the client population. As it turns out, unanticipated changes in the influx of new recipients was the most powerful outcome of the New Jersey reform.

Nor is waiting for more data from the experiment an answer. Conditions have already changed in ways which make the "family cap" much less important. New Jersey Governor Christine Whitman has proposed a strict five-year lifetime limit on AFDC benefits, a policy which will overwhelm the effects of the "family cap" on long-term welfare mothers. President Clinton and the Republican Congress are promising to enact similar measures. Although time limits have not yet been implemented in New Jersey, the fact that this and other harsh measures are being seriously discussed on both the state and federal levels has already changed the expectations of women in inner city communities.

Misconceptions of the New Jersey Reform. Even if the New Jersey "experiment" could be carried through to a pristine conclusion in an unchanged political environment, however, its results would not be definitive because it is based on a misconception of the New Jersey reform. Opponents insist on treating the New Jersey reform as if it were an experiment designed to test the emotionally charged hypothesis that women have babies just to get an additional $64 a month in welfare benefits. They vehemently protest that this is not the case and, of course, they are right. Childbearing motivations are complex, and the availability of financial support is only one of the factors involved.

The experiment was designed to shoot down the "straw man" hypothesis that women have babies just to get the extra benefits. Wayne Bryant and the New Jersey legislature, however, never intended to test such a flawed hypothesis. The "family cap" was part of a comprehensive package of reforms intended to change the culture of inner-city communities. The new rules required recipients to meet with social workers to formulate a "family plan" to improve their situation through education, work experience or marriage. Rules were changed to encourage two-parent families, and additional educational and child care resources were offered. Bryant also insisted on including the provision which opponents labeled the "family cap" although it does not actually limit the number of children that can be covered on an AFDC grant. Any number of children can be covered, so long as they were not conceived while the mother was on welfare.

Bryant persuaded the New Jersey legislature, and then Governor James Florio, to pass his plan as an integrated whole. The legislature agreed to the "family cap" because Wayne Bryant assured them it was part of a positive program to help poor families, not because they wanted to punish poor women and children.

In their unsuccessful federal court challenge to the policy, liberal advocacy groups argued, among other things, that the welfare reform was an "experiment" and that federal law protecting the rights of "human subjects" in research projects should be applied. This meant, in their view, that women should not have to comply with the new law unless they wanted to.

The court was convinced that the New Jersey reform was not a research project in the sense that the law intended, even though federal regulations did require that it be evaluated. Federal law exempts evaluations of social programs from regulations governing laboratory experiments, otherwise it would be impossible to collect data about the impact of policy changes. In one sense of the term, all laws passed by state and federal legislatures are "experiments," but this does not mean that citizens can choose not to comply with them until they have passed some kind of statistical test.

Data Demonstrating the New Jersey Success. There are two good data sets are available to measure the impact of the New Jersey reform. The first is the monthly records collected by the New Jersey Division of Family Development. These records show the trends in caseloads, new AFDC applications, and births to welfare mothers. The second data source is the billing records maintained by all New Jersey hospitals. These records identify AFDC recipients through their medicare numbers. The hospital records are not dependent on mothers reporting new births to their case workers, which some may not do in a mistaken belief that they would receive no benefits for the new baby (actually they receive food stamps and medicare coverage for a new baby, even if conceived on welfare). Since very few AFDC recipients have their babies at home or in out-of-state hospitals, the hospital data provide the most definitive information on births to New Jersey welfare mothers.

The data from the Division of Family Development show that births to welfare mothers have been lower in the two years since the implementation of the "family cap" than in the years before. The data also show that the total caseload has declined slowly since the reform, while the number of births has declined somewhat more rapidly. The average monthly birth rate was 10.95 per 1,000 cases for the year before the reform took effect. It was 9.68 in the first year after the reform and 9.46 in the second year. The total caseload was 122,563 when the reform began in August 1993, and was down to 114,794 by February of 1996.

The decline in AFDC births in New Jersey since 1992 can be confirmed with the hospital data set. Births to AFDC mothers dropped statewide from 18,267 in 1992 to 17,530 in 1994-- a 4% decline. This is twice the rate of decline which occurred among all women for the State of New Jersey from 1992 to 1994; total births in New Jersey hospitals dropped by 1.98% from 85,083 to 83,393. Prior to public discussion of the welfare cap reform, in 1991, AFDC births statewide had seen an increase (4.9% from 1991 to 1992) while the total number of births statewide was decreasing (a decline of 1.3% during the same period).

A more important test is the hospital data for New Jersey's inner-city communities. The New Jersey reform targeted these communities in particular, where welfare dependency has become a way of life for a large percentage of the population. For this analysis, we selected the 10 cities with at least twice the state rate of children receiving AFDC benefits. (1) In these cities, an average of 44.3 percent of the children are on AFDC. Among this subset of cities, births to AFDC mothers declined by 8.5% from 1992 to 1994.

The most powerful evidence of the success of the New Jersey reform is in the cities of Newark and Camden. In Newark, the largest among the cities selected for analysis, 51.9 percent of the children receive AFDC benefits. Newark witnessed a 10.4% decline in births to AFDC mothers from 1992 to 1994. In Camden, the most welfare dependent city in New Jersey, 65.1 percent of the children receive AFDC benefits. Here births to AFDC mothers declined by 21.2% between 1992 and 1994. By comparison, the impact of the welfare reform has been smaller in parts of the state where the welfare culture is generally less pervasive.



Figure 2

Skeptics may suspect that the decline in births in the poor cities has been due to some factor other than the welfare reform. The fact that births went down in both the experimental and control groups in the experimental study reinforces this skepticism. The closest we can come to replicating this finding with our data is to compare births among AFDC and non-AFDC mothers in similar populations. Figure 5 shows this comparison for the cities of Newark and Camden, cities where most mothers are impoverished and many women cycle on and off the welfare system. In both cities, there has been a decline in both AFDC and non-AFDC births, but the decline in AFDC births has been significantly larger. In Camden, the comparison group is smaller since most births in Camden are to AFDC mothers. Camden is Wayne Bryant's home district and the community in which the welfare reform's provisions have been most vigorously applied by county officials. Again, these findings show that the reform has been successful precisely in the communities it was intended to impact.

This decline in inner city births, to both AFDC and non-AFDC mothers, is an important social change. From the point of view of those New Jersey legislators who thought it a wise social policy to discourage women from conceiving children they and their partners could not support, the reform has been a success. This success cannot be attributed to the "family cap" provision alone, but rather to the impact of the reform as a whole.

How the New Jersey Reform Succeeded. Understanding why and how the reform succeeded requires more detailed analysis. In addition to the data on births, the N.J. Division of Family Development has data on caseloads, on the number of children covered by AFDC, and on the number of new applications each month. The caseload data shows that the number of children covered by AFDC has declined when compared to the total number of cases (Figure 6). The decline has been especially sharp in Camden and in Newark. This means that there are fewer children on AFDC, when compared to the number of adults.


Figure 3

The most striking change, however, is in the number of new AFDC cases approved each month. As Figure 6 shows, there was a very sharp decline in approved applications in january of 1992. This decline was unexpected by state officials, and was just as abrupt in Camden and in Newark as it was in the state as a whole. The decline in the data was so sharp that we suspected it might be due to an administrative change or an error in record keeping. However, state officials have assured us that no such change took place and that the data are based on the actual number of checks issued which is their most reliable statistic.

One explanation for the abrupt change suggests itself. January, 1992, is the month when the New Jersey reform was passed by the legislature, and signed by Governor James Florio. The plan did not take effect legally until october of 1992, and even then there was a ten month grace period for the "family cap" provision, so the first babies whose families were effected by that provision were not born until august of 1993.

The only plausible cause of this abrupt decline in new applications for AFDC, then, would seem to be the publicity about the plan, not its implementation or its financial impact on recipients. In october, 1991, Wayne Bryant chaired public hearings in inner-city communities throughout the state, where welfare advocates vehemently denounced the "family cap" provision. A representative of the National Organization for Women denounced the reform as "an impermissible attempt to intrude on the private lifestyle choices of poor women." Ironically, this attack on the reform by welfare advocates may have had an unanticipated consequence of discouraging women from applying for the very benefits the advocates were trying to protect. Many women, especially in inner city communities, overestimated the punitive nature of the plan. They may also have anticipated that getting on welfare would be more difficult or that case workers would be more intrusive into their affairs.

An alternative explanation for this abrupt decline in new AFDC applications might be a sudden improvement in the economy. However, a check of unemployment data shows that unemployment was still rising in January of 1992 and did not turn down until several months after that.

Qualitative Data. The Graduate Department of Public Administration at Rutgers University in Camden has been doing interviews with Camden mothers - on and off welfare - since before the reform was implemented in 1992. We followed a panel of 118 women, half of whom were on welfare, for three years. We have also done two dozen focus groups with various segments of the population including adolescents of both sexes, Hispanic women interviewed in spanish, men and women in homeless shelters, welfare recipients in a drug rehabilitation program, and many groups of welfare mothers who are successfully raising their families in a difficult environment. The focus group participants know the Camden community well, and they tell us about the women who are on drugs and neglect their children but are difficult to interview.

A number of conclusions can be drawn from this qualitative research which help us to understand the statistical data:

* First of all, no mother lives on her welfare benefits alone. All have other sources of income, otherwise they cannot survive. The social workers, some of whom who we also interviewed in a focus group, all know this very well. As one woman commented: "We go on welfare because we need the assistance. The government knows the money we get is not enough to live. They force us to lie because to live we must find other ways of supplementing our income. We are forced to lie about a husband or boyfriend who helps with the expenses."

* The "family cap" never comes up in our discussions until we bring it up, it is simply not a major issue because it isn't all that much money. As one woman said, "if it's only $64, how bad can it be?" The women are much more concerned about the "Family First" cards they now use to buy food, instead of food stamps. They were accustomed to selling the stamps for cash, as they have more than they need for food. The biggest financial problem, mentioned by women in group after group, is finding enough money for Pampers.

* The women feel a great deal of humiliation in dealing with the case workers, who seem to look down on them and ask too many intrusive questions. For some, the Family Development Plan has increased this intrusiveness, with case workers demanding that they prepare a "family plan" and take steps to train for jobs. Many women are already working full time "off the books," as well as caring for their children, and simply do not have time to enroll in a training program to get welfare benefits.

* The women view their welfare grant as a right, not a privilege. They are indignant at the idea that anyone would take it away from them, and feel that they deserve a raise whenever legislators or government workers get one. If asked, they all say they would like to work, but only when their children are old enough and then only if the job pays better than welfare, is close to home and they can get off work easily if a child is sick. They are proud of their accomplishments as mothers, and feel that the government should support them in this role.

* Respondents sometimes misunderstand and exaggerate the punitive nature of welfare reform. Many misunderstand the "family cap" as allowing only two children. One respondent, for example, said "They gonna try to cut welfare off, try to get people working, you can't have more than two children and receive welfare." Another remarked, "you should use your head because the system is not going to always be there for you."

* Many others, however, insisted that the "family cap" would not effect their own choices. One, for example, said, "what difference will that make if you don't get additional money for the child.. I have a big family and I have a lot of help unlike some of these women... I don't have any bills, I live with my grandparents." Others reported that they were not thinking about pregnancy when they conceived their child, e.g., "I did not plan my pregnancy, I was free wheelin, this one here [pointing to her child] I didn't plan, I was on drugs and I wasn't thinking about nothing, I was thinking about getting high..." Another thought that, "people don't really think about having babies." But another objected that, "a lot of them [teenagers today] are having babies to get welfare."

* The women are often unclear about their own childbearing motivations. One woman, seeming genuinely puzzled, threw out the question in a focus group, "why do we have so many children?" Another responded that, "I think the first two children were the only ones I really wanted." She had had fourteen children, all on public assistance, and stated that she hadn't really wanted the last twelve. Even in this case, it did not seem that she had had the children just to get the benefits, but rather that the availability of benefits reinforced her inclination to let nature take its course.

* The women feel that if the government wants them to work, it is the government's responsibility to find them well paying jobs and to provide child care. No one is interested in working for minimum wage, which they refer to as "five-oh-five an hour," although they acknowledge that such jobs are easy to get. When asked what they would do if welfare was cut off, most say they could find work. One said, "I would need a month to find work," another said, "I would go back to wiping people's butts," referring to a previous job caring for elderly people in a nursing home.

* For some, the New Jersey welfare reform is used as a scholarship program to go to college. At a public hearing held recently in Camden, one woman proudly told the legislators present that she had left a $13 an hour job at a Philadelphia hospital to go on New Jersey welfare so she could go to community college and better herself. Her welfare paid only $350 a month, plus food stamps, but it also covered tuition and child care. Of course, these students either have unreported help from their families or work off the books to make ends meet.

Conclusions. The New Jersey welfare reform has been successful in accomplishing the very important social goals of reducing welfare dependency and births to unmarried mothers in poor communities. This success has been due to a change in expectations in the inner city communities. Women are no longer certain that AFDC will be there to support them throughout their child rearing years. This uncertainty impacts on their child bearing and vocational decision-making.

This change cannot be attributed to any single provision of the New Jersey reform. A number of changes took place at the same time and cumulatively they made a difference. The New Jersey reform came at a time when the national media was full of talk about welfare reform, which contributed to the women's uncertainty about the welfare system. Vehement opposition by welfare advocates contributed to this feeling of uncertainty, and helped to make the reform more effective. The case workers became more demanding, insisting that women prepare "family plans," take placement tests, and apply for training programs. This appealed to women who wanted to go to community college, but discouraged those who were already working off the books.

In a different historical context, the same provisions might have had less impact. Changes in the welfare system in the future, such as strict time limits, are likely to undercut the incentives and disincentives of the Bryant reform. The current Republican New Jersey administration is seeking to move women into jobs quickly instead of supporting them in long term educational programs. This is counter to Wayne Bryant's more generous aspirations to help women move into middle class careers. Our focus group discussions suggest that Bryant's approach is better for some of the recipients, particularly those who wish to go to college, but that Whitman's may be better for others who have difficulty sticking to long term plans.

In welfare reform, symbolism is often more important than economic changes. The "family cap" was a minor economic change, but an important symbolic one. Wayne Bryant knew this. He scheduled hearings in inner city communities knowing that community groups and liberal activists would rise up in opposition and spread the word thorughout the neighborhoods. This community reaction was an important part of his strategy.

Welfare researchers have focused too much on small variations in economic incentives - which can be varied in rigorous experiments - and too little on trends in public opinion and cultural expectations which cannot be manipulated in the same way. The New Jersey reform worked because it was designed by a politician with a good sense of timing who was in close touch with the community. Even so, its most striking outcome - the decline in new applications for welfare - was not what he had expected.

The "family cap" worked because it was part of a comprehensive policy package which was in keeping with the trends of the time. It did not prove that women have babies for an extra $64 a month, but that was never its intention. It did show that welfare reform can have a constructive social impact, even if the mechanisms of that impact are not fully anticipated.