WASHINGTON, March 21 - In a trend that has surprised many experts, the federal welfare rolls have declined over the last three years, even as unemployment, poverty and the number of food stamp recipients have surged in a weak economy.
After Congress overhauled the nation's welfare system in 1996, the number of families receiving benefits dropped much faster than federal and state officials had expected. Even more remarkable, officials say, the rolls did not grow during the recession of 2001 or the sluggish economy since.
In fact, in the last three years, the number of families on welfare has declined slightly, to two million, which is less than half the number receiving public assistance when President Bill Clinton signed the welfare law in August 1996.
Experts suggest many reasons. People work harder to find jobs before seeking public assistance. Welfare recipients have learned job skills and a work ethic. States provide child care and other noncash help so they can keep jobs after leaving welfare. And, some experts say, new rules and requirements may intimidate poor people from seeking welfare.
Mark H. Greenberg, a lawyer at the Center for Law and Social Policy, a research and advocacy group, said, "One of the great mysteries of social policy in the last few years is why welfare caseloads have stayed essentially flat or declined in much of the country, despite the economic downturn."
In past recessions, newly hired welfare recipients and other low-skilled workers were among the first to lose their jobs. But that was apparently not the case with the most recent recession.
"Former welfare recipients were entrenched in the work force," said Marva Arnold, a senior official at the Human Services Department in Illinois, where the number of families on welfare has plunged 45 percent since January 2001, to 38,276. "They have gained real work experience, including the skills needed to maintain employment."
The 1996 welfare law contributed to a big increase in the proportion of single mothers in paid jobs outside the home. Robert L. Doar, commissioner of the New York State welfare agency, said, "Their attachment to the work force has proved stronger than many people expected."
In New York, the number of families receiving aid under the main federal welfare program, Temporary Assistance for Needy Families, has declined 39 percent since January 2001, to 140,758.
Heidi J. Hart, 27, of Portland, Me., was on welfare as a child and again as a parent, from 1995 to 2001. "I got pregnant at 15, became a mom at 16 and almost dropped out of high school," she said. The state allowed her to attend college while receiving public assistance.
"Welfare is no way to live," Ms. Hart said, "but I had to feed my baby somehow." She received $500 a month in welfare and food stamps, but now earns $2,200 a month at a child abuse prevention program.
Wade F. Horn, assistant United States secretary of health and human services in charge of welfare policy, said that the current welfare program had become relatively "recession-proof."
But Shawn Fremstad, a policy analyst at the Center on Budget and Policy Priorities, a liberal-leaning research and advocacy group, said, "Falling caseloads amid rising poverty should be a cause for concern."
Wendell E. Primus, a welfare official in the Clinton administration who resigned to protest signing of the 1996 law, amplified that concern: "It's an indictment of the welfare law, the welfare system, that it has not been more responsive to economic conditions."
Food stamps have been more sensitive to fluctuations in the economy. The number of households receiving food stamps has increased 35 percent in the last three years, to 10 million.
Some families have left the cash welfare rolls because they reached the time limits set by federal and state laws. Some have been removed from the rolls as a penalty for failing to comply with work requirements.
In some states, the application process is so difficult or complex that it may discourage people from seeking public assistance for which they are eligible.
The federal welfare program "is serving a smaller and smaller proportion of people who are poor enough to qualify," said Sharon Parrott, a policy analyst at the Center on Budget and Policy Priorities.
Robert E. Rector, a senior policy analyst at the conservative Heritage Foundation, said, "In most states, welfare has become a less attractive option."
That appears to be the case in Texas. Michael A. Jones, a spokesman for the state's Department of Human Services, said: "Our welfare program has a very strong pro-work message. People are more reluctant to rely on public assistance if they can find other means to support themselves. They're more likely to rely on family and friends to get by temporarily if they lose their jobs after leaving the rolls."
The number of Texas families on welfare has declined 11 percent in the last three years, to 116,166. The state has strict time limits — one year of cash assistance for the head of a household who has a high school diploma and some work experience, Mr. Jones said.
While over all the nation's welfare rolls have shrunk in the last three years, they have grown substantially in some states, including Arizona (46 percent), Indiana (34 percent), Nevada (38 percent) and Wisconsin (29 percent).
Nevada's gambling and hotel industries were hit hard by cutbacks in travel and tourism after the terrorist attacks of September 2001. In Wisconsin, which pioneered welfare changes in the early 1990's, officials attribute the recent increase to the sluggish national economy.
Several states, like Rhode Island and Washington, said that by investing heavily in child care, they had made it possible for former welfare recipients to stay off welfare even in hard times.
Jane A. Hayward, director of the Rhode Island Department of Human Services, said that in her state, any family with income less than 225 percent of the poverty level was entitled to state-subsidized child care. (The poverty level for a family of three is $15,670 a year.) Unlike many states, Ms. Hayward said, "we don't have waiting lists for child care."
The number of families on welfare in Rhode Island has declined 12.5 percent since January 2001, to 14,026, the lowest level since 1994, Ms. Hayward said.
In Washington State, the unemployment rate rose sharply, in part because of layoffs at Boeing, its suppliers and related businesses. But the number of families on welfare has been stable, around 56,000.
Kenneth Miller, an aide to Gov. Gary Locke, a Democrat, suggested one reason: "We preserved our child care benefits. Folks who went off welfare and got jobs paying $8 to $10 an hour can continue working because they have child care."
Another reason, he said, is that the state used its extensive network of community colleges to train welfare recipients. "We provided free tuition to many of those folks," he said. "They now understand how to use the community college system."
Economists and welfare officials said that the market for low-wage workers held up better than expected in the last few years.
"This recession appears to have affected higher-wage workers more than lower-wage workers," said Mr. Doar, the New York official.
Ms. Arnold, the Illinois official, said: "White-collar employees, managers and supervisors were hit first by the economic decline. Our customers were somewhat protected because they had not moved up to those jobs."
By ROBERT PEAR, New York Times
March 22, 2004