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Case HBS Case Collection June 2015 1996 Welfare Reform in the United States |
On August 22, 1996, U.S. President Bill Clinton signed into law the Personal Responsibility and Work Opportunity Reconciliation Act (PRWORA)—a dramatic reform of the American system of economic assistance for the poor that, as its title suggested, attempted to encourage labor force participation rather than reliance on federal support. Clinton's decision to support a proposal that substantially cut spending on economic assistance was controversial among members of the Democratic Party, especially so close to the 1996 election. Republicans, in contrast, hailed the signing of PRWORA. Was the 1996 welfare reform a triumph of centrist policymaking that would establish a more sustainable version of economic assistance for poor Americans, or was it a dangerous first step toward the gradual disappearance of that assistance? Whose vision of American society did it represent?
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Keywords: welfare state; Poverty; public goods; moral hazard; median voter theorem; Poverty; Welfare or Wellbeing; Public Administration Industry; United States;
Weinzierl, Matthew, Katrina Flanagan, and Alastair Su. "1996 Welfare Reform in the United States." Harvard Business School Case 715-030, June 2015.
