In 1996, the United States fundamentally changed the rules of welfare for the very poor. Instead of giving cash benefits to poor mothers, the new Temporary Assistance for Needy Families program emphasized moving recipients quickly into the paid labor force, no matter how low the wages. The federal government gives states funds to support public assistance, but in return for temporary assistance and very limited services, clients must prove they are completing work activities and looking for employment. The new approach assumes that poor people mismanage their lives and need to develop greater self-discipline to become self-sufficient. Front-line administrators set clear behavioral expectations, monitor compliance, and use incentives to encourage compliance. When rules and incentives do not work, case-workers must apply penalties – up to and including the termination of aid altogether.

Today as in the past a high proportion of welfare clients come from racial minorities. In the tough new U.S. system, how do front-line welfare administrators decide which clients should be sanctioned for misbehavior? My colleagues and I have done research to nail down the answers. more...