US welfare reform: What’s relevant for Europe?

CESifo Economic Studies is an English language relaunch of the formerly German language ifo Studien. Vol.49, No.1, 2003 is the first issue with the new title. CESifo Economic Studies aims to bridge the gap between specialised research in economics and the interest of non-specialists. The journal combines theory and empirical research with a strong emphasis on policy issues. CESifo Economic Studies publishes contributed papers by top level academic economists which are written in a style accessible to all economists regardless of their specialisation. The primary focus of the journal is on policy problems, but it also publishes high quality, non-technical articles which are of general interest to economists.

Article abstract:

This paper reviews the U.S. welfare reform efforts over the 1990s and the effects of these reforms to date. Seven 'lessons' of potential interest to European observers are discussed, with particular attention to the conclusions of more recent research. Such research indicates, for example, that more effective programs contain both positive
and negative incentives, utilise work-first as well as job training programs, and provide some important supports beyond just job and work skills. The paper ends with some speculations about why European policy-makers are becoming more interested in U.S. welfare reform experiments than they have been in the past.

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