More Money, Fewer Lives: The Cost Effectiveness of Welfare Reform in the United States

Abstract

OBJECTIVES: We evaluated the economic benefits of Temporary Assistance to Needy Families (TANF) relative to the previous program, Aid to Families with Dependent Children (AFDC). METHODS: We used pooled mortality hazard ratios from 2 randomized controlled trials-Connecticut Jobs First and the Florida Transition Program, which had follow-up from the early and mid-1990s through December 2011-and previous estimates of health and economic benefits of TANF and AFDC. We entered them into a Markov model to evaluate TANF's economic benefits relative to AFDC and weigh them against the potential health threats of TANF. RESULTS: Over the working life of the average cash assistance recipient, AFDC would cost approximately $28000 more than TANF from the societal perspective. However, it would also bring 0.44 additional years of life. The incremental cost effectiveness of AFDC would be approximately $64000 per life-year saved relative to TANF. CONCLUSIONS: AFDC may provide more value as a health investment than TANF. Additional attention given to the neediest US families denied cash assistance could improve the value of TANF.

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