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The enactment of the Personal Responsibility and Work Opportunity Reconciliation Act in 1996 transformed the U.S. welfare system into a work-based one. The Act requires most recipients to either find work or lose welfare benefits after not more than 2 consecutive years on welfare. Many former welfare recipients are finding jobs in the private sector; one study of nine States found that between 50 percent and 70 percent of former welfare recipients are working. However, a number of experts have highlighted two potential problems: the low employability of those remaining on welfare and the negative impact of an economic downturn on the ability of many welfare recipients to find jobs. An article in one publication asks whether today’s welfare success could be tomorrow’s crisis and expresses concern as to what will happen to former welfare recipients when the jobs dry up and the safety net provides limited support for the jobless poor. The possibility of a future job crisis for those coming off of welfare has prompted numerous researchers to examine the job creation potential of public-service employment programs. Researchers at the Jerome Levy Economics Institute of Bard College suggest establishing a program whereby the Federal Government would “buy” all unemployed labor at a fixed wage and “sell” it—that is, allow the program’s labor force to be reduced— when the private sector needs labor and offers those workers a higher wage. The Center on Budget and Policy Priorities in Washington, DC, examined public-service employment initiatives in a numPublic-service employment programs in selected OECD countries
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