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This paper examines welfare participation dynamics during 1993-96, the initial years of Iowa's welfare reform, a reform remarkably similar to the state's current Temporary Assistance for Needy Families (TANF) program. Analyses of the Family Investment Program (FIP) participation over the program's first two years show that, on average, FIP recipients stayed fewer months in the second year compared with the first, although a relatively large share of participants (36 percent) stayed on for the full two years. A fixed effects model and a semiparametric duration model are used to examine welfare dependence and recidivism. Iowa's experience suggests that human capital, child support, marital status, and the presence of children will be significant factors in reducing time on TANF and recidivism. Child support and wage income are crucial in determining the degrees of success for exiting and staying off, especially during the early months of the exit.

In 1993, the State of Iowa, through waivers, implemented reforms to its welfare program creating the Family Investment program (FIP), a program similar to the Federal Temporary Assistance to Needy Families (TANF) program created in 1996. This paper examines the experiences of individuals and families who left FIP during the initial years. The program is designed to help FIP recipients achieve economic self-sufficiency. The analysis of linked state administrative record data and other local data shows that the Iowa experience has been relatively successful in supporting the transition of those leaving FIP. Almost three fourths of those leaving the program remained off for at least 12 months. Higher wage and child support collections were important factors in determining who would leave the program and their ability to stay off of public assistance. The food stamp program functions as a safety net and is an important income source for those who leave FIP. The success of moving people out of FIP in the long run requires finding low-income individuals a stable job and higher paid work.