Innovation at the State Level: Initial Effects of Welfare Reform in Iowa

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.