Although the combined value of Aid to Families with Dependent Children (AFDC) guarantees and food stamps has been declining in real terms, national data from the March Current Population Survey show that the economic status of families with members receiving AFDC has improved since the mid-1980s. This pattern holds in monthly survey data from the Survey of Income and Program Participation, and in expenditure data for cash welfare families with children in the Consumer Expenditure Survey. On average, earnings have increased while net taxes and other non-medical transfers have offset the decay of AFDC.

The author is a policy analyst at the Office of Management and Budget. Early drafts of this work were completed while the author was a visiting scholar at The Urban Institute. The views expressed are the author's personal views and do not represent the views of OMB or the Administration. Many thanks to Gregory Acs, Christopher Jencks, Robert Kilpatrick, Robert Lerman, Alberto Martini, Howard Rolston, and an anonymous reviewer for their helpful comments. The data used here can be obtained beginning March 1999 through February 2002 from the author at Room 6001, Office of Management and Budget, New Executive Office Building, Washington, DC 20503.