The passage of the Personal Responsibility and Work Opportunity Reconciliation Act
(PRWORA) in 1996 devolved responsibility for the design of welfare programs from
the federal to state governments in the U.S. The strategies implemented to achieve
some of the main goals of the reform might have had the effects of reducing the
protection received by the most vulnerable households and increasing differences in
benefit levels across states. We estimate these effects using Temporary Assistance for
Needy Families data covering the two decades after the PRWORA’s enactment. We
find that inequality levels across states increased and that a general process of
degradation in the adequacy of these cash benefits took place ensuing devolution of
welfare reform in the U.S.
