More Money, Fewer Lives: The Cost Effectiveness of Welfare Reform in the United States

Objectives. We evaluated the economic benefits of Temporary Assistance to Needy Families (TANF) relative to the previous program, Aid to Families with Dependent Children (AFDC). Methods. We used pooled mortality hazard ratios from 2 randomized controlled trials—Connecticut Jobs First and the Florida Transition Program, which had follow-up from the early and mid-1990s through December 2011—and previous estimates of health and economic benefits of TANF and AFDC. We entered them into a Markov model to evaluate TANF’s economic benefits relative to AFDC and weigh them against the potential health threats of TANF. Results. Over the working life of the average cash assistance recipient, AFDC would cost approximately $28 000 more than TANF from the societal perspective. However, it would also bring 0.44 additional years of life. The incremental cost effectiveness of AFDC would be approximately $64 000 per life-year saved relative to TANF. Conclusions. AFDC may provide more value as a health investment than TANF. Additional attention given to the neediest US families denied cash assistance could improve the value of TANF