Using Government Programs to Encourage Employment, Increase Earnings, and Grow the Economy

There has been a steady decline over six decades in the share of adult men in the labor force. After five decades of historic increases, in 2000 the share of women in the labor force peaked and has declined slightly since. The 1996 welfare reform law imposed work requirements on mothers on welfare and increased employment among single mothers. But the work rate of single mothers has declined or stagnated since 2000. Millions of households have no earnings and are dependent on public benefits. Other public benefit programs also have provisions designed to increase work rates, but they have met with only modest success. The major purpose of this paper is to propose a new system of experiments, coordinated by a federal board with representation from cabinet agencies, to encourage state demonstration programs that would develop and test new ways to promote work and training across welfare programs and, thereby, increase the labor force participation rate of men and women, especially parents.