The number of Wisconsin women using cash assistance (AFDC) dropped from 96,300 in 1990 to just over 5000 in 1998. It is a extraordinary decline reflecting a remarkable story of a changed attitude toward assistance The fact that the rules changed certainly made a difference. But the overall number on AFDC h been declining from mid decade onward. Work in the formal sector became a part of 88% of these women’s lives over the 1990-1998 period.

For some, it was a major part of their lives; for others, the contact was fleeting. The 1998 outcomes reflect these differences. About 23,000 (24%) of the women on AFDC in Wisconsin in 1990 did become clearly self-supporting. They earned an average of $23,000 in the formal economy in 1998. Some of them earned considerably more. These women are not likely to become dependent again.

But the story is not as clear for the other 73,000 in the 1990 AFDC cohort. About 22,000 of these women worked in all quarters of 1998 and yet were able to earn only $9,600, on average. Why did they earn so much less, despite the seemingly equivalent work effort? The analyses in this report attempt to explain this...