Over the past two decades, federal and state policymakers have dramatically reshaped the nation’s system of cash welfare assistance for low-income families. Through national legislation and state-initiated reform and experimentation, policymakers transformed Aid to Families with Dependent Children (AFDC), which became Temporary Assistance for Needy Families (TANF) in 1996. During this period, state approaches to welfare reform have varied considerably. Nevertheless, almost all reform efforts have encouraged adult welfare recipients to work more and, as a result, to reduce their families’ long-term reliance on welfare benefits. In addition, many state welfare pro-grams have incorporated financial incentives that have encouraged work and supplemented the incomes of employed TANF recipients, and have also experimented with ways to help workers—employed TANF recipients and those who leave the TANF rolls with employment—retain employment and advance in the labor market.