This study examines welfare dynamics in Mississippi under the newly created TANF program. Specifically, it examines welfare-to-work transition between 2001 and 2009 and tests several hypotheses regarding individual and contextual characteristics. The data come from multiple sources that include administrative records and publicly available data. Data on TANF transitions come from the Mississippi Department of Human Services. Data on TANF employment come from the Mississippi Department of Employment Security. Data on training come from the Mississippi workforce investment system. Information on both neighborhood and labor market characteristics come from the 2000 Census.

The findings clearly support the hypothesis that individual and contextual conditions influence the ability of a poor single mother to exit TANF and gain employment. On the other hand, there is weak evidence supporting the hypothesis of welfare dependence when controlling for unobserved characteristics for multiple spells within individuals. The main implication here is that TANF might have indeed addressed the longstanding concern about welfare dependency. The results, however, show that individual and contextual factors still play a role in determining welfare dynamics across poor single mothers with different individual and contextual backgrounds.