This book, which is intended to give stakeholders in state and local welfare policies a foundation on which to plan state/local reform efforts, summarizes some of the key findings and lessons from 2 decades of research on policies and programs aimed at increasing the self-sufficiency of low-income individuals and families. Chapters 1 and 2, which describe the context of welfare reform, examine the following topics: reasons for welfare's unpopularity; objectives of welfare reform; highlights of the Personal Responsibility and Work Opportunity Reconciliation Act of 1996; characteristics of welfare recipients; characteristics of the labor market for low-skilled women; key features of the welfare system; and implications of welfare reform. Part 2, which is based on the research on increasing work and self-sufficiency among welfare recipients, covers the following topics: goals/limitations of welfare-to work programs; mandatory work and subsidized employment; pros/cons of changing financial incentives; and opportunities/risks of imposing welfare time limits. The book's final chapter focuses on goals and trade-offs, key challenges, pitfalls, and opportunities of welfare reform policies. Contains 12 figures/tables and 218 chapter endnotes. Appended is a discussion of work-related provisions of the 1996 federal welfare law. (MN)