discretion will result in a lower unemployment rate. But if, on average, state discretion increases reservation wages and/or reduces work incentives in the United States, then the unemployment rate will increase. There is, however, ample reason to believe that state discretion, on average, will result in welfare reforms that emphasize the other parts of the welfare reform consensus. To date, states have been at the forefront of introducing such programs as workfare and increased parental financial responsibility. More state discretion would likely result in more experimentation in these and other areas that will, over time, help reduce the U.S. unemployment rate. We say "over time" because, as states experiment with new programs, some will work and some will not. Those that work will be copied. Competition between states will lead to the best programs gaining widespread acceptance. With welfare policy being dictated from the national government, very little experimentation and competition can occur. 24
In summary, virtually all of the parts of the welfare reform consensus identified by Reischauer have the potential to help reduce the U.S. unemployment rate. We therefore recommend that welfare reform incorporating this consensus be enacted.