Mary Jo Bane and David Ellwood examine the American welfare system—its recipients, its providers, and the swirl of policy ideas surrounding it—with objectivity and clarity. Focusing on the AFDC Program (Aid to Families with Dependent Children), they examine the composition of the populations receiving assistance, the duration of that assistance—who receives benefits for a long time and who only briefly, during important transitional periods—and the prospects facing AFDC recipients within the administrative culture of the system. The authors identify three models that have been used to explain “welfare dependency” and test them against an accumulating body of evidence They offer suggestions for identifying potential long-term recipients so that resources can be targeted to encourage self-sufficiency. Finally, they review policy options.