The Personal Responsibility and Work Opportunity Reconciliation Act dramatically altered the social safety net for poor Americans, and raised concerns over the 7.5 million people living in poverty in nonmetro areas. So far, welfare reform has reduced caseloads, increased employment, and lessened poverty. While the impact of welfare reform does not appear to differ greatly between rural and urban areas at the national level, many studies of individual State welfare programs report smaller welfare reform impacts on employment and earnings in rural areas than in urban areas. These smaller effects are due largely to the demographic characteristics of recipients and to the poorer job opportunities and lack of critical work supports in rural areas.