To inform policymakers as they deliberate over the Temporary Assistance for Needy Families (TANF) reauthorization, this guide reviews what states have done with the flexibility afforded them by the Personal Responsibility and Work Opportunity Reconciliation Act. The first section examines how states have shaped their welfare reform strategies since 1996. It describes how, programmatically, most states used their new responsibilities and flexibility to implement these three policies: requiring work, making work pay, and time-limiting welfare benefits. The second section synthesizes findings from dozens of rigorous studies of welfare reform's effects on poor families and government budgets. To help policymakers understand the individual and combined effects of different policy approaches and come to better-informed decisions about how to address these trade-offs, this section looks closely at the effects of the different approaches in these seven key areas: program participation and mandates, employment and earnings, welfare use, income and hardship, children's well-being, and family and marriage. These policy implications of the research findings for TANF reauthorization are drawn: expand the role of education and training; add services for the hard-to-employ; enhance states' flexibility to reward work and benefit children; set reasonable participation standards; require midterm review of time-limit policies and adequacy of the 20 percent exemption; and invest in learning and sustaining innovation. (Contains 23 references.) (YLB)