This paper presents an overall approach, statistical techniques, and a public-use database that can be used for understanding state welfare policies and measuring their relationship with key outcomes of interest, all while learning helpful statistical techniques. We use descriptive statistics and correlations to describe state policies. We find tremendous variation in the types of job entry-related policies states adopted, and that state time limit policies tended to be consistently lenient or strict in 1999. State work requirement and financial incentive policies, however, were less consistent. We use factor analysis to create three summary variables describing state time limit, work requirement, and financial incentive to work policies. We then use cluster analysis to group states into five clusters based on the summary variables. Factor analysis proves more fruitful than cluster analysis for future analysis linking policies to outcomes.