The Impact of Earnings Disregards on the Behavior of Low‐Income Families

This paper investigates the impact of changes in earnings disregards for welfare assistance received by single mothers following welfare reform in 1996. Some states adopted much higher earnings disregards (women could work full‐time and still receive substantial welfare benefits), while other states did not. We explore the effect of these changes on women's labor supply and income using several data sources and multiple estimation strategies. Our results indicate these changes had little effect on labor supply or income. We show this is because surprisingly few women used the earnings disregards. We discuss several explanations for why this might occur.     

Does the minimum wage affect welfare caseloads?

Although minimum wages are advocated as a policy that will help the poor, few studies have examined their effect on poor families. This paper uses variation in minimum wages across states and over time to estimate the impact of minimum wage legislation on welfare caseloads. We find that the elasticity of the welfare caseload with respect to the minimum wage is between 0.1 and 0.2, but this estimate is sensitive to the sample period and assumptions about state trends. We tentatively conclude that higher minimum wages increase welfare dependence; however, more research is warranted.© 2005 by the Association for Public Policy Analysis and Management     

The Effect of Safety Net Generosity on Maternal Mental Health and Risky Health Behaviors

Single mothers are more likely to experience mental health problems and stress-related negative health behaviors than their married counterparts, but a more generous safety net may improve these outcomes. We use a simulated safety net eligibility approach that accounts for interactions across safety net programs and relies on changing policies across states and time to identify causal effects of safety net generosity on psychological distress and risky behaviors of single mothers. Results suggest that a more generous safety net is protective of maternal mental health: a $1,000 increase to the simulated potential combined cash and food benefit package reduces severe psychological distress by 8.4 percent. Breaking out effects by individual programs while still controlling for potential benefits from other programs, we find protective effects of tax credits, cash benefits provided by Temporary Assistance for Needy Families, and food benefits provided by Supplemental Nutritional Assistance, but no effects of Medicaid eligibility. The effects are primarily driven by single mothers with the lowest levels of education. We find no significant effects of generosity on daily smoking, but we find evidence that benefits reduce the likelihood of heavy drinking. Results suggest that government investments in resources available to low-income families can be effective at improving well-being.     

The transformation of the Supplemental Nutrition Assistance Program

Between 2000 and 2005, the Supplemental Nutrition Assistance Program (SNAP, until recently, the Food Stamp Program) caseload increased by half. As the Great Recession unfolded, the SNAP caseload grew even more rapidly. Further, over the past two decades the composition of the caseload has shifted sharply away from families combining food and cash assistance and toward families receiving food assistance in the absence of any other major, means‐tested income support. By analyzing components of the caseload separately, we provide new and more insightful estimates of the effects of food and cash assistance policies and the economy on both the change in the composition of the caseload and the large caseload swings over the 1990s and 2000s. We find that the economy can explain a portion of caseload changes, but not compositional shifts. Food and cash assistance policies help to explain both changes. In total, the combination of SNAP and welfare policy changes account for about half of the sharp increase since 1994 in the share of SNAP households receiving food, but not cash, assistance. © 2011 by the Association for Public Policy Analysis and Management.     

Welfare transitions in the 1990s: The economy,welfare policy,and the EITC

The rapid decline in the welfare caseload remains a subject of keen interest to both policymakers and researchers. In this paper, I use data from the Survey of Income and Program Participation spanning the period from 1986 to 1999 to analyze how the economy, welfare reform, the earned income tax credit (EITC), and other factors influence welfare entries and exits, which in turn affect the caseload. I find that the decline in the welfare caseload resulted from both increases in exits and decreases in entries. Entries were most significantly affected by the economy, the decline in the real value of welfare benefits, and the expansion of the EITC. Exits were most significantly affected by the economy and federal welfare reform. Federal reform had its greatest effects on longer‐term spells of the type generally experienced by more disadvantaged recipients. Some out‐of‐sample predictions help explain the otherwise puzzling observation that, despite substantial increases in the unemployment rate since 2000, caseloads have remained roughly constant. © 2004 by the Association for Public Policy Analysis and Management     

The effects of welfare reform on the academic performance of children in low‐income households

During the 1990s, U.S. welfare policy underwent dramatic reforms aimed at promoting employment and reducing dependence. Although the immediate effects on adult labor supply and family income have been studied extensively, this paper is the first to evaluate the long‐run effects on children's well‐being. Using a decade of national math achievement data and controlling for contemporaneous changes in education policy and environment, we associate welfare reform with relative test score improvements for low‐income students. Greater gains occur in states with larger initial welfare caseloads and larger caseload reductions.© 2009 by the Association for Public Policy Analysis and Management.     

State strategies for welfare reform: The Wisconsin story

Wisconsin is commonly cited as exemplar of the capability of states for reforming welfare. Wisconsin's welfare and caseload declined 22.5 percent between 1986 and 1994. I argue that the decline resulted from restriction of eligibility and benefits, a strong state economy, and large expenditures on welfare-to-work programs encouraged by an exceptional fiscal bargain with the federal government. Continued reduction of welfare utilization by means other than denying access are jeopardized by proposed changes in federal cost-sharing, a prospective state deficit, and the growing share of the caseload accounted for by residents of Milwaukee. Wisconsin Works, the state's plan for public assistance in a post-block grant world, continues benefit reduction and eligibility restriction but expands emphasis on employment. The special circumstances enjoyed by Wisconsin are unlikely to be duplicated elsewhere.     

Obligation and welfare policy

Ronald Reagan came to the White House with a reputation for welfare reform that dated from his days as governor of California. The administration's first step was to restrict benefits to working recipients in ways similar to procedures originally proposed in that state. The impact on the AFDC caseload of these changes, however, was modest, and, ironically, the work program opportunities provided by legislation sponsored by the Reagan administration have been exploited as successfully by Democrats such as Michael Dukakis of Massachusetts as by Republicans. Despite frequent references to welfare and welfare problems since 1981, the administration has been notably short of ideas.The silence from the White House has been filled by outsiders - first Murray and then Mead and others such as journalists Mickey Kaus (1986) and Nicholas Lemann (1986). While Losing Ground argued for the government's retirement from the field in the War on Poverty, Mead offered a vision certain to make both liberals and the administration uncomfortable. On the one hand, his demand for creative statecraft calls for substantial government activism, a renewed attack. On the other, his assertion that further progress will require attention to behavioral issues challenges the liberal attitude that what the poor need most is the empowerment that cash can provide. For the concerned public, something about Mead's argument rings true. The poverty we see - homeless derelicts, children of mothers who are children themselves, recipients who reach midlife never having known anything but welfare dependency, neighborhoods in which everyone receives support - hardly seems vulnerable to negative tax payments. And, as Mead suggests, eliminating the present system would create unacceptable hardship. Even if financial incentives are the prime movers in most areas of economic life, we are all a bit embarrassed by them; in the abstract it seems better to say that absent parents are obligated to support their children and able-bodied adults are obligated to work.     

Is Democracy Good for the Poor?

Many scholars claim that democracy improves the welfare of the poor. This article uses data on infant and child mortality to challenge this claim. Cross-national studies tend to exclude from their samples nondemocratic states that have performed well; this leads to the mistaken inference that nondemocracies have worse records than democracies. Once these and other flaws are corrected, democracy has little or no effect on infant and child mortality rates. Democracies spend more money on education and health than nondemocracies, but these benefits seem to accrue to middle- and upper-income groups.     

Marriage patterns among unwed mothers: Before and after PRWORA

The promotion of marriage and two‐parent families became an explicit public policy goal with the passage of the 1996 welfare reform bill. Marriage has the putative effect of reducing welfare dependency among single mothers, but only if they marry men with earnings sufficient to lift them and their children out of poverty. Newly released data from the 2002 cycle of the National Survey of Family Growth (NSFG), along with data from the 1995 cycle, allow us to compare pre‐ and post‐PRWORA differences in (1) cumulative marriage rates among unwed mothers, and (2) patterns of marital choice (that is, differences in characteristics of the men these mothers marry, such as their education and employment status). Overall, our results show that unwed childbearing is associated with lower marriage rates and marital quality. Difference‐in‐difference models show that welfare reform was not strongly associated with pre‐ and post‐welfare reform changes in marriage among nonmarital birth mothers, even among the most disadvantaged mothers. Compared with other women, nonmarital birth mothers also were less likely than other women to marry “economically attractive” men in the post‐welfare reform period. The success of marriage promotion initiatives may depend heavily on whether women themselves are “marriageable” and whether potential spouses have the ability to support a stable family life. © 2008 by the Association for Public Policy Analysis and Management.     

From D.C. to Little Rock: Welfare Reform at Mid-term

Following an active period of state welfare reforms, passageof the Temporary Assistance for Needy Families (TANF) programin 1996 gave states great flexibility, set up block-grant financing,and imposed work-related mandates. Under TANF, states increasedtheir work expectations for recipients; improved work incentives;and provided more work supports, such as child care and transportationassistance. Caseloads have dropped sharply, and most formerrecipients are finding work. Caseload declines in most stateshave resulted in substantial funding being available for newand expanded services, including supports for working poor familiesand early-childhood and after-school programs. Most states havebeen slower to develop these programs, but the pace is increasingas policymakers become more secure about TANF's flexibilityand the magnitude of the caseload changes.     

WORKFARE IN THE 1980s: SUCCESSES AND LIMITS

Between 1981 and 1987 twenty-eight states experimented with workfare programs. By requiring mandatory community service from welfare recipients, the states hoped to reduce welfare caseloads as well as increase community service. Based in part on those program experiences, Congress included the first national workfare requirement in the 1988 welfare reform package (the Family Support Act). This study is the first to attempt to evaluate the implementation and impact of workfare on a national basis. A pooled, cross-section, longitudinal model is used to estimate the effect of workfare on AFDC caseloads. Despite the low level of state-level implementation, the evidence suggests that workfare may have contributed to welfare caseload reductions in the 1980s.     

Does it pay to move from welfare to work?

The 1996 Personal Responsibility and Work Opportunity Reconciliation Act requires welfare recipients to look for work and has made it more difficult for nonworking recipients to remain on the welfare rolls. In addition, the economic boom of the 1990s and changes in federal and state policies have raised the net income gain associated with moving from welfare to work. This paper analyzes data from a panel survey of single mothers, all of whom received welfare in February 1997. In 1999, those who left welfare and were working had a higher household income and lower poverty rate, experienced a similar level of material hardship, engaged in fewer activities to make ends meet, and had lower expectations of experiencing hardship in the near future than did nonworking welfare recipients. Estimations of fixed‐effect regressions of income that control for both observable and unobservable time‐invariant characteristics show that monthly net income increases by $2.63 for every additional hour of work effort. About 60 percent of the observed monthly income difference between wage‐reliant and welfare‐reliant mothers can be attributed to differences in their work effort. Thus, after welfare reform, it does pay to move from welfare to work. © 2002 by the Association for Public Policy Analysis and Management.     

Subsidized housing,housing prices,and the living arrangements of unmarried mothers

Abstract

Although many studies estimate the effects of welfare benefits on mothers’ living arrangements, housing subsidies and prices are rarely the focus. This article uses a new longitudinal birth cohort study, the Fragile Families and Child Wellbeing Study, to examine the relationship between subsidized housing, housing prices, and the living arrangements of unmarried mothers three years after a nonmarital birth.

Results suggest that the availability of subsidized housing is negatively associated with marriage relative to living alone. Eligibility criteria and means testing in subsidized housing may make marriage a costly choice. Housing prices are positively associated with marriage, cohabitation, and living with family members relative to living alone. Economies of scale may be particularly important for single‐earner households when housing prices increase. Failure to control for housing costs and subsidies leads to underestimates of the effects of welfare and unemployment rates on the living arrangements of unmarried mothers.     

The private safety net: The role of charitable organizations in the lives of the poor

Abstract

As welfare reform unfolds, nonprofit social service agencies will increasingly be called upon to help fill the gap between what unskilled and semiskilled mothers can earn in the low‐wage labor market and what they need to meet their monthly expenses. This article draws on in‐depth interviews with low‐income single mothers and multiyear observational studies of two nonprofit social service agencies.

Using these data, the authors show what kinds of resources these agencies provide low‐income single mothers, how mothers mobilize the resources available, to what degree agencies actually contribute to mothers’ cash and in‐kind resources, how agencies distribute their resources, and what effect agencies’ distribution practices have on these women. The analysis shows that although nonprofit social service agencies are a crucial part of many low‐income mothers’ economic survival strategies, they cannot come close to substituting for the eroding public safety net.     

Administration, Governance, and Policy Tools in Welfare Policy Implementation

Landmark welfare reform legislation passed in 1996 has been operating by legislative extensions since its expiration in September 2002. At this writing, reauthorization has been derailed by controversy over various legislative proposals. In this article, we contribute to the welfare policy debate by studying the importance of specific policy tools and the role of public administration in the dramatic fall in welfare caseloads from 1996 to 2000. Using administrative and survey data on welfare programs in 44 states, we test our theory that caseload reduction is a function of administrative commitments, policy design, and administrative actions linked to five sets of governance variables: environmental factors, client characteristics, treatments, administrative structures, and managerial roles and actions. We find strong evidence that administrative action to move clients into work, coupled with administrative commitments, can provide important links between policy goals and policy outcomes.     

The effect of employment and training programs on entry and exit from the welfare caseload

To policymakers, the major attraction of employment and training programs for welfare recipients is that they hold out the prospect that recipients can be moved off the rolls and to self-sufficiency in the private labor market, thereby decreasing welfare costs and caseloads. This article considers the possibility that such programs may also affect the attractiveness of welfare in the first place, either by making welfare less desirable because the work-training program is viewed by recipients as a burden, or by making it more desirable because the program is viewed favorably by potential applicants. Such responses are termed here “entry rate effects.” Some empirical estimates are presented which suggest that the magnitude of such entry rate effects on the caseload, where positive or negative, may be quite large.     

Maternal Mental Health during Children's First Year of Life: Association with Receipt of Section 8 Rental Assistance

Prior studies evaluating housing programs have found varied results for the impact of improved housing on maternal mental health. This study evaluated data from 169 families who participated in Hawaii's Healthy Start Program. The study's objective was to determine whether receipt of Section 8 rental assistance in the first year of a child's life decreased the risk of poor maternal mental health. Multivariable logistic regression was used to measure the association of Section 8 housing receipt with poor mental health. Overall, 50% of mothers had poor mental health at baseline, and 32% reported receipt of Section 8 housing at follow-up. Mothers who received Section 8 housing were significantly less likely to have poor maternal mental health at follow-up (adjusted odds ratio = .40; 95% confidence interval, .16–.97; p < .05). Receipt of Section 8 rental assistance in the first year of a child's life may reduce the risk of poor mental health for mothers in housing need.     

How welfare reform affects young children: Experimental findings from Connecticut—A research note

As welfare‐to‐work reforms increase women's labor market attachment, the lives of their young children are likely to change. This note draws on a random‐assignment experiment in Connecticut to ask whether mothers' rising employment levels and program participation are associated with changes in young children's early learning and cognitive growth. Children of mothers who entered Connecticut's Jobs First program, an initiative with strict 21‐month time limits and work incentives, displayed moderate advantages in their early learning, compared with those in a control group. A number of potential mechanisms for this effect are explored, including maternal employment and income, home environment, and child care. Mothers in the new welfare program are more likely to be employed, have higher income, are less likely to be married, have more children's books in their home, and take their children to libraries and museums more frequently. However, these effects explain little of the observed gain in child outcomes. Other parenting practices and the home's social environment do explain early learning, but these remained unaffected by welfare reform. © 2003 by the Association for Public Policy Analysis and Management     

Asymmetric Effects of Intergovernmental Grants: Analysis and Implications for U.S. Welfare Policy

Theories of federal grants to states and localities suggestthat these grants have a stimulative effect on spending, causingrecipient governments to expand and contract programs alongwith changes in the grants. However, policymakers may responddifferently to grant decreases than to grant increases becausethey face political and bureaucratic pressures to expand programs.These asymmetric reactions may depend on specific politicalstructures. Pooled time-series regressions of data from theAid to Families with Dependent Children program across 46 statesfrom 1965 to 1994 demonstrate state government responses togrant changes. Bureaucratic pressures and proposals lead statesto expand their welfare benefits upon increases in federal grants,but not to contract them upon decreases in federal grants. Withregard to the 1996 welfare reforms, this study indicates thatthe switch to block grants will lead to little or no state reductionin welfare payments.