Welfare Reform and Changes in the Economic Well-Being of Children

Abstract

Since the implementation of the Temporary Assistance for Needy Families program in late-1996, welfare rolls have declined by more than half. This paper explores whether improvements in the economic well-being of children have accompanied this dramatic reduction in welfare participation. Further, we examine the degree to which the success or failure of welfare reform has been shared equally among families of varying educational background. We analyze data from the March Current Population Surveys over the years 1988 through 2001. Specifically, we link data for families with children who are interviewed in adjacent years and determine whether their economic circumstances either improved or deteriorated. We use two alternative approaches to address this general issue: a variety of regression models and a differencein-differences methodology. These approaches provide consistent answers. In a bivariate framework TANF is associated with higher incomes; but this association becomes insignificant in the presence of business cycle controls. We also determine that children who were poor at an initial time period benefit differently, depending on their parents' educational attainment level. Poor children with parents who do not have a high school degree are significantly worse off in the TANF era, relative to the era prior to welfare reform, than are their more educated counterparts.

How Money Matters for Young Children's Development: Parental Investment and Family Processes

“…Furthermore, some mothers experienced more depressive symptoms because of the lack of quality child care and added financial strain from work-related costs. A recent study also found that TANF was associated with lower poverty rate for parents who had a high school diploma or higher, whereas those with less education were significantly poorer after TANF (Bennet, Lu, & Song, 2001). Given the current slowdown of the economy, we see no reason to expect these trends to be altered in the first decade of this century.…”

The Geography of American Poverty: Is There a Need for Place-Based Policies?

“…Known as "welfare reform," the 1996 act eliminated the welfare entitlement and placed a strict 60-month federal lifetime limit on most recipients; it also put stringent requirements on states to shift most recipients into work by 2002(Blank 2002Ellwood and Blank 2001). New legal immigrants faced restrictions in using TANF, and there were other changes to help reduce births to unwed mothers.…”