Trends in Welfare, Work and the Economic Well-Being of Female-Headed Families with Children: 1987-2000

Publication Date: December 2001

Publisher: Library of Congress. Congressional Research Service

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Research Area: Social conditions

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Abstract:

Welfare reform legislation, signed into law in 1996 as the Personal Responsibility and Work Opportunity Reconciliation Act (PRWORA) (P.L. 104-193), replaced the 61 year-old Aid to Families with Dependent Children (AFDC) program, a federal entitlement program for low-income families with children. In place of AFDC, the law created the Temporary Assistance for Needy Families (TANF) program, a federal block grant program providing resources to the states. TANF eliminated the federal entitlement to assistance that existed under AFDC and gave states increased flexibility to run programs to assist needy families with children. A major purpose of TANF is to end dependence of needy families on government assistance by promoting job preparation, work, and marriage.

This report examines trends in welfare, work and economic well-being of femaleheaded families with children, the principal group affected by the replacement of AFDC with TANF. The report presents analysis of 14 years of U.S. Census Bureau Current Population Survey (CPS) data, the principal source of information for U.S. family income and poverty statistics. The beginning of the analysis period precedes the Family Support Act of 1988, the last major nationwide welfare reform law passed by Congress before TANF. The analysis spans the run-up in welfare caseloads that began in 1989 and the historic caseload declines that have followed since reaching an all-time high in early 1994. Over the period studied, a variety of economic, demographic, and public policy and program changes, besides TANF, are likely to have affected welfare, work and the economic well-being of single-mother families. This report does not attempt to untangle these possible effects.

The analysis shows that there has been a dramatic transformation with regard to welfare, work and poverty status of single mothers over the past 14 years. Many of these changes began before the passage and implementation of TANF, but have continued, perhaps to an even greater extent, since. The analysis shows that single mothers are more likely to be working in recent than in past years, and that they are less likely to receive cash welfare or to be poor. However, reductions in poverty have not been as large as the large declines in welfare and the increased rates of work that have occurred. The analysis indicates that welfare receipt rates among poor families headed by single mothers have dropped considerably. Among single mothers whose incomes place them in the bottom fifth of all such mothers, income from earnings supplemented by the Earned Income Tax Credit (EITC) has grown markedly since 1993, but not until 2000 have these gains been sufficient to offset losses in cash welfare and food stamps that have occurred in each year since 1994. The report suggests that full-time full-year work may be necessary, but not sufficient, to raise single mothers' family incomes above poverty. U.S. income support policy will continue to be challenged to promote economic self-support through work and to reduce poverty and welfare dependency among families headed by single mothers. This may be especially true given the weakened state of the current economy.