The Road Not Taken? Changes in Welfare Entry During the 1990s

Objective. This article examines how welfare entry rates changed during the 1990s, and also assesses whether changes in entry rates are accompanied by improvements in the circumstances of families that choose not to receive welfare. Methods. This analysis uses data from the 1990 and 1996 panels of the Survey of Income and Program Participation to identify three cohorts of low‐income single mothers who are potentially eligible for welfare but are not receiving benefits. Multivariate (competing risk) regression models and decomposition techniques are used to identify the factors responsible for changes in welfare entry patterns over the 1990s. Results. We find that welfare entry rates declined during the 1990s with the largest declines coming toward the end of the decade. Neither changes in the characteristics of low‐income single mothers nor improvements in the economy directly account for this shift. Rather, the introduction of new policies like time limits, full‐family sanctions, and family caps under welfare reform, along with unmeasured factors such as changes in attitudes toward work and welfare, account for the drop in welfare entry rates. The analysis also shows that declining entry rates are not accompanied by substantial improvements in the circumstances of low‐income single mothers who are not on welfare. Conclusions. Welfare reform policies adopted during the 1990s reduced entry into welfare, but single mothers who stayed off welfare remained in precarious economic circumstances.