Intergenerational Effects of Welfare Reform on Educational Attainment

This paper estimates the impact of the fundamental welfare reforms of the 1990s on the educational attainment of children in low-income families. Using administrative records and individual survey data spanning the early 1990s to the mid-2000s, we find large positive effects of welfare reform: income gaps in school enrollment and dropout rates narrow by more than 20 percent. Unlike the significant and growing relative gains in the years following state welfare reforms, we find no evidence of relative gains for low-income adolescents in the years preceding the reforms. These findings are robust under alternative definitions of the treatment and control groups and after controlling for contemporaneous economic and policy changes.