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The Effects of Welfare and Tax Reform: The Material Well-Being of Single Mothers in the 1980s and 1990s

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  • Bruce D. Meyer
  • James X. Sullivan

Abstract

The tax and welfare programs that provide income and in-kind benefits to single mothers have changed dramatically in recent years. These changes began as far back as the mid-1980s and culminated with the 1996 welfare law that 'ended welfare as we knew it.' These tax and welfare changes have sharply increased the employment of single mothers and cut welfare rolls. However, little is know about the effects of these policy changes on the living conditions of single mothers and their children. Studies of those leaving welfare have found that a substantial percentage have problems paying rent, purchasing enough food, and paying utility bills. Other studies have found a decline in income among the worst-off single mothers. The goal of this paper is to examine the material well-being of single mothers and their families before and soon after welfare reform. Using data from two nationally representative household surveys we examine the consumption patterns of single mothers and their families. We find that the material conditions of single mothers did not decline in recent years, either in absolute terms or relative to single childless women or married mothers. In most cases, our evidence suggests that the material conditions of single mothers have improved slightly, even for highly disadvantaged single mothers.

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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 8298.

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Date of creation: May 2001
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Publication status: published as Meyer, Bruce D. and James X. Sullivan. "The Effects Of Welfare And Tax Reform: The Material Well-Being Of Single Mothers In The 1980s And 1990s," Journal of Public Economics, 2004, v88(7-8,Jul), 1387-1420.
Handle: RePEc:nbr:nberwo:8298
Note: AG LS PR
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Find related papers by JEL classification:
  • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
  • H31 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - Household

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  1. Robert F. Schoeni & Rebecca M. Blank, 2000. "What Has Welfare Reform Accomplished? Impacts on Welfare Participation, Employment, Income, Poverty, and Family Structure," Working Papers 00-02, RAND Corporation Publications Department.
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  9. Bruce D. Meyer & Dan T. Rosenbaum, 2001. "Welfare, The Earned Income Tax Credit, And The Labor Supply Of Single Mothers," The Quarterly Journal of Economics, MIT Press, vol. 116(3), pages 1063-1114, August.
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  12. J. P. Ziliak & D. N. Figlio & E. E. Davis & L. S. Connolly, . "Accounting for the Decline in AFDC Caseloads: Welfare Reform or Economic Growth?," Institute for Research on Poverty Discussion Papers 1151-97, University of Wisconsin Institute for Research on Poverty.
  13. Gruber, Jonathan, 2000. "Cash welfare as a consumption smoothing mechanism for divorced mothers," Journal of Public Economics, Elsevier, vol. 75(2), pages 157-182, February.
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  24. James P. Ziliak & David N. Figlio & Elizabeth E. Davis & Laura S. Connolly, 2000. "Accounting for the Decline in AFDC Caseloads: Welfare Reform or the Economy?," Journal of Human Resources, University of Wisconsin Press, vol. 35(3), pages 570-586.
  25. Neumark, David & Powers, Elizabeth, 2000. "Welfare for the elderly: the effects of SSI on pre-retirement labor supply," Journal of Public Economics, Elsevier, vol. 78(1-2), pages 51-80, October.
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Cited by:

  1. Mills, Bradford F., 2002. "Changes In The Well-Being Of Nonmetropolitan Single-Mother Families: A Semi-Parametric Analysis," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 27(02), December.
  2. James Raymo & Yanfei Zhou, 2012. "Living Arrangements and the Well-Being of Single Mothers in Japan," Population Research and Policy Review, Springer, vol. 31(5), pages 727-749, October.
  3. Chris Herbst, 2013. "Welfare reform and the subjective well-being of single mothers," Journal of Population Economics, Springer, vol. 26(1), pages 203-238, January.
  4. H. Shaefer & Xiaoqing Song & Trina Williams Shanks, 2013. "Do single mothers in the United States use the Earned Income Tax Credit to reduce unsecured debt?," Review of Economics of the Household, Springer, vol. 11(4), pages 659-680, December.
  5. Alexander M. Gelber, 2010. "Taxes and Time Allocation: Evidence from Single Women," 2010 Meeting Papers 1031, Society for Economic Dynamics.
  6. Dahlberg, Matz & Johansson, Kajsa & Mörk, Eva, 2008. "On mandatory activation of welfare receivers," Working Paper Series 2008:24, IFAU - Institute for Evaluation of Labour Market and Education Policy.
  7. Jane Waldfogel, 2007. "Welfare reforms and child well-being in the US and UK," LSE Research Online Documents on Economics 6208, London School of Economics and Political Science, LSE Library.
  8. Hilary W. Hoynes & Diane Whitmore Schanzenbach, 2009. "Consumption Responses to In-Kind Transfers: Evidence from the Introduction of the Food Stamp Program," American Economic Journal: Applied Economics, American Economic Association, vol. 1(4), pages 109-39, October.
  9. Kasey Buckles & Daniel M. Hungerman, 2008. "Season of Birth and Later Outcomes: Old Questions, New Answers," NBER Working Papers 14573, National Bureau of Economic Research, Inc.
  10. Jeffrey R. Kling & Jeffrey B. Liebman & Lawrence F. Katz & Lisa Sanbonmatsu, 2004. "Moving To Opportunity And Tranquility: Neighborhood Effects On Adult Economic Self-Sufficiency And Health From A Randomized Housing Voucher Experiment," Working Papers 247, Princeton University, Woodrow Wilson School of Public and International Affairs, Center for Health and Wellbeing..
  11. Gennetian, Lisa A. & Castells, Nina & Morris, Pamela A., 2010. "Meeting the basic needs of children: Does income matter?," Children and Youth Services Review, Elsevier, vol. 32(9), pages 1138-1148, September.
  12. Mojsoska-Blazevski, Nikica & Petreski, Marjan & Petreska, Despina, 2013. "Increasing labour market activity of poor and female: Let’s make work pay in Macedonia," MPRA Paper 57228, University Library of Munich, Germany.
  13. Corman, Hope & Dave, Dhaval M. & Reichman, Nancy E., 2014. "Effects of welfare reform on women's crime," International Review of Law and Economics, Elsevier, vol. 40(C), pages 1-14.
  14. Gao, Qin & Zhai, Fuhua & Garfinkel, Irwin, 2010. "How Does Public Assistance Affect Family Expenditures? The Case of Urban China," World Development, Elsevier, vol. 38(7), pages 989-1000, July.
  15. Jane Waldfogel, 2007. "Welfare Reforms and Child Well-Being in the US and UK," CASE Papers /126, Centre for Analysis of Social Exclusion, LSE.
  16. Herbst, Chris M., 2014. "Are Parental Welfare Work Requirements Good for Disadvantaged Children? Evidence from Age-of-Youngest-Child Exemptions," IZA Discussion Papers 8485, Institute for the Study of Labor (IZA).
  17. Hui Li & Mukti Upadhyay, 2008. "Has the 1996 Welfare Reform Reduced the U.S. Poverty Rate? An Empirical Analysis Using Panel Data," Economics Bulletin, AccessEcon, vol. 9(2), pages 1-4.

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