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

  • Bruce D. Meyer
  • James X. Sullivan

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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  13. 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.
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  22. Bruce D. Meyer, 2002. "Labor Supply at the Extensive and Intensive Margins: The EITC, Welfare, and Hours Worked," American Economic Review, American Economic Association, vol. 92(2), pages 373-379, May.
  23. David Neumark & Elizabeth Powers, 1998. "Welfare for the Elderly: The Effects of SSI on Pre-Retirement Labor Supply," NBER Working Papers 6805, National Bureau of Economic Research, Inc.
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  29. Michael P. Keane, 1995. "A new idea for welfare reform," Quarterly Review, Federal Reserve Bank of Minneapolis, issue Spr, pages 2-28.
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