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The Impact of Welfare Reform on Living Arrangements

Author

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  • Marianne P. Bitler
  • Jonah B. Gelbach
  • Hilary W. Hoynes

Abstract

Labor market outcomes of welfare reform have been the subject of extensive research by economists, but there has been relatively little work on living arrangements, which was an important focus of reformers. Our research fills that gap by using data from the March CPS to examine the impacts of 1990s welfare waivers and the 1996 Federal welfare reform on living arrangements in samples of both children and women. Our findings suggest three main conclusions. First, welfare reform has had large effects on some important measures of living arrangements, including household size, parental co-residence among children, and marital status among women. Second, those effects are neither entirely aligned with the stated goals of reform nor entirely in spite of these goals. For example, in states that never had waivers, TANF was associated with a reduction of 14 percentage points in the fraction of Black children living in central cities who live with an unmarried parent. However, the fraction of these children living with neither parent rose by 8 percentage points, essentially doubling the baseline level. Third, there is a great deal of treatment heterogeneity both with respect to racial and ethnic groups, and with respect to whether reforms were waivers, TANF in states that had waivers, or TANF in states that did not (e.g., waiver effects on parental co-residence among Black, central-city children was much smaller than were TANF effects). Standard approaches - using only data on adult women, pooling the data across racial and ethnic groups, focusing only on high school dropouts, and/or assuming that TANF effects are the same in waiver and nonwaiver states - would generally not uncover these important changes in living arrangements.

Suggested Citation

  • Marianne P. Bitler & Jonah B. Gelbach & Hilary W. Hoynes, 2002. "The Impact of Welfare Reform on Living Arrangements," NBER Working Papers 8784, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:8784
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    References listed on IDEAS

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    1. Moffitt, Robert, 1992. "Incentive Effects of the U.S. Welfare System: A Review," Journal of Economic Literature, American Economic Association, vol. 30(1), pages 1-61, March.
    2. Gabor Kezdi, 2005. "Robus Standard Error Estimation in Fixed-Effects Panel Models," Econometrics 0508018, EconWPA.
    3. Wei-Yin Hu, 2001. "Welfare and Family Stability: Do Benefits Affect When Children Leave the Nest?," Journal of Human Resources, University of Wisconsin Press, vol. 36(2), pages 274-303.
    4. Rebecca London, 1998. "Trends in single mothers’ living arrangements from 1970 to 1995: Correcting the Current Population Survey," Demography, Springer;Population Association of America (PAA), vol. 35(1), pages 125-131, February.
    5. Jeffrey Grogger & Charles Michalopoulos, 2003. "Welfare Dynamics under Time Limits," Journal of Political Economy, University of Chicago Press, vol. 111(3), pages 530-554, June.
    6. John M. Fitzgerald & David Ribar, 2001. "The Impact of Welfare Waivers on Female Headship Decisions," JCPR Working Papers 247, Northwestern University/University of Chicago Joint Center for Poverty Research.
    7. Ann E. Horvath-Rose & H. Elizabeth Peters, 2000. "Welfare Waivers and Non-Marital Childbearing," JCPR Working Papers 128, Northwestern University/University of Chicago Joint Center for Poverty Research.
    8. Schoeni, R.F. & Blank, R.M., 2000. "What Has Welfare Reform Accomplished? Impacts on Welfare Participation, Employment, Income, Poverty, and Family Structure," Papers 00-02, RAND - Labor and Population Program.
    9. Rebecca M. Blank, 2001. "What Causes Public Assistance Caseloads to Grow?," Journal of Human Resources, University of Wisconsin Press, vol. 36(1), pages 85-118.
    10. 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.
    11. Heckman, James J. & Robb, Richard Jr., 1985. "Alternative methods for evaluating the impact of interventions : An overview," Journal of Econometrics, Elsevier, vol. 30(1-2), pages 239-267.
    12. Schoeni, R.F. & Blank, R.M., 2000. "What Has Welfare Reform Accomplished? Impacts on Welfare Participation, Employment, Income, Poverty, and Family Structure," Papers 00-02, RAND - Labor and Population Program.
    13. Robert A. Moffitt, 1999. "The Effect of Pre-PRWORA Waivers on AFDC Caseloads and Female Earnings, Income, and Labor Force Behavior," JCPR Working Papers 89, Northwestern University/University of Chicago Joint Center for Poverty Research.
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    More about this item

    JEL classification:

    • I3 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty
    • J1 - Labor and Demographic Economics - - Demographic Economics

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