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Friday, March 1, 2013

Welfare, Work, and Poverty Status of Female- Headed Families with Children: 1987-2011

Thomas Gabe
Specialist in Social Policy

Sixteen years have passed since repeal of what was the nation’s major cash welfare program assisting low-income families with children, the Aid to Families with Dependent Children (AFDC) program, and its replacement with a block grant of Temporary Assistance for Needy Families (TANF). This report focuses on trends in the economic well-being of female-headed families with children, the principal group affected by the replacement of AFDC with TANF. Female-headed families and their children are especially at risk of poverty, and children in such families account for well over half of all poor children in the United States. For these reasons, single female-headed families continue to be of particular concern to policymakers. The report details trends in income and poverty status of these families, prior and subsequent to enactment of the 1996 welfare reform law and other policy changes. The report focuses especially on welfare dependency and work engagement among single mothers, a major dynamic that welfare reform and accompanying policy changes have attempted to affect. It also examines the role of programs other than TANF in providing support to single female-headed families with children.

CRS analysis of 25 years of U.S. Census Bureau data shows that there has been a dramatic transformation with regard to welfare, work, and poverty status of single mothers. The period has seen a marked structural change in the provision of benefits under a number of programs that contribute to the fabric of the nation’s “income safety net.” In turn, single mothers’ behavior has changed markedly over the period; more mothers are working and fewer are relying on cash welfare to support themselves and their children.

In the years immediately preceding 1996 welfare reform, and in the years since, the nation’s income safety net has been transformed into one supporting work. Cash-welfare work requirements, the end of cash welfare as an open-ended entitlement by limiting the duration that individuals may receive federally funded benefits, and expanded earnings and family income supplements administered through the federal income tax system have helped to change the dynamics between work and welfare. The transformed system has helped to both reduce single mothers’ reliance on traditional cash welfare and reduce poverty among their children.

Poverty under the official U.S. poverty measure, which is based on pre-tax cash income, shows that since 2000, which marked an historical low, the poverty rate among single mothers has increased in step with two recessions. In 2011, the official poverty rate for single mothers, at a post-2000 high, was still well below pre-1996 welfare reform levels, largely due to single mothers’ increased work. Using a more comprehensive income definition than that used by the official poverty measure indicates that the increase in poverty among single mothers and their children over the past 11 years has been substantially mitigated by Food Stamp/SNAP benefits and work-related refundable tax credits—benefits not captured by the “official” poverty measure. Among other actions taken in response to the recession, Congress increased SNAP benefits and extended the reach of refundable tax credits. Use of an expanded income poverty measure that includes these benefits highlights effects of congressional action that helped reduce child poverty amidst, and subsequent to, the most severe recession since the Great Depression.

The role of work-conditioned benefits, and the provision of traditional cash welfare, will likely come under increased attention given the slow pace of economic recovery, the federal and state budget deficits, and a dearth of jobs.

Date of Report: January 9, 2013
Number of Pages: 117
Order Number: R41917
Price: $29.95

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