NCPA - National Center for Policy Analysis

Welfare Reform Curbed Single-Mothers' Poverty

April 10, 2003

Between the passage of the 1996 welfare reforms and 2001 -- a recession year -- the poverty rate of single-mother families declined by about 20 percent, from 41.9 percent in 1996 to 33.6 percent. This was slightly above the record low for single mothers attained in 2000. The poverty decline is in large part a by-product of the transition from welfare to work induced by welfare reform, according to a report by the Manhattan Institute.

The reduction in poverty was particularly large among those groups of single mothers who have always had the highest levels of poverty and welfare participation -- black and Hispanic women, never-married mothers and high school dropouts.

In fact, welfare reform led to a surge in the employment of single mothers:

  • The proportion of single mothers who worked at all during the year increased rapidly, from 76 percent in 1996 to 82 percent in 2001.
  • The proportion who worked half of a full year or more increased from 60 percent to 70 percent, and the proportion working a full year increased from 44 percent to 52 percent.
  • Welfare reform was the largest single factor responsible for the rise in single mothers' work participation, accounting for more than 40 percent of the increase between mid-1996 and the end of 2001.
  • Only about 9 percent of the employment gain is attributable to the expansion of the economy during that period.

Single mothers' own cash incomes rose 21 percent between 1995 and 2000, even after averaging in those reporting zero cash income.

Single mothers of all demographic groups, including high school dropouts, experienced similar gains. These income gains occurred because the rise in the employment of single mothers resulted in earnings gains that far outweighed their loss in welfare benefits.

Source: June O'Neill and M. Anne Hill, "Gaining Ground, Moving Up: The Change in the Economic Status of Single Mother Under Welfare Reform," Civic Report 35, March 2003, Manhattan Institute.

For report text http://www.manhattan-institute.org/html/cr_35.htm

 

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