When the welfare system was overhauled 25 years ago, many experts predicted that it would destroy families, especially those run by single mothers. But data on what households can buy, including where they live and whether they have health insurance, suggests that needy families with single mothers have made economic progress.
This emerges from the working paper “Consumption, Income and Welfare of Single Families with Single Mother 25 Years After Social Reform”, a working paper of the National Bureau of Economic Research. The full report will be published this month by the National Tax Journal.
This quarter century welfare reform milestone comes at a time when nearly 90% of Americans themselves have received direct federal aid in the form of three rounds of stimulus payments to help them weather the effects of the pandemic.
While some research suggests that families’ living conditions have deteriorated since government welfare reform put work and education above unconditional aid, study authors include Bruce D. Meyer of the University of Chicago, Jeehoon Han of Zhejiang University in China and James X. Sullivan of the University of Notre Dame believe this is largely due to insufficient reporting of the support single mothers receive. They say families might be in worse shape than they are because benefits from Temporary Assistance for Families in Need, the Supplemental Nutrition Assistance Program, and other safety net programs that provide vital assistance could be removed from self-certification.
Her research shows that single mothers today are likely to live in homes that are comparable in quality to middle-class families at the time of social reform a quarter of a century ago, although not necessarily comparable to those of the middle class today. More of them have health insurance and their “consumption ability” has increased overall.
This is “strong evidence” that the material circumstances of these families have improved since the social reform, with the purchasing power of the most disadvantaged families increasing more clearly and faster than in the comparison groups.
Still, it’s important to note that the families in the study “are among the most disadvantaged and least affluent families in the country,” said Meyer, an economist who is also a research fellow at the National Bureau of Economic Research and a non-resident Senior Fellow at the American Enterprise Institute. The study found that the average total annual use of a single mother with two children in the bottom 10% was about $ 14,000 in 2019.
The families examined can be classified as “working poor”, but still not as low-income as they used to be. “Their prospects are better because they work and live in better conditions than they would otherwise have been,” Meyer told Deseret News.
Social reform 1996
When President Bill Clinton signed the Personal Responsibility and Job Opportunities Reconciliation Act in 1996, many predicted the reforms would have dire consequences. Lawyer Senator Daniel Patrick Moynihan, DN.Y., warned it could result in children being found frozen on the city’s bars.
There have been valid concerns that changing a system from unconditional support to one with support primarily for those who may not benefit from all work incentives could be severely penalized, Meyer said.
Aspects of the reform package for these low-income families include, among other things, income tax breaks, childcare allowances, vocational training and the expansion of Medicaid.
The welfare reform essentially changed cash benefits into flat-rate grants “which tended to include more spending on childcare and education and less on direct money. The total number of families helped has declined quite a bit during that time, but we’ve also dramatically expanded income tax breaks, increased Medicaid for children and, to a lesser extent, adults, and increased spending on childcare and education, “Meyer said.
Most of the help went to working single mothers, although Meyer said some help was still available for those who were unable to work for various reasons.
As ProPublica recently reported, the law froze federal funds available to states to help the poor and they have “not increased since then to take into account inflation or changes in population or poverty rates.” The article cited demographics as well as the impact of higher cost of living on families.
Single motherhood has also changed in the years since the social reform. Meyer said single mothers have become more educated and the proportion with less than a high school diploma has halved. The proportion of Hispanic Americans has doubled.
Meyer said his research team has not taken in women who live together even though they are technically single. They studied families with children and only one adult at home.
The report also does not include homeless people or prisoners, “two particularly disadvantaged groups of the population”.
What consumption shows
The trio of researchers decided that the best evidence of the material circumstances of families with single mothers is what they can buy in terms of shelter, food and clothing, and whether they can afford transportation and utilities. They looked at data from the Bureau of Labor Statistics between 1993, the years immediately preceding the reform, through 2019.
The workforce with a low level of education rose from 45% to 70% from the early 1990s to the late 1990s, Meyer said, and their money supply halved during that time.
He said the houses and apartments that the families receiving aid now live in are overall much nicer than they were before the social reform. “You are much more likely to have air conditioning, a dishwasher, a washer and dryer in the unit. They are bigger and much less likely to have leaks or cracks in the walls or holes in the floor. All of these things have improved dramatically. For me this is the most tangible and best measured indicator that people’s standard of living has risen sharply. “
Meyer said they checked education to make sure social reform, not an increase in general education, made the difference.
Was it welfare reform?
In an analysis for the Institute for Family Studies, Robert VerBruggen, an institute fellow and fellow at the Manhattan Institute, describes the new research as “a solid blow to the ‘maddening extreme poverty’ theory that has taken hold in the past five years. ”
He wrote: “There are many consequences of social reform, some good and some bad, but as this new paper shows, driving many families into extreme poverty is unlikely to be part of it.”
Not everyone welcomes welfare reform as a great success for impoverished families.
In Pennsylvania, for example, WITF TV reported that a coalition called Meet the Need, made up of many people who received or have received help, believes the safety net is breaking down. They suggest families need more monetary aid, better education programs, a smoother transition when starting work, and that families should be able to save more than the $ 1,000 cap.
Among those who have seen improvements in the living standards of single mothers since the 1990s, there are alternative theories as to what has helped.
For example, on the 20th anniversary of welfare reform, Alan Barber of the Center for Economic and Political Research reported that full employment was in progress before Congress passed welfare reform, and that this was likely to make up most of the profits.
In an online symposium for the Council on Contemporary Families in 2016, he noted that data from the current population survey and the Department of Health and Human Services TANF case report “tell a simple story. Unmarried mothers with a high school diploma or less increased their employment rate by almost 40 percentage points from the beginning to the end of the 1990s. “
He said the trend “started long before the 1996 welfare reform, suggesting that politics was not the cause of the increase, but that other macroeconomic forces were helping these families do better”.
He wrote that “data, not ideology, will help us reduce poverty”.
Some experts – including a much-cited group at Columbia University – believe the recent pandemic poverty in the US would have been much worse without the federal government’s economic aid from the Trump and Biden administrations.
“Aside from Social Security, the Census Bureau reports that three key elements of pandemic relief have had the greatest impact on poverty reduction, saving tens of millions of Americans from poverty over the past year. Economic Impact Payments (or Stimulus Checks) saved 11.7 million people from poverty, unemployment benefits saved 5.5 million people from poverty, and the Supplemental Nutrition Assistance Program (SNAP) and school lunches (both also include extended benefits under the Pandemic EBT program) saved 3.2 million people from poverty in 2020 alone. They also reduced hardship, including food insecurity, for millions more, “Columbia’s Center on Policy and Social Policy reported this week.
Meyer hopes that policymakers and others will recognize that a combination of extra support at work for individuals combined with the expectation that people will do things to improve their lives – like work or training or education – can work.
“The current tendency to write checks unconditionally is not necessarily the best way to go. While this will have some positive effects in raising people’s living standards, it will discourage more beneficial measures to improve their living conditions through work, education or training, or taking greater responsibility for their own living conditions in general, ”he said.