Welfare, Work, and Poverty Status of Female-Headed Families with Children: 1987-2013
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Welfare, Work, and Poverty Status of FemaleHeaded Families with Children: 1987-2013
(name redacted)
Specialist in Social Policy
November 21, 2014
Congressional Research Service
7-....
www.crs.gov
R41917
Welfare, Work, and Poverty Status of Female-Headed Families with Children: 1987-2013
Summary
Eighteen 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 27 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 a historical low, the poverty rate among single mothers increased
in step with two recessions. By 2010, the official poverty rate for single mothers had reached a
post-2000 high, and remained at that level through 2012, before falling somewhat in 2013. In
2013, the official poverty level was still below pre-1996 welfare reform levels, despite two
recessions since 1996.
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 13
years has been substantially mitigated by Food Stamp/SNAP benefits and work-related
refundable tax credits—benefits not captured by the “official” poverty measure. 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
continue to garner attention, in part contingent on the nature and pace of economic recovery, and
federal and state budget pressures.
Congressional Research Service
Welfare, Work, and Poverty Status of Female-Headed Families with Children: 1987-2013
Contents
Introduction...................................................................................................................................... 1
A Road Map ..................................................................................................................................... 2
Female-Headed Families with Children—A Policy Concern .......................................................... 3
Policy Landscape on the Eve of 1996 Welfare Reform ................................................................... 6
Welfare Dependency as a Political Theme ................................................................................ 7
EITC Expansions—“Making Work Pay” .................................................................................. 8
TANF and Other Policies in the Post-AFDC Era ............................................................................ 9
Other Federal and State Policies that Encourage Work ........................................................... 10
Child Support Enforcement ..................................................................................................... 11
Policies Addressing Marriage and Childbearing ..................................................................... 12
Policy Responses to Changing Economic Conditions ................................................................... 12
Tax Rebates, Reductions, and Credits ..................................................................................... 13
Unemployment Insurance Benefits ......................................................................................... 14
Supplemental Nutrition Assistance Program (SNAP/Food Stamp) Benefits .......................... 15
Other Social Policies ............................................................................................................... 15
Welfare, Work, and Poverty Status of Female-Headed Families with Children ............................ 16
Number of Families Headed by Single Mothers ..................................................................... 19
Incidence of Poverty by Mothers’ Marital Status .................................................................... 20
Poverty and Cash Welfare Receipt among Single Mothers ..................................................... 21
Work, Poverty, and Cash Welfare Receipt of Single Mothers ................................................. 22
Single Mothers’ Employment ........................................................................................................ 23
Unemployment Rates Across the Business Cycle ................................................................... 25
Poor Single Mothers’ Work and Welfare Status ...................................................................... 26
Receipt of Selected Benefits by “Earnings Poor” Female-Headed Families with Children .......... 28
Earned Income Tax Credit (EITC) .......................................................................................... 28
Supplemental Security Income (SSI) ...................................................................................... 29
Unemployment Insurance (UI) Benefits.................................................................................. 30
Food Stamp/Supplemental Nutrition Assistance Program (SNAP) Benefits .......................... 30
Additional Child Tax Credit (ACTC) ...................................................................................... 31
Anti-Poverty Effects of Cash Income, Taxes, and Transfers on Poverty—Female-Headed
Families with Children ............................................................................................................... 31
Addition of Income from Sources Not Included in the “Official” U.S. Poverty
Measure ................................................................................................................................ 34
Effect of Earnings and Other Non-welfare Cash Income on Poverty...................................... 34
Effect of Cash Welfare on Poverty .......................................................................................... 35
The Invisible Safety Net—Effect on Poverty of Counting Selected Income Sources
Not Included in the “Official” Poverty Measure .................................................................. 35
Effect of Food Stamp/SNAP Benefits on Poverty............................................................. 35
Net Effect of the EITC on Poverty .................................................................................... 36
Effect of the ACTC on Poverty ......................................................................................... 37
Effect of Federal Economic Stimulus and Recovery Payments and Making Work
Pay Tax Credits on Poverty ............................................................................................ 37
Effect of Unrelated Household Members’ Income on Poverty ......................................... 37
Congressional Research Service
Welfare, Work, and Poverty Status of Female-Headed Families with Children: 1987-2013
Comparison of the Effects of Earnings, Transfers, and Taxes on Poverty, by Single
Mothers’ Work Status ........................................................................................................... 37
Single Mothers Who Worked During the Year—Figure 14 .............................................. 38
Single Mothers Who Did Not Work During the Year—Figure 15 .................................... 42
Trend in Poverty among Children in Female-Headed Families under Selected Income
Measures ..................................................................................................................................... 43
Discussion/Conclusion................................................................................................................... 44
The Invisible Safety-Net—Benefits not Officially Counted Toward
Poverty Reduction ................................................................................................................ 45
Transformation of Income Safety-Net Programs Toward Work-Conditioned Support ........... 45
Cash Welfare’s Residual Safety-Net Role ............................................................................... 47
Living Arrangements as an Alternative to Welfare ........................................................... 47
Illness or Disability Among Nonworking Single Mothers ................................................ 49
The Work-Based Income Safety Net in Times of Recession and Recovery ............................ 53
Single Mothers’ Attachment to the Work-Based Safety Net ............................................. 53
The Work-Based “Safety Net” and the Role of Traditional Welfare ................................. 54
Figures
Figure 1. Children’s Poverty Status by Family Living Arrangement, 2013..................................... 4
Figure 2. Number of Recipients and Cases Receiving Cash Assistance Under ADC,
AFDC, 1960 to 1994 .................................................................................................................... 5
Figure 3. Number of Recipients and Cases Receiving Cash Assistance Under ADC,
AFDC, and TANF, 1960 to 2013 ................................................................................................ 17
Figure 4. Poverty Rate of Children Under Age 18 in Female-Headed Households (No
Spouse Present), 1960 to 2013.................................................................................................... 18
Figure 5. Number of Single-Mother Families, by Mothers’ Marital Status, 1987 to 2013 ............ 20
Figure 6. Poverty Rates by Mothers’ Marital Status, 1987 to 2013 ............................................... 21
Figure 7. Single Mothers: Poverty and Cash Welfare Receipt, 1987 to 2013................................ 22
Figure 8. Welfare, Work, and Poverty Status Among Single Mothers, 1987 to 2013 .................... 23
Figure 9. Employment Rates of Single and Married Mothers, by Age of Youngest Child,
March 1988 to March 2014 ........................................................................................................ 24
Figure 10. Unemployment Rate of Women Maintaining Families, January 1987 through
October 2014 .............................................................................................................................. 25
Figure 11. Poor Single Mothers: Work and Welfare Status During the Year, 1987 to 2013 .......... 27
Figure 12. Receipt of Selected Benefits by “Earnings Poor” Female-Headed Families
with Children, 1987 to 2013 ....................................................................................................... 29
Figure 13. Effects of Earnings, Transfers, and Taxes on Family Poverty and Household
Low-Income Status of Single Mothers, 1987 to 2013 ................................................................ 33
Figure 14. Single Mothers Who Worked at Any Time During the Year: Effects of
Earnings, Transfers, and Taxes on Family Poverty and Household Low-Income Status,
1987 to 2013 ............................................................................................................................... 40
Congressional Research Service
Welfare, Work, and Poverty Status of Female-Headed Families with Children: 1987-2013
Figure 15. Single Mothers Who Did Not Work During the Year: Effects of Earnings,
Transfers, and Taxes on Family Poverty and Household Low-Income Status, 1987 to
2013 ............................................................................................................................................ 41
Figure 16. Poverty Among Children in Female-Headed Families Under
Alternative Measures, 1987 to 2013 ........................................................................................... 44
Figure 17. Single Mothers’ Living Arrangements, by Mothers’ Work and Welfare Status............ 49
Figure 18. Single Mothers Who Did Not Work During the Year, by Self-Reported Reason
for Not Working .......................................................................................................................... 50
Figure 19. Nonworking Single Mothers with Self-Reported “Illness or Disability” as the
Primary Reason for Not Working, by Cash Welfare Recipiency Status ..................................... 52
Figure 20. Single Mothers’ Job Attachment,1987 to 2013 ............................................................ 54
Figure B-1. AFDC/TANF Cases: CPS Estimates Versus Administrative Caseload Counts
(Annual Monthly Average), 1987 to 2013 .................................................................................. 63
Tables
Table B-1. AFDC/TANF Cases: CPS Versus Administrative Caseload Counts, Annual
Monthly Average, 1987 to 2013 ................................................................................................. 64
Table C-1. Children’s Family Living Arrangements and Poverty Status, 1987 to 2013 ................ 66
Table C-2. Number of Recipients and Cases Receiving Cash Assistance Under ADC,
AFDC, and TANF, 1960 to 2013 ................................................................................................ 74
Table C-3. Poverty Among Related Children Under Age 18, All Children and Children in
Female-Headed Households (No Spouse Present) 1960 to 2013 ............................................... 76
Table C-4. Mothers with Related Children Under Age 18, by Poverty and Marital Status,
1987 to 2013 ............................................................................................................................... 78
Table C-5. Single Mothers: Poverty and Cash Welfare Receipt, 1987 to 2013 ............................. 80
Table C-6. Welfare, Work, and Poverty Status Among Single Mothers, 1987 to 2013 ................. 81
Table C-7. Employment Rates of Single and Married Mothers, by Age of Youngest
Child, March 1988 to March 2014 ............................................................................................. 82
Table C-8. Monthly Unemployment Rate of Women Who Maintain Families, January
1987 to October 2014 ................................................................................................................. 83
Table C-9. Poor Single Mothers: Work and Welfare Status During the Year, 1987 to 2013.......... 84
Table C-10. Receipt of Selected Benefits by Female-Headed Families with Children, All
Families and “Earnings Poor” Families, 1987 to 2013 ............................................................... 85
Table C-11. Effect of Earnings, Transfers, and Taxes on Family Poverty and Household
Low-Income Status, All Single Mothers, 1987 to 2013.............................................................. 88
Table C-12. Effect of Earnings, Transfers, and Taxes on Family Poverty and Household
Low-Income Status, Single Mothers Who Worked at Any Time During the Year, 1987
to 2013 ........................................................................................................................................ 90
Table C-13. Effect of Earnings, Transfers, and Taxes on Family Poverty and Household
Low-Income Status, Single Mothers Who Did Not Work at Any Time During the Year,
1987 to 2013 ............................................................................................................................... 92
Congressional Research Service
Welfare, Work, and Poverty Status of Female-Headed Families with Children: 1987-2013
Table C-14. Single Mothers’ Living Arrangements, by Mothers’ Work and Welfare Status,
1987 to 2013 ............................................................................................................................... 94
Table C-15. Single Mothers’ Work Status During the Year and Self-Reported Reason for
Not Working, by Cash Welfare (AFDC/TANF/GA SSI) Receipt, 1987 to 2013 ....................... 99
Table C-16. Poverty Status of Children in Female-Headed Families Under Selected
Income Measures, 1987 to 2013 ............................................................................................... 107
Table C-17. Single Mothers’ Job Attachment, 1987 to 2013 ....................................................... 109
Appendixes
Appendix A. From Mothers’ Pensions to TANF—A Brief History ............................................... 56
Appendix B. Cash Welfare Under-Reporting on the CPS ............................................................. 63
Appendix C. Support Tables .......................................................................................................... 66
Contacts
Author Contact Information......................................................................................................... 111
Congressional Research Service
Welfare, Work, and Poverty Status of Female-Headed Families with Children: 1987-2013
Introduction
Eighteen 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.
Since at least the first White House Conference on Children in 1909 (Conference on the Care of
Dependent Children), and the subsequent creation of the Children’s Bureau in 1912, the federal
government has been concerned with the social conditions of children. The conference was an
impetus for states’ enactment of state or locally financed mothers’ pensions (also referred to as
widows’ pensions and/or mothers’ aid), which provided minimal cash support to mothers made
destitute, usually due to a husband’s death. Mothers’ aid was intended to help keep the mother at
home to care for her children, as an alternative to institutionalization or adoption. As part of the
Social Security Act of 1935, the federal Aid to Dependent Children (ADC) program introduced
federal involvement in helping provide financial aid, or “public assistance,” to aid dependent
children, basically as a supplement to states’ mothers’ pension programs. Federal involvement in
attempting to address the problem of child poverty associated with the loss of parental support
grew over the next 61 years, at which point the AFDC program, formerly named ADC, was
repealed and replaced by Temporary Assistance for Needy Families (TANF).
Two dominant, often conflicting, themes have pervaded public discourse and policy responses to
providing public assistance to poor families with children. One has been to help improve the
economic and social well-being of children who, through no fault of their own, live in poor
circumstances. The other has been reducing welfare dependency. A persistent challenge has been
how public policy and programs can address the first theme of reducing child poverty without
undermining the second by encouraging welfare dependency. A major goal of social policy, at
least since passage of the 1967 Social Security Act welfare amendments, has been to reduce
welfare dependency and, as a consequence, child poverty, by encouraging work. This report
focuses on the results of efforts to attain these goals, focusing on female-headed families with
children.
CRS analysis of 27 years of U.S. Census Bureau data1 presented in this report shows a dramatic
transformation in single mothers’ welfare, work, and poverty status over the period. The period
1
Most data presented in this report are based on CRS analysis of 27 years of data from the U.S. Census Bureau’s
Annual Social and Economic Supplement to the Current Population Survey (CPS/ASEC). The CPS/ASEC is the
principal source for annual income, poverty, and health insurance coverage estimates issued by the Census Bureau. The
annual survey is a supplement to the monthly CPS conducted for the U.S. Bureau of Labor Statistics (BLS) used in
deriving monthly labor force statistics, such as the national unemployment rate. Estimates from the annual supplement,
(continued...)
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Welfare, Work, and Poverty Status of Female-Headed Families with Children: 1987-2013
examined encompasses a fundamental transformation in the provision of income support through
cash welfare to a system promoting and supplementing work. The period has been marked by
three recessions, one in the pre-welfare reform era (1990-1991), and two after (2001; 2007-2009);
the latter was so severe that it has come to be identified by many as “The Great Recession.”2
Policy interventions to both stimulate the economy and protect those most vulnerable in response
to the most recent recession are examined in the context of their effects on families headed by
single mothers. The 27-year period examined provides for a range of insights about social
programs’ and policies’ effects, under varying economic conditions, on families headed by single
mothers—a group at considerable risk of poverty.3
A Road Map
The body of the report begins with a brief discussion as to why female-headed families with
children are a focus of policy concern. Most directly, children living in such families are many
times more likely to be poor than children in married-couple families. Moreover, the families in
which they reside have been especially likely to depend on public assistance (i.e., welfare) for at
least part of their financial support.
The dual goals of reducing child poverty and breaking the bonds of welfare dependency have
proven to be an enduring, and often vexing, policy challenge. The report briefly describes the
policy landscape prior to 1996 welfare reform and policy changes that have occurred since—
especially those that were undertaken in response to the recent recession. A brief, 100-year
historical perspective as to how past policy efforts attempted to address the dual problems of
child poverty and welfare dependency is presented in Appendix A.
The report then turns to an empirical analysis of trends in single mothers’ work, welfare, and
poverty status over the 27-year period from 1987 to 2013. Trends in the incidence of poverty and
cash welfare receipt and work among single mothers are presented, as are trends in cash welfare
receipt (ADC, AFDC, and TANF) and other selected benefits. Particular attention is paid to the
role of selected income sources on poverty reduction among single-mother families, overall and
by whether or not mothers worked during the year. Some sources of income are not included in
the “official” U.S. poverty measure, which is based on pre-tax cash income. The analysis shows
that the inclusion of other income sources not included in the official measure, such as Food
Stamp or Supplemental Nutrition Assistance Program (SNAP) benefits and refundable federal
income tax credits, has a significant effect on poverty reduction among single mothers and their
children. The inclusion of such benefits yields a very different picture as to the apparent trend in
poverty, especially when viewed in the context of the most recent recession.
(...continued)
conducted in February through April, represent characteristics at the time of the survey, and income, poverty, and
health insurance status in the previous year. The analysis is limited to survey data collected from 1988 through 2014
(the most recent available), representing income and poverty status from 1987 through 2013. The CPS/ASEC analysis
in this report is limited to the past 27 years due to relative consistency in design and content of the CPS/ASEC over the
period.
2
See, for example, Catherine Rampell, “‘Great Recession’: A Brief Etymology,” New York Times (internet edition),
March 11, 2009, available at http://economix.blogs.nytimes.com/2009/03/11/great-recession-a-brief-etymology/.
3
Single fathers and their children have received comparatively little study, nor have they emerged as a matter of policy
concern, as have single mothers and their children.
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Welfare, Work, and Poverty Status of Female-Headed Families with Children: 1987-2013
A final section of the report offers a concluding discussion. It highlights the transformation from
income safety net to work-conditioned support, and cash welfare’s resulting residual safety net
role. It assesses the effectiveness of income safety net programs in reducing poverty among
female-headed families, especially in the context of the recent recession and selected
congressional action.
The report contains three appendixes. Appendix A provides a brief history of the AFDC
program—the precursor to TANF. Appendix B examines under-reporting of cash welfare on the
CPS/ASEC relative to administrative benchmarks. Appendix C provides data underlying the
figures presented in the body of the report.
Female-Headed Families with Children—
A Policy Concern
Two dominant, often conflicting, themes have pervaded public discourse and policy responses to
providing public assistance to poor families with children. One has been to help improve the
economic and social well-being of children who, through no fault of their own, live in poor
circumstances. The other has been to reduce welfare dependency and to promote parental
responsibility and family self-sufficiency. A persistent challenge has been how public policy and
programs can address the first theme of reducing child poverty without undermining the second
by encouraging welfare dependency.
Children living in families headed by single mothers with no spouse present are especially at risk
of being poor. In 2013, under the official U.S. poverty measure,4 about one-fifth of all children
were poor (19.8%), but among children living in single-mother families, well over two-fifths
(44.1%) were poor, compared to about one in ten children (9.5%) living in married-couple
families (See Figure 1).5 In 2013, one in four children (25.6%) lived in female-headed families,
but children in such families accounted for well over half (57.0%) of all poor children (see
bottom panel of Figure 1). About one in eight children (12.9%) live in families headed by single
mothers who have never been married; about half of all such children were poor in 2013 (52.6%),
and they accounted for about one third (34.3%) of all poor children.
4
The official U.S. statistical poverty measure is based on families’ annual pre-tax income relative to family poverty
income thresholds, which vary by family size and composition. For example, in 2013, a family consisting of a single
mother with one child was considered poor if its annual pre-tax cash income was less than $16,057, and if she had two
children, she and her children would be considered poor if her family income was below $18,769. In turn, a married
couple with one child would be considered poor if the family’s income was less than $18,751, and if they had two
children, if its income was less than $23,707.
5
The definition of “children” used here represents dependent children under the age of 18 who are related to another
family member by birth or adoption. It excludes children who are unrelated to other household members, and excludes
persons under the age of 18 who, themselves, have a dependent child residing with them.
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Welfare, Work, and Poverty Status of Female-Headed Families with Children: 1987-2013
Figure 1. Children’s Poverty Status by Family Living Arrangement, 2013
Share of Children by Family Living Arrangements
All Children
Poor Children
Source: Prepared by the Congressional Research Service (CRS) based on analysis of U.S. Census Bureau 2014
Current Population Survey (CPS) Annual Social and Economic Supplement (ASEC) data.
Table C-1 for supporting data.
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Welfare, Work, and Poverty Status of Female-Headed Families with Children: 1987-2013
Figure 2 shows the number of recipients (total, children, and adults) and cases (families, and
child-only cases) receiving cash assistance under AFDC (ADC, prior to 1962) from 1960 to 1994,
the eve of the 1996 welfare reform debate. The AFDC caseload was comprised almost entirely of
women with no husband present and their children.
Figure 2. Number of Recipients and Cases
Receiving Cash Assistance Under ADC, AFDC,
1960 to 1994
(Annual monthly average, in millions)
Millions
15
Recipients
14
13
12
11
10
Children
9
8
7
6
5
Cases
Adults
4
3
2
1
0
1960
1965
1970
1975
1980
1985
1990
1995
2000
2005
2010
Year
Source: Figure prepared by the Congressional Research Service (CRS) from the Department of Health and
Human Services (DHHS), Office of Family Assistance (OFA). See Table C-2 for supporting data.
Note: Includes enrollment in the 50 states, the District of Columbia, Guam, Puerto Rico, and the Virgin Islands.
The surge in recipients and cases over the course of the 1960s reflects a variety of factors,
including the baby boom generation entering adulthood; an increase in the number and share of
children living in female-headed families with a high likelihood of being poor; a rediscovery of
poverty in the United States and resultant efforts to address its causes and consequences; and
outreach efforts by government and organizations to aid the poor by helping to ensure that they
were treated fairly and received benefits to which they were entitled. Additionally, during the late
1960s and early 1970s, U.S. Supreme Court rulings overturned a number of state practices that
had denied providing assistance to entitled individuals. Thus, AFDC caseload growth over the
period reflected both a growth in the number of persons legally entitled to receive benefits and
also an increasing likelihood that legally entitled individuals would be granted benefits. From
1966 to 1971, the number of AFDC recipients would more than double, from 4.5 million to 10.2
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Welfare, Work, and Poverty Status of Female-Headed Families with Children: 1987-2013
million persons. By one estimate, by 1971 90% of families eligible to receive AFDC were
participating in the program, compared to only about 33% in the early 1960s.6 As the AFDC
caseload was increasing, Congress began taking action in an attempt to restrict its growth. Among
its provisions, amendments to the Social Security Act in 1967 sought to restrict AFDC caseload
growth through the establishment of work and training requirements for adult recipients, and an
effort to freeze federal matching payments to states with additional caseload growth attributable
to cases with an absent parent (i.e., other than widows, or disabled parents). (See Appendix A for
a brief history of the AFDC program.)
Policy Landscape on the Eve of 1996 Welfare Reform
A variety of welfare reforms were already beginning to be implemented by states in the years
preceding the more sweeping reforms that would be allowed under the 1996 welfare reform law.
The Family Support Act of 1988 (P.L. 100-485) extended work requirements (which could
include work preparation activities such as education and training) for mothers with a child as
young as six to mothers with a child as young as three and, at a state’s option, extended work
requirements to mothers with a child as young as age one. A number of states experimented with
changes to welfare policy under waiver authority granted to the Secretary of the Department of
Health and Human Services (DHHS).7 Among the features of state programs tested under waiver
authority were efforts to strengthen work requirements, experiments requiring a “work first”
approach rather than “training first, followed by work,” time limits, strengthened sanctions for
noncompliance with welfare rules, and capping of welfare benefits for a new baby conceived or
born while a mother was receiving welfare. In addition, eligibility and funding for child care were
expanded, helping to make work possible for mothers who otherwise might have difficulty
finding affordable child care. The Family Support Act expanded eligibility for child care
assistance in the form of transitional child care assistance for families working their way off
AFDC, as well as for families “at risk” of qualifying for AFDC. In 1990, federally funded child
care assistance was extended to low-income families generally, not just those receiving or at risk
of receiving welfare, under the Child Care and Development Block Grant (CCDBG).
The numbers of cases and persons receiving AFDC remained relatively level during the 1970s
and most of the 1980s, but began to rise again in 1989 just prior to the onset of an eight-month
long economic recession that was marked as beginning in July 19908 (see Figure 2, above). From
1988 to 1994, the number of persons receiving AFDC would increase by 30%—a much larger
increase than might be expected from the recession alone.9 The caseload increase contributed to
6
James T. Patterson, America’s Struggle Against Poverty, 1900-1985 (Cambridge, MA: Harvard University Press,
1986), p. 179.
7
Section 1115 of the Social Security Act grants the Secretary authority to waive compliance of states with certain
sections of the Social Security Act for state experiments or demonstrations that the Secretary judges to promote specific
objectives of the act.
8
Economic recessions are defined by the National Bureau of Economic Research (NBER) Business Cycle Dating
Committee.
9
For analyses of AFDC caseload growth over this period, see CRS Report 93-7, Demographic Trends Affecting Aid to
Families with Dependent Children (AFDC) Caseload Growth, by (name redacted) (archived report, available to
congressional clients upon request); also, Janice Peskin, Forecasting AFDC Caseloads, with an Emphasis on Economic
Factors, Congressional Budget Office Staff Memorandum, July 1993; and, Rebecca Blank, “What Causes Public
Assistance Caseloads to Grow?,” Journal of Human Resources, vol. 36, no. 1 (Winter 2001), pp. 85-118.
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Welfare, Work, and Poverty Status of Female-Headed Families with Children: 1987-2013
new calls for welfare reform—and welfare reform would once again move into the policy
spotlight.
Welfare Dependency as a Political Theme
In his January 1992 State of the Union Address before a joint session of Congress, President
George H. W. Bush, who would be running for a second term as President, expressed his intention
to make it quicker and easier for states to restructure their welfare programs through the federal
waiver process:
Welfare was never meant to be a lifestyle. It was never meant to be a habit. It was never
supposed to be passed from generation to generation like a legacy. It’s time to replace the
assumptions of the welfare state and help reform the welfare system.
States throughout the country are beginning to operate with new assumptions that when ablebodied people receive Government assistance, they have responsibilities to the taxpayer: A
responsibility to seek work, education, or job training; a responsibility to get their lives in
order; a responsibility to hold their families together and refrain from having children out of
wedlock; and a responsibility to obey the law. We are going to help this movement. Often,
State reform requires waiving certain Federal regulations. I will act to make that process
easier and quicker for every State that asks for our help.10
In September 1992, during a presidential campaign speech, candidate William J. Clinton pledged,
if elected, to “end welfare as we know it.” As reported in the New York Times, he stated:
The changing face of welfare and the changing nature of it, and the enormous barriers of
people moving from welfare to a productive life deserve special attention ... Especially now
that most people on welfare are young women and their little children.... By the time we’re
through, we shouldn’t have a welfare program in America ... We ought to have a helping
hand program followed by a jobs program.11
The previous day, the Clinton campaign began airing a campaign ad in which the candidate stated
his plan to “end welfare as we know it”:
For so long, Government has failed us, and one of its worst failures has been welfare. I have
a plan to end welfare as we know it, to break the cycle of welfare dependency. We’ll provide
education, job training and child care, but even those who are able must go to work, either in
the private sector or in public service.... It’s time to make welfare what it should be—a
second chance, not a way of life.”12
10
Available at http://frwebgate.access.gpo.gov/cgi-bin/getdoc.cgi?dbname=1992_public_papers_vol1_text&docid=
pap_text-79.pdf.
11
Gwen Ifill, “Clinton Presses Welfare Overhaul, Stressing Job Training and Work,” New York Times, September 10,
1992, pp. A1, A19.
12
Richard L. Berke, “The Ad Campaign—Clinton: Getting People Off Welfare,” New York Times, September 10,
1992, p. A-19.
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Nearly 20 welfare reform bills would be introduced in the 103rd Congress,13 but it was not until
June 1994, before the mid-term elections, that President Clinton would unveil his welfare reform
proposal, the Work and Responsibility Act of 1994 (S. 2224, H.R. 4605).
Three months later, House Republicans announced their Contract with America just six weeks
before the mid-term elections. The document, unveiled on September 27, 1994, included wideranging provisions, including changes to House rules, and legislative proposals to address 10
policy domains ranging from fiscal responsibility, crime, national security, and job creation to
welfare reform, among others. In the introduction to the welfare reform provisions, the Contract
viewed the issue as follows:
Isn't it time for the government to encourage work rather than rewarding dependency? The
Great Society has had the unintended consequence of snaring millions of Americans into the
welfare trap. Government programs designed to give a helping hand to the neediest of
Americans have instead bred illegitimacy, crime, illiteracy, and more poverty. Our Contract
with America will change this destructive social behavior by requiring welfare recipients to
take personal responsibility for the decisions they make. Our Contract will achieve what
some thirty years of massive welfare spending has not been able to accomplish: reduce
illegitimacy, require work, and save taxpayers money.14
The Contract’s welfare proposal, the Work Opportunity Act of 1995, was introduced as H.R. 4 on
January 4, 1995, the first day of the 104th Congress.
EITC Expansions—“Making Work Pay”
The Earned Income Tax Credit (EITC), first introduced in 1975, was meant to help offset social
security (FICA15) taxes paid by workers with lower earnings. Since then, the EITC has become an
important policy tool in helping to encourage work. Legislated expansions to the credit over the
years have increased the size and scope of the credit, extending its reach to higher earned income
levels. As a supplement to families with low earnings, the EITC not only helps offset FICA
payroll taxes and federal income taxes families would otherwise pay, but it also helps to offset
some of the “implicit taxes” families face as public assistance benefits are reduced when their
income increases. As a refundable tax credit, the EITC provides payments to qualified individuals
with no federal income tax liability. Over the period examined in this report, the EITC was
expanded both under the George H. W. Bush Administration in 1990 (phased-in in 1991 and
1992), and early in the first term of the Clinton Administration in 1993 (phased-in from 1994
through 1996). By 1996, the expanded EITC was providing a “work bonus” to families with
children, amounting to as much as 34 cents on each dollar earned for a low-income family with
one child, and as much as 40 cents for a family with two or more. The EITC expansions early in
President Clinton’s first term were the centerpiece of part of a policy of “making work pay”—that
people who work shouldn’t be poor—and a critical first step towards the President’s campaign
promise to “end welfare as we know it” by moving people off public cash assistance and into
work.
13
“House GOP Offers Descriptions Of Bills To Enact ‘Contract’.” In CQ Almanac 1994, 50th ed., 39-D-52-D.
Washington, DC: Congressional Quarterly, 1995, http://library.cqpress.com/cqalmanac/cqal94-843-25141-1102086.
14
“Welfare Reform,” in Contract with America: the bold plan by Rep. Newt Gingrich, Rep. Dick Armey and the House
Republicans to change the nation, ed. Ed Gillespie and Bob Schellhas (New York: Times Books, 1994), p. 65.
15
Federal Insurance Contributions Act taxes.
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TANF and Other Policies in the Post-AFDC Era
Temporary Assistance for Needy Families (TANF), signed into law in 1996 as part of the
Personal Responsibility and Work Opportunity Reconciliation Act (PRWORA, P.L. 104-193),
replaced the 61-year-old Aid to Families with Dependent Children (AFDC) program, a federal
entitlement program to low-income families with children. TANF eliminated the federal
entitlement to assistance that existed under AFDC, replacing an open-ended matching grant
program with a fixed-dollar block grant program (with the possible addition of recession-related
contingency funds). States must maintain spending levels equal to 75% of what they spent on
AFDC at the time the program was repealed—a provision known as State Maintenance of Effort
(MOE). Adults must be engaged in approved “work activities” within two years of initial TANF
receipt, subject to sanction for noncompliance. Under TANF, federal work participation standards
(i.e., “work-requirements”) apply to states’ TANF caseloads. As such, states are required to have
50% of families, and 90% of two-parent families, engaged in “work” or they will be at risk of
having their block grant reduced.16 TANF gives states increased flexibility to design programs to
assist needy families with children compared to its predecessor program, but with fixed federal
dollars. A major goal of TANF is to end dependence of needy families on government assistance
by limiting the time they may receive assistance and by promoting job preparation, work, and
marriage. TANF law imposes a maximum five-year lifetime limit on receipt of federally funded
assistance,17 and allows states to impose shorter limits than the maximum.
States have implemented a wide range of policy options and program approaches in the design of
their TANF programs. Many of their programs have evolved from approaches first experimented
with under federal waiver authority in the pre-TANF era. Cash welfare under the AFDC program
was an entitlement, though states were allowed to set income-eligibility levels and the size of
cash benefits, which, under the program, varied widely among them. Since passage of TANF,
states’ cash welfare programs have evolved over time, becoming more complex and diverging
from the cash assistance rules in place under AFDC. States’ TANF policies vary widely in
determining who is eligible for assistance, the benefits they receive, the behavioral requirements
recipients must meet, and the duration they may receive assistance. States’ cash welfare policies
are described elsewhere.18 Since the passage of TANF, most states have increased financial work
incentives for families receiving cash assistance by allowing families to keep more of their cash
welfare benefit as their earnings increase.19 Additionally, as was the case before welfare reform,
most states have allowed inflation to substantially erode the real value of welfare benefits over
time, diminishing the value of welfare relative to work.20
16
A state’s work participation requirement may be reduced for specified reasons (e.g., reductions in a state’s caseload
“caseload reduction credit,” or states spent more than that required by TANF’s MOE). See CRS Report RL32760, The
Temporary Assistance for Needy Families (TANF) Block Grant: Responses to Frequently Asked Questions, by (name
redacted).
17
Up to 20% of the TANF caseload can be extended to receive assistance beyond five years due to “hardship,” as
defined by the states. See CRS Report RL32748, The Temporary Assistance for Needy Families (TANF) Block Grant:
A Primer on TANF Financing and Federal Requirements, by (name redacted).
18
See, for example, the Urban Institute’s Welfare Rules Database, on the Internet at http://anfdata.urban.org/wrd/
WRDWelcome.cfm.
19
For a discussion of changes in work incentives under TANF compared to AFDC, see CRS Report RL30579, Welfare
Reform: Financial Eligibility Rules and Cash Assistance Amounts under TANF, by Craig Abbey (archived report,
available upon request).
20
Maximum TANF benefits available for a family of three in the median state in July 2013 were 42% below the
(continued...)
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States may use both federal and state MOE dollars for a wide range of activities, other than the
provision of “cash assistance.”21 In FY2013, only 28% of total federal TANF and state (MOE)
dollars under the program went toward basic cash assistance. When administrative costs and work
activities are added to basic cash assistance—the three spending categories most commonly
associated with “welfare”—those expenditures accounted for about two-fifths (41%) of total
TANF spending in FY2013. States have also redirected funds previously used to provide cash
assistance to pay for child care, either directly or by transferring funds to the child care block
grant. In FY2013, 16% of all TANF funds used were either expended on child care or transferred
to the Child Care Development Fund (CCDF). TANF is also a major contributor to the child
welfare system, which provides foster care, adoption assistance, and services to families with
children who either have experienced or are at risk of experiencing child abuse or neglect. It
should be noted that among state and federal TANF spending, only those dollars provided as
“cash assistance” are included as income for poverty measurement purposes, although dollars
expended for other purposes, such as child care, may help to indirectly reduce poverty by making
it “affordable” for a parent to work.
Other Federal and State Policies that Encourage Work
In addition to policy changes described above, a variety of other policies implemented at both the
federal and state levels have served to reward work. Over the period examined in this report, the
minimum wage was increased six times—three times in the pre-welfare reform era and three
times since.22 Moreover, in 31 states (includes the District of Columbia) state minimum wages
exceeded the federal minimum wage in one or more years over the period.23 Many states have
implemented state earned income tax credits (SEITC), which piggyback on the federal EITC. In
most cases, states structure their SEITC as a percentage of the federal EITC. In tax year 2000, for
example, 14 states and the District of Columbia had SEITCs, and in 10 of those jurisdictions, the
credit was fully refundable. By tax year 2012, 24 states and the District of Columbia had SEITCs,
and in 22 of those jurisdictions the credit was fully refundable.24
(...continued)
maximum level available to a family under AFDC in July 1988, after adjusting for the effects of price inflation. In July
1988, the maximum benefit level in the median state amounted to 45% of the Department of Health and Human
Services Federal Poverty Guidelines (FPL), but by 2013, only 26%. In 1988, the maximum benefit ranged from a low
of 14.6% of FPL (Alabama) to 82.1% of FPL (California). By 2013, the maximum benefit ranged from a low of 10.4%
of FPL (Mississippi) to a high of 48.5% of FPL (New York). Author’s calculations based on data from U.S. Congress,
House Committee on Ways and Means, 2008 Green Book, Section 7—Temporary Assistance for Needy Families, 111th
Cong., Table 7-22, pp. 49-50, available on the internet at http://waysandmeans.house.gov/media/pdf/110/tanf.pdf; and
Erika Huber, David Kassabian, and Elissa Cohen, Welfare Rules Databook: State TANF Policies as of July 2013, The
Urban Institute, Washington, DC, September 2014, Table L5, Maximum Monthly Benefit for A Family of Three with
No income, 1996-2013 (July), pp. 224-225 http://www.urban.org/UploadedPDF/413208-Welfare-Rules-Databook.pdf.
21
See CRS Report RL32760, The Temporary Assistance for Needy Families (TANF) Block Grant: Responses to
Frequently Asked Questions, by (name redacted).
22
The federal minimum wage increased from $3.35 per hour to $3.80 per hour, effective April 1990, to $4.25 per hour,
effective April 1991, to $4.75 per hour, effective October 1996, $5.15 per hour, effective September 1997, $5.85 per
hour, effective July 2007, and $6.65 per hour, effective July 2008. In July 2009, the minimum wage was increased to
$7.25 per hour. For an analysis of possible effects of minimum wage increases on welfare participation, see Mark
Turner, The Effects of Minimum Wages on Welfare Recipiency, paper presented at the National Association for Welfare
Research and Statistics, August 1998.
23
U.S. Department of Labor, Wage and Hour Division, Changes in Basic Minimum Wages in Non-Farm Employment
Under State Law: Selected Years 1968 to 2011, http://www.dol.gov/whd/state/stateMinWageHis.htm.
24
For tax year 2012 see Policy Basics: State Earned Income Tax Credit, Center for Budget and Policy Priorities,
(continued...)
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Child Support Enforcement25
The Child Support Enforcement (CSE) program was enacted in 1975 as a federal-state program
(Title IV-D of the Social Security Act). The CSE program is funded with both state and federal
dollars. The federal government bears the majority of CSE program expenditures and provides
incentive payments to the states for success in meeting CSE program goals.26
The CSE program provides seven major services on behalf of children: (1) locating absent
parents, (2) establishing paternity, (3) establishing child support orders, (4) reviewing and
modifying child support orders, (5) collecting child support payments, (6) distributing child
support payments, and (7) establishing and enforcing support for children’s medical needs.
The CSE program has the potential to impact more children and for longer periods of time than
most other federal programs. In many cases, the CSE program may interact with parents and
children for 18 years.
One of the original purposes of the CSE program was to recover from noncustodial parents some
of the costs of providing cash welfare to their children’s families. Families receiving cash
assistance must assign (legally turn over) to the state their rights to child support collections.
These collections are split between the federal government and the states to recover the costs of
providing cash assistance. States have options to pay some or all of such collections to families
directly, but they are not required to do so.
Over the last 10-15 years, the CSE program has expanded its mission beyond its initial welfare
cost-recovery goal to focus on providing its clients with more effective and efficient CSE services
and fostering parental responsibility. The 1996 welfare reform law established some new systems
for tracking down and enforcing the obligations of noncustodial parents to pay child support. It
also established a “family first” policy, sending more child support collected on behalf of families
that formerly received cash assistance directly to the family. These policy changes, combined
with the decline in cash assistance rolls, have resulted in the bulk of CSE collections going
(...continued)
December 2012, http://www.cbpp.org/files/policybasics-seitc.pdf. For earlier tax years, see
http://www.taxpolicycenter.org/taxfacts/Content/Excel/state_eitc.xls.
25
This section is based on CRS Report RS22380, Child Support Enforcement: Program Basics, by (name redacted)
; CRS Report RL34203,
Child Support Enforcement Program Incentive Payments: Background and Policy Issues,
by (name redacted) (archived report); and CRS Report R41431,
Child Well-Being and Noncustodial Fathers, by
(name redacted), (name redacted), and (name redacted).
26
The federal government reimburses each state 66% of all allowable expenditures on CSE activities. The federal
government’s funding is “open-ended” in that it pays its percentage of expenditures by matching the amounts spent by
state and local governments with no upper limit or ceiling. The federal government also provides incentive payments to
states to encourage them to operate effective programs. Federal law requires states to reinvest CSE incentive payments
back into the CSE program or related activities. In addition to state and federal matching funds and incentive payments,
states collect child support on behalf of families receiving AFDC/TANF to reimburse themselves (and the federal
government) for the cost of AFDC/TANF cash payments to the family. Federal law requires families who receive
AFDC/TANF cash assistance to assign their child support rights to the state in order to receive AFDC/TANF. In
addition, such families must cooperate with the state if necessary to establish paternity and secure child support. CSE
collections on behalf of families receiving AFDC/TANF cash benefits are used to reimburse state and federal
governments for AFDC/TANF payments made to the family (i.e., child support payments go to the state instead of the
family, except for amounts that states choose to “pass through” to the family as additional income that does not affect
TANF eligibility or benefit amounts). Additionally, states may charge application fees and apply recovered costs from
non-welfare families to help finance their CSE programs.
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directly to families. In FY2013, the CSE program collected $28.0 billion in child support
payments from noncustodial parents and served nearly15.6 million child support cases. Of the
$28.0 billion collected in child support payments, about 93% went to families, 5% went to state
and federal governments, and nearly 2% consisted of medical support payments or fees paid to
states.
Policies Addressing Marriage and Childbearing27
Among TANF’s four stated goals, three relate directly to marriage and childbearing (italics added
below). States may spend TANF funds on a wide range of activities for cash welfare recipients
and other families toward achieving these goals.
TANF’s Four Goals
“(1) Provide assistance to needy families so that children may be cared for in their own
homes or in the homes of relatives;
(2) end the dependence of needy parents on government benefits by promoting job
preparation, work, and marriage;
(3) prevent and reduce the incidence of out-of-wedlock pregnancies and establish annual numerical
goals for preventing and reducing the incidence of these pregnancies; and
(4) encourage the formation and maintenance of two-parent families.”
Since TANF became law, a number of federal, state, and local initiatives have been undertaken in
the attempt to reduce non-marital childbearing and promote responsible fatherhood and healthy
marriage. Policy initiatives seek to reduce the incidence of teenage pregnancy through abstinence
education, comprehensive sex education programs, and youth programs. Other programs focus on
promoting healthy marriage, generally through public advertising campaigns on the value of
marriage, and more targeted efforts at providing “social skills” education and training (e.g.,
marriage education, conflict resolution, and relationship skills) to couples interested in marriage
or who are already married. Responsible fatherhood programs are intended to connect or
reconnect children to their noncustodial parents, with the hope of improving the prospects of
children being raised in single-parent families.
Policy Responses to Changing Economic Conditions
It is useful to view the policy changes discussed above in the context of prevailing economic
conditions. Over the 27 years examined, the country experienced three economic recessions. The
first, lasting eight months (July 1990 to March 1991) and occurring well before welfare reform,
was followed by the longest period of economic expansion in the post-World War II era. The
expansion ended with a second eight-month recession (March to November of 2001), which
occurred well after passage and state implementation of new welfare reform rules. More recently,
the economy suffered from what has been marked as the longest and deepest recession in the
post-World War II era, lasting some 18 months from its official beginning to end (December 2007
to June 2009). In response, Congress passed a wide range of provisions under economic stimulus
27
For a discussion of issues and policies and programs relating to this topic see CRS Report RL34756, Nonmarital
Childbearing: Trends, Reasons, and Public Policy Interventions, by (name redacted).
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and recovery legislation to bolster the economy and to help support low- and middle-income
families and individuals.
Tax Rebates, Reductions, and Credits
A number of policy interventions were undertaken in response to the most recent recession to
both stimulate the economy and cushion the most economically vulnerable. Under provisions in
the Economic Stimulus Act of 2008 (P.L. 110-185), single and head-of-household tax filers, such
as single mothers, who had filed federal income taxes in 2007 became eligible to receive a
minimum tax rebate in 2008 of $300 ($600 for married joint filers) if their 2007 earned income
(plus any Social Security benefits, tier 1 railroad retirement, and veteran’s disability payments)
was at least $3,000, and up to $600 ($1,200 for married joint filers) to the extent of their 2008 tax
liability. The American Recovery and Reinvestment Act (ARRA; P.L. 111-5) provided rebates,
under the Making Work Pay (MWP) tax credit, of up to $400 for single and head-of-household
tax filers and up to $800 for joint filers in 2009 and 2010 by reducing FICA tax withholding.
Congress legislated a payroll (FICA) “tax holiday” (P.L. 111-312), temporarily reducing the
employee share of Social Security taxes from 6.2% to 4.2% for 2011. In 2011, for a single
working parent with one child, earning poverty level wages ($15,504), her payroll taxes would be
reduced from $961 to $651, a tax savings of $310. The Middle Class Tax Relief and Job Creation
Act of 2012 (P.L. 112-96) extended the tax reduction through 2012.
The Emergency and Economic Stabilization Act of 2008 (EESA; P.L. 110-343) included a
provision that temporarily lowered the income limit for receipt of the refundable portion of the
Child Tax Credit28 (CTC), which is administered by the Internal Revenue Service (IRS) as the
Additional Child Tax Credit (ACTC) to distinguish it from the nonrefundable portion of the CTC.
Refundable credits, such as the ACTC and EITC, extend benefits to tax filers even though they
owe no taxes. For the 2008 tax year, EESA effectively lowered the ACTC refundable income
limit from $12,050 to $8,500. ARRA further expanded eligibility, temporarily, for the ACTC to
tax filers with earnings of $3,000 or more for tax years 2009 and 2010. The refundable income
limits set a lower threshold at which tax filers may begin to receive the refundable ACTC. A tax
filer with a qualifying child could receive a “refund” amounting to 15 cents on every dollar
earned above the refundable income threshold, up to a maximum credit amount of $1,000 per
qualifying child. Under the EESA, a single mother with earned income of $12,050 became
eligible for an ACTC of $532.50 in 2008, whereas absent the EESA provisions she would have
received nothing. In 2009, under the ARRA provisions, a single parent with one child and having
annual earnings in excess of $3,000 may have been eligible for the credit, and eligible for the full
$1,000 credit once her earned income reached $9,667.29 Absent the legislative changes noted
above, she would not have begun to become eligible for the credit until her earned income
exceeded $12,550, and would not have been eligible for the full $1,000 credit until her income
reached $19,217.30
28
For a discussion see CRS Report R41873, The Child Tax Credit: Current Law and Legislative History, by (name reda
cted).
29
$3,000 + ($1,000/.15) = $9,667.
30
$12,550 + ($1,000/.15) = $19,217.
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Under ARRA, certain ACTC provisions were set to expire at the end of the 2010 tax year. Among
other things, expiring provisions would have caused the maximum allowable credit to revert from
$1,000 to $500 per qualifying child, and for credit refundability to extend only to families with
three or more qualifying children. The Tax Relief, Unemployment Insurance Reauthorization, and
Job Creation Act of 2010 (P.L. 111-312) extended the ARRA ACTC provisions through tax year
2012. The American Taxpayer Relief Act of 2012 (H.R. 8, as amended by the Senate, and signed
into law by the President on January 2, 2013), among other things, extends ARRA’s ACTC
provisions for another five years, through 2017.
ARRA also temporarily raised the EITC credit rate for tax years 2009 and 2010 from 40% for
families with two or more qualifying children to 45% for families with three or more qualifying
children. In 2009, for a single parent with three or more children, the maximum available credit
under ARRA increased to $5,657, from what would have been $5,028 absent ARRA. The Tax
Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 (P.L. 111-312)
extended the ARRA EITC provisions through tax year 2012. The American Taxpayer Relief Act
of 2012 extends these provisions through 2017.
Unemployment Insurance Benefits
Unemployment Compensation (UC) under the Unemployment Insurance (UI) system typically
provides up to 26 weeks of unemployment compensation covering a portion of lost wages to
qualified covered workers who become eligible due to job loss.31 Under the permanent Extended
Benefits (EB) program, unemployment compensation may be extended for an additional 13 or 20
weeks to workers in qualifying states with high unemployment. Both UC and EB payments to
workers are funded jointly through federal and state taxes on employers. Additionally, as in some
past recessions, Congress funded a temporary Emergency Unemployment Compensation program
(EUC08; P.L. 110-252), which began in 2008.32 Under the EB and EUC08 programs,
Unemployment Insurance (UI) benefits have been extended from a maximum of 26 weeks under
the UC program to a maximum of 60 to 99 weeks, depending on states’ circumstances.
Additionally, ARRA made several changes to Unemployment Compensation (UC) to assist
individuals who become unemployed.33 It provided a temporary supplemental benefit increase of
$25 per week under all UC programs (UC, EB, EUC08, and others34), payable until July 2010,
and excluded $2,400 in UC benefits from gross income under the federal income tax for 2009.
ARRA also provided $7 billion in incentives to states to modify their basis for computing UC
benefits and for extending benefits to currently ineligible individuals. Two-thirds of the $7 billion
available to states is contingent on states first adopting an alternative method of determining
31
For a thorough discussion of the UI system, see CRS Report RL33362, Unemployment Insurance: Programs and
Benefits, by (name redacted) and (name redacted).
32
EUC08 benefits are fully federally funded out of the federal Unemployment Trust Fund (UTF) and from general
funds. Since originally passed into law, authorization for the EUC08 program has been extended a number of times—
most recently on December, 17, 2010, when the President signed P.L. 111-312, the Tax Relief, Unemployment
Insurance Reauthorization, and Job Creation Act of 2010, which extended the EUC08 program’s authorization until
January 3, 2012.
33
See CRS Report R40368, Unemployment Insurance Provisions in the American Recovery and Reinvestment Act of
2009, by (name redacted); and CRS Report RS21356, Taxation of Unemployment Benefits, by (name redacted).
34
Other UC programs include unemployment benefits for former U.S. military service members (UCX program),
Disaster Unemployment Assistance (DUA) benefits, workers who lose their jobs because of international competition
who receive additional or supplemental support through the Trade Adjustment Act (TAA) programs.
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eligibility for individuals who do not qualify under the regular method based on their wage and
employment history. The states could then be eligible for the remaining two-thirds of the $7
billion if they adopt at least two of the following four provisions:
1. permit former part-time workers to seek part-time work;
2. permit voluntary separations from employment for compelling family reasons,
which must include (i) domestic violence, (ii) illness or disability of an
immediate family member, and (iii) the need to accompany a spouse who is
relocating for employment;
3. provide extended compensation to UC recipients in qualifying training programs
for high-demand occupations; or
4. provide dependents’ allowances to UC recipients with dependents.
Upon accepting the federal incentive payments, states are required to maintain the adopted
changes after the incentive payments expire. The above provisions could especially assist single
mothers whose job attachment has been sporadic or limited to part-time employment due to
competing family responsibilities.
Supplemental Nutrition Assistance Program (SNAP/Food Stamp)
Benefits
ARRA raised maximum benefit amounts under the Supplemental Nutrition Assistance Program
(SNAP, formerly the Food Stamp program), effective in April 2009.35 ARRA effectively increased
maximum monthly SNAP benefits by 13.6%, as a replacement for annual benefit adjustments
based on annual food-price inflation. As a result, average household benefits (typically less than
the maximum) were boosted by more than 15%. ARRA SNAP benefit increases reverted back to
annual adjustment based on food-price inflation in November 2013, as specified in SNAP law.
Other Social Policies
ARRA also included provisions that added a new temporary “emergency contingency fund”
under TANF for FY2009 and FY2010, which allowed states receiving extra federal grants to
cover 80% of increased recession-related costs in those two years.36 Recession-related costs are
defined as increased basic assistance (for states with increased basic assistance caseloads), nonrecurrent short-term benefits, or subsidized employment expenditures.
Other ARRA provisions may also directly help single mothers.37 For example, expanded funding
for child care for low-income working families might help single mothers secure and retain
employment, and increased federal incentive payments to states to run effective child support
35
See CRS Report R41374, Reducing SNAP (Food Stamp) Benefits Provided by the ARRA: P.L. 111-226 and P.L. 111296, by (name redacted), (name redacted), and (name redacted) (archived).
36
CRS Report R40211, Human Services Provisions of the American Recovery and Reinvestment Act, by (name redacted) et
al. (archived). Also see CRS Report R41078, The TANF Emergency Contingency Fund, by (name redacted).
37
CRS Report R40211, Human Services Provisions of the American Recovery and Reinvestment Act, op. cit.
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enforcement programs may help states’ efforts to establish and maintain absent parents’ child
support obligations.
Welfare, Work, and Poverty Status of FemaleHeaded Families with Children
A dramatic transformation in single mothers’ welfare, work, and poverty status has occurred over
the 27-year period examined in this report. 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, in
part a response to structural changes to income “safety net” programs, with more mothers
working and fewer relying on cash welfare to support themselves and their children in the postwelfare reform era.
Figure 3 completes the administrative data series presented earlier (Figure 2) through 2013. The
figure shows a dramatic decline in the number of recipients (total, adults and children) receiving
AFDC/TANF after having reached a historical peak in 1993. In 1993, 14.2 million persons were
receiving AFDC in the average month; by 2008, the number receiving TANF had fallen to 4
million, a decline of 10.2 million persons from 2003—6.5 million fewer children and 3.7 million
fewer adults. In 2008, the number of persons receiving cash aid under TANF was the lowest since
1963, when 3.9 million received assistance under AFDC. Reflecting the effects of the most recent
recession, the number of persons receiving TANF has increased from 4.0 million in 2008 to 4.6
million in 2010. Accompanying the economic recovery, the number of recipients has fallen
slightly since 2010, reaching 4.0 million in 2013—the same level as its 2008 pre-recession low.
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Welfare, Work, and Poverty Status of Female-Headed Families with Children: 1987-2013
Figure 3. Number of Recipients and Cases Receiving Cash Assistance
Under ADC, AFDC, and TANF, 1960 to 2013
(Annual Monthly Average, in Millions)
Source: Figure prepared by the Congressional Research Service (CRS) from Department of Health and Human
Services (DHHS), Office of Family Assistance (OFA). See Table C-2 for supporting data.
Note: Includes enrollment in the 50 states, the District of Columbia, Guam, Puerto Rico, and the Virgin Islands.
Separate estimates for children and adults are not available from 1997 to 1999 due to changes in state reporting
requirements during the transition from AFDC to TANF. From 2001 and later, includes enrollment in Separate
State Programs (SSP) under state Maintenance of Effort (MOE) requirements.
Moreover, since welfare reform, poverty among children living in female-headed households38
has also fallen significantly. Figure 4 shows that the incidence of poverty among children in
female-headed households fell from 55.4% in 1991 to 39.3% by 2001, which represents the
largest 10-year decline in poverty among such children since that which commenced in the early
1960s. The poverty rate of children in female-headed families has risen consequent to two
recessions since 2001, reaching a recent high of 47.7% in 2011,and since falling to 45.8% in
2013—still well above its 2001 low of 39.3%. Since 1996 welfare reform, progress appears to
have been largely sustained in both reducing welfare dependency and poverty among children in
female-headed families, in spite of the recent recession.
38
Estimates are for children in female-headed “households,” which differs somewhat from the CRS definition of
female-headed ”families” used later in this report based on analysis of U.S. Census Bureau Current Population Survey
(CPS) Annual Social and Economic Supplement (ASEC) data.
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Welfare, Work, and Poverty Status of Female-Headed Families with Children: 1987-2013
Figure 4. Poverty Rate of Children Under Age 18
in Female-Headed Households (No Spouse Present), 1960 to 2013
(Percent poor)
Source: Figure prepared by the Congressional Research Service (CRS) based on U.S. Census Bureau historical
series, available at http://www.census.gov/hhes/www/poverty/data/historical/people.html, “Table 10. Related
Children in Female Householder Families, by Poverty Status.” See Table C-3 for supporting data.
Notes: Estimates are for children in female-headed “households,” which differs somewhat from the CRS
definition of female-headed ”families” used later in this report based on analysis of U.S. Census Bureau Current
Population Survey (CPS) Annual Social and Economic Supplement (ASEC) data.
The remainder of this report focuses primarily on single mothers, as single mothers have been a
primary focus of social policy. Untangling the effects of demographic factors, the economy,
welfare policy, and other policy interventions on single mothers’ work behavior, welfare receipt,
income, and poverty status is beyond the scope of this report. Others have attempted to parcel out
these effects with mixed success and differing conclusions as to the relative impacts of each.39 In
contrast to these efforts, the remainder of this report provides a descriptive analysis of U.S.
39
See, for example Council of Economic Advisors, Technical Report: The Effects of Welfare Policy and the Economic
Expansion on Welfare Caseloads: An Update, A Report by the Council of Economic Advisors, Washington, DC,
August 1999; James P. Ziliak, David N. Figlio, and Elizabeth E. Davis, et al., “Accounting for the Decline in AFDC
Caseloads, Welfare Reform or the Economy?,” The Journal of Human Resources, vol. XXXV, no. 3, pp. 570-586;
Robert A. Moffitt, “The Effect of Pre-PRWORA Waivers on AFDC Caseloads and Female Earnings, Income, and
Labor Force Behavior,” in Economic Conditions and Welfare Reform, ed. Sheldon Danziger (Kalamazoo, Mich.: W.E.
Upjohn Institute for Employment Research, 1999); June E. O’Neill and Anne M. Hill, Gaining Ground? Measuring the
Impact of Welfare Reform on Welfare and Work, Manhattan Institute, Civic Report No. 17, New York, New York,
2001; Caroline Danielson and Jacob Alex Klerman, “Did Welfare Reform Cause the Caseload Decline,” Social Service
Review, vol. 82, no. 4 (December 2008), pp. 703-730.
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Census Bureau CPS/ASEC data, with the goal of increasing understanding of changes in single
mothers’ welfare, work, income, and poverty status that have occurred over the past 27 years.
Number of Families Headed by Single Mothers
Over the 27-year period examined, the number of single-mother families increased from 8.2
million in 1987 to a peak of 11.5 million in 2011, falling somewhat since, to 11.0 million in 2013
(Figure 5). The total number of single mothers increased from 8.4 million in 1989 to about 9.9
million in 1993, an increase of 1.8 million, or 17%. From 1993 through 2000, the number of
single mothers remained fairly stable, ranging between 9.7 million and 10.1 million. From 2000
to 2011, the number of single mothers increased by 1.5 million (from 9.7 million to 11.5 million,
respectively). (The number of single mothers fell somewhat in 2013, to 11.0 million.) The overall
increase in single-mother families has largely been due to an increase in single mothers who have
never been married. From 1987 to 2011, the number of never-married single mothers more than
doubled, increasing from 2.7 million to 5.8 million over the period. The number of single mothers
in 2013, 5.6 million, was only slightly below its 2011 peak of 5.8 million. In contrast, the number
of separated mothers (no spouse present), and the number of divorced mothers in 2013, was only
slightly above their 1987 number, while the number of widowed mothers in 2013 was well below
the number in 1987. Moreover, in 2013 the number of married-couple families with children was
just slightly below their number in 1987 (not shown in the figure, see Table C-4).
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Welfare, Work, and Poverty Status of Female-Headed Families with Children: 1987-2013
Figure 5. Number of Single-Mother Families, by Mothers’ Marital Status,
1987 to 2013
(Number in millions)
Source: Prepared by the Congressional Research Service (CRS) based on analysis of U.S. Census Bureau 1988
to 2014 Current Population Survey (CPS) Annual Social and Economic Supplement (ASEC) data. See Table C-4
for supporting data.
Incidence of Poverty by Mothers’ Marital Status
The incidence of poverty among families headed by single mothers fell substantially from a peak
of 45.4% of all single-mother families in 1992 and 1993 to a historical low for the 27-year period
of 31.8% in 2000 (Figure 6). Since 2000, poverty rates for single mothers have increased, but
they still remain well below levels of the early 1990s. The poverty rate among single-mother
families rose to 34.9% by 2004, consequent to an eight-month recession (March to November
2001), and continued to drift upwards until increasing more sharply, to 39.5% in 2010,
consequent to a deep 18-month recession (December 2007 to June 2009). The poverty rate for
single-mother families fell from 39.8% in 2012 to 38.0% in 2013. Poverty rates are highest
among never-married mothers, followed by separated mothers (no spouse present) and widowed
and divorced mothers. Poverty rates of single mothers are several times that of married mothers.
Poverty rates for never-married, separated, and divorced mothers fell substantially over the 1990s,
reaching historical lows by the beginning of the next decade. (Note: the wide variability in the
poverty rate among widowed mothers over the period reflects sample variation relating to the
comparatively small sample of such mothers represented on the CPS/ASEC.)
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Welfare, Work, and Poverty Status of Female-Headed Families with Children: 1987-2013
Figure 6. Poverty Rates by Mothers’ Marital Status, 1987 to 2013
(Percent poor)
Source: Prepared by the Congressional Research Service (CRS) based on analysis of U.S. Census Bureau 1988
to 2014 Current Population Survey (CPS) Annual Social and Economic Supplement (ASEC) data. See Table C-4
for supporting data.
Poverty and Cash Welfare Receipt among Single Mothers
CPS data show an increase in cash welfare receipt (AFDC, TANF, or General Assistance (GA)40)
among single mothers during the late 1980s and early 1990s and a decrease in the mid- to late1990s. The CPS data generally correspond to the caseload’s rise and fall, documented by
administrative program data, but underestimate the caseload statistics to some extent.41 Figure 7
shows that the number of single mothers in families reporting receipt of cash welfare on the CPS
increased from 2.5 million in 1989 to 3.4 million in 1993, an increase of 900,000, or 36%, over
the four-year period. Compared to 1993, the peak year of welfare receipt, the number of single
mothers reporting cash welfare was down to 795,000 in 2013—77% below that of 1993 (the
bottom-shaded portion of the figure).42 The CPS/ASEC data show very little if any take-up in
40
The CPS/ASEC data groups any General Assistance individuals or families may have received with AFDC and
TANF. GA programs are financed and administered at the state, county, or local level, and are generally used to meet
the needs of people who are ineligible for federally funded cash assistance (e.g., AFDC/TANF, SSI) or are awaiting
approval for such benefits. In 1998, 35 states and the District of Columbia had GA programs. See L. Jerome Gallagher,
Cori E. Uccello, and Alicia B. Pierce, et al., State General Assistance Programs 1998, The Urban Institute, Assessing
the New Federalism, Discussion Paper 99-01, Washington, DC, April 1999, http://www.urban.org/publications/
409066.html.
41
See Appendix B, which compares CPS estimates to AFDC/TANF caseload counts.
42
Administrative caseload statistics show the caseload as peaking in March 1994, with nearly 5.1 million cases. In
(continued...)
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Welfare, Work, and Poverty Status of Female-Headed Families with Children: 1987-2013
receipt of cash welfare by single mothers in response to the most recent recession, and little if any
take-up in cash welfare in response to the one preceding it. This differs from the administrative
data presented earlier (Figure 3), which showed a modest increase in the TANF caseload from
2008 to 2010, no increase from 2010 to 2011, and a slight decline from 2011 to 2013. From 1993
to 2013, the number of poor single mothers who reported receiving no cash welfare increased
from 1.722 million in 1993 to 3.605 million in 2013, more than doubling over the period (the
middle-shaded area of the figure).
Figure 7. Single Mothers: Poverty and Cash Welfare Receipt,
1987 to 2013
Source: Prepared by the Congressional Research Service (CRS) based on analysis of U.S. Census Bureau 1988
to 2014 Current Population Survey (CPS) Annual Social and Economic Supplement (ASEC) data. See Table C-5
for supporting data.
Note: Welfare is cash welfare in the form of AFDC, TANF, or state General Assistance.
Work, Poverty, and Cash Welfare Receipt of Single Mothers
Figure 8 provides an overview of single mothers’ welfare, work, and poverty status from 1987 to
2013. The figure shows that since 1993, the share of single mothers who worked at some time
(...continued)
December 2007, at the onset of the recession, the caseload stood at 1.691 million, or only about one-third the level of
its March 1994 peak. By December 2010, the caseload had increased somewhat from that of two years earlier, to 1.936
million, a 14.3% increase. In December 2011, the caseload was down slightly from a year earlier, at 1.862 million, and
in December 2013, down further, to 1.654 million.
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Welfare, Work, and Poverty Status of Female-Headed Families with Children: 1987-2013
during the year has increased markedly, and that the share who received cash welfare (AFDC,
TANF, or GA) has declined significantly, as has the share who are poor under the official poverty
definition. The figure illustrates that while both cash welfare recipiency rates and poverty rates
for single mothers have generally fallen since 1993, single mothers’ welfare recipiency rate has
fallen faster than their poverty rate. More recently, since 2000, the poverty rate of single mothers
has increased, but cash welfare receipt has not—a growing share of single mothers are poor under
the official poverty measure but receive no cash welfare assistance. This suggests that TANF and
other policies implemented in the mid-1990s (e.g., EITC expansion) may have had a lasting
behavioral impact on reducing the incidence of cash welfare receipt among families headed by
single mothers.
Figure 8. Welfare, Work, and Poverty Status Among Single Mothers,
1987 to 2013
Source: Prepared by the Congressional Research Service (CRS) based on analysis of U.S. Census Bureau 1988
to 2014 Current Population Survey (CPS) Annual Social and Economic Supplement (ASEC) data. See Table C-6
for supporting data.
Note: Welfare is cash welfare in the form of AFDC, TANF, or state General Assistance.
Single Mothers’ Employment
While welfare receipt has declined, dramatic gains in single mothers’ employment have occurred
since 1993. Figure 9 shows employment rates of single and married mothers by age of youngest
child in March, from 1988 to 2014. The chart shows that gaps that had existed between single and
married mothers’ employment have been virtually eliminated in recent years, with single mothers
now being as, and in some cases more, likely than their married counterparts to be working.
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Welfare, Work, and Poverty Status of Female-Headed Families with Children: 1987-2013
Over the period, the increase in employment among single mothers with young children has been
most dramatic. Among mothers with a child under the age of 3, their employment rate increased
from a low of 35.1% in March 1993 to a high of 59.1% in March 2000, a 24 percentage point
increase over the period. Their employment rate fell to 53.7% in March 2005 but rebounded to
57.0% in March 2006, marking a recent high; it fell to a recent low of 49.6% in March 2010, and
in March 2014 stood at 54.9%.
Single mothers with a youngest child age 3 to 5 also experienced marked employment gains over
the mid-to-late 1990s. Their employment rate grew from a low of 54.1% in March 1992 to 72.7%
by March 2000, an 18.6 percentage point increase over the period. In March 2008, their
employment rate stood at 68.5%, but fell to a recent low of 59.7% in March 2010—13.0
percentage points below its March 2000 peak, with over two-thirds of the decline having occurred
since March 2007. By March 2014, the employment rate for this group of single mothers had
rebounded to 66.0%.
Single mothers whose youngest child was of school age (age 6-17) had employment rates about
equal to those of their married counterparts over the 1988-2014 period. In March 2014, the
employment rate of single mothers with school-age children stood at 73.0%—6.1 percentage
points below a peak employment rate of 79.1% in 2001.
Figure 9. Employment Rates of Single and Married Mothers,
by Age of Youngest Child, March 1988 to March 2014
Source: Prepared by the Congressional Research Service (CRS) based on analysis of U.S. Census Bureau 1988
to 2014 Current Population Survey (CPS) Annual Social and Economic Supplement (ASEC) data. See Table C-7
for supporting data.
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Welfare, Work, and Poverty Status of Female-Headed Families with Children: 1987-2013
Unemployment Rates Across the Business Cycle
Based on Bureau of Labor Statistics (BLS) data, the unemployment rate of women maintaining
families has increased from a recent low of 6.2% in August 2007, just prior to the recession’s
onset, to 11.7% in June 2009, the recession’s official end date (see Figure 10). Over a year past
the recession’s end, the unemployment rate of women maintaining families rose further, reaching
a high of 13.4% in July and August 2010. The annual average unemployment rate for women
maintaining families was 12.3% in 2010, and 12.4% in 2011, and the poverty rate among single
mothers essentially leveled off over those two years. Since then, their annual average
unemployment rate has fallen, to 11.4% in 2012, and 10.5% in 2013. Comparing the most recent
unemployment statistics for women maintaining families, their annual average unemployment
rate for the first 10 months of 2014 (8.8%) is well below that of the same period in 2013 (10.5%),
providing encouragement that the poverty rate for single mothers and their children will show
continued improvement in 2014, when estimates become available in late summer 2015.
However, given the pace of economic recovery, official poverty among single mothers and their
children may be expected to remain above pre-recession levels for some years to come.
Figure 10. Unemployment Rate of Women Maintaining Families,
January 1987 through October 2014
(Rates not seasonally adjusted)
Source: Prepared by the Congressional Research Service (CRS) based on U.S. Bureau of Labor Statistics (BLS)
data. See Table C-8 for supporting data.
Notes: Economic recessions: July 1990 to March 1991, March to November 2001, and December 2007 to June
2009. Economic recessions are defined by the National Bureau of Economic Research (NBER) Business Cycle
Dating Committee.
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Welfare, Work, and Poverty Status of Female-Headed Families with Children: 1987-2013
Poor Single Mothers’ Work and Welfare Status
There is a greater likelihood today than in years past that a poor single mother will be working
rather than receiving welfare. Changes in poor mothers’ participation in work and welfare status
first became evident in the early-to-mid 1990s, with rates of employment increasing after 1992
(solid green line, Figure 11) and rates of welfare receipt declining after 1993 (solid orange line,
Figure 11). A crossover point was reached by 1996, when the chances that a poor single mother
would be working exceeded the chances that she would be receiving welfare. The initial decline
in welfare receipt and increase in work among poor single mothers coincides with an economy
recovering from recession, a phasing-in of expanded EITC benefits that encouraged work (19941996), increased experimentation among states attempting to transform their cash welfare
programs through the Section 1115 waiver process, and increased political messaging that
national welfare was looming on the horizon. The trend of declining welfare receipt and increased
work intensified further after passage of national welfare reform legislation in 1996.
Figure 11 shows that the share of poor single mothers who received cash welfare at any time
during the year fell from just over 60% in the 1987-1993 period to 17% in 2010. Welfare receipt
among poor single mothers began to decline significantly after 1993, and even more so after
1996. Similarly, the share of poor single mothers who were working at any time during the year
increased from around 44% in 1992 to a peak of 64% in 1999, but in 2010 had dropped to 51%, a
full 13 percentage points below its 1999 peak. In 2014, 54% of poor single mothers worked at
some time during the year.
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Figure 11. Poor Single Mothers: Work and Welfare Status During the Year,
1987 to 2013
Source: Prepared by the Congressional Research Service (CRS) based on analysis of U.S. Census Bureau 1988
to 2014 Current Population Survey (CPS) Annual Social and Economic Supplement (ASEC) data. See Table C-9
for supporting data.
The share of poor single mothers who relied on cash welfare without working dropped from a
peak of 43% in 1991 to a low of 9% in 2013 (one-fifth its 1991 rate), and has shown little change
since, despite the recession. The share who worked without relying on cash welfare increased
from a recent low of 25% in 1993 to a recent pre-recession high of 49% in 2007—essentially
doubling over the period—after which the share fell to 45% in 2010 and 2011 consequent to the
recession. The share has since rebounded in 2012 (48%) and 2013 (49%). The share of poor
single mothers who combined work and welfare over the year has fallen by nearly three-quarters,
from about 20% in 1996 to about 5% in 2013—one quarter of its 1996 level.
Poor single mothers who reported that they neither worked nor received cash welfare during the
year (the dashed blue line in Figure 11) has increased from a low of about 12% in 1991 to 37% in
2013, tripling over the period. This surprising combination may reflect a mix of circumstances,
including income support from unrelated household members (which is not included in the
official poverty measure), including cohabiting partners, and other means of support from outside
the household not captured on the CPS. It may also reflect income reporting problems on the
CPS, especially with regard to welfare income.43
43
See Appendix B on CPS under-reporting.
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Receipt of Selected Benefits by “Earnings Poor”
Female-Headed Families with Children
As shown above, cash welfare receipt among female-headed families with children has
dramatically declined in the post-1996 welfare reform era, with the decline having begun in the
years just prior to the passage and subsequent implementation of reform. Figure 12 shows
recipiency rates among female-headed families with children with earnings below their families’
poverty thresholds for six income “safety-net” program categories: AFDC, TANF, or General
Assistance (GA); Supplemental Security Income (SSI); Unemployment Insurance Benefits; Food
Stamp/SNAP benefits; the EITC; and the refundable portion of the Child Tax Credit, the
Additional Child Tax Credit (ACTC). The analysis is restricted to “earnings poor” families, as
earnings are the primary means by which most families with working-age members support
themselves. Earnings (along with other income) deemed insufficient to provide for a family’s
basic needs (i.e., poverty level income) and the reasons associated with insufficient earnings (or
other income) are often used in determining eligibility for need-tested and other programs.
Over the 27-year period examined, there has been a marked change in the provision of benefits
among the six programs, reflecting a structural change in aspects of the “income safety net.” It is
important to note that the “official” U.S. poverty measure does not include in-kind benefits, such
as Food Stamp/SNAP benefits, nor does it include tax transfers, in the form of the EITC or
ACTC, or taxes paid (e.g., federal and state income taxes, FICA payroll taxes). Among the six
program categories examined, only AFDC/TANF/GA, SSI, and UI are included in the “official”
poverty measure. As will be shown later, this has important implications for how one assesses the
role of income support policies, especially in the post-1996 welfare reform era and over the
course of the most recent recession and recovery.
Earned Income Tax Credit (EITC)
Figure 12 shows a substantial increase in EITC from 1993 to 1999, as mothers with
comparatively low earnings prospects turned away from cash public assistance toward work. In
1993, about 44% of “earnings poor” female-headed families with children were estimated to have
received the EITC; by 1999, 64% of such families were estimated to have received it. In contrast,
over the same period, cash welfare receipt in the form of AFDC, TANF, or GA fell from about
56% to 31%. EITC benefit increases that phased in between 1993 and 1996 may have served to
lure some single mothers away from welfare, in part evidenced by increased work seen earlier in
Figure 9. Additionally, states’ use of AFDC waivers to strengthen work requirements and
sanctions for noncompliance in the pre-welfare reform years may have served to increase work
participation and consequent EITC receipt. TANF’s provisions further encouraged work and
accompanying EITC eligibility over welfare. The figure shows a marked decrease in estimated
EITC receipt in 2003 and 2004, and then a rebound in 2005—these years are marked by a
dashed-line; caution should be exercised in attempting to interpret this phenomena, as it appears
to be an aberration that is not readily explainable.44
44
Email exchanges with Census Bureau contacts, relaying the author’s findings, have not resulted in an attributable
explanation for the sudden dip and recovery of EITC receipt among this subgroup of the population. EITC receipt is not
directly reported on the CPS/ASEC. The Census Bureau estimates the EITC and other tax variables on the CPS/ASEC
using a tax model. Beginning with the 2004 CPS, the Census Bureau implemented a new tax model, providing new tax
(continued...)
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Figure 12. Receipt of Selected Benefits by “Earnings Poor”
Female-Headed Families with Children, 1987 to 2013
Source: Prepared by the Congressional Research Service (CRS) based on analysis of U.S. Census Bureau 1988
to 2014 Current Population Survey (CPS) Annual Social and Economic Supplement (ASEC) data. See Table C10 for supporting data.
Notes: “Earnings poor” families are those whose annual earned income is below their poverty income
threshold. Other sources of income received by these families might subsequently lift their total income above
poverty.
Supplemental Security Income (SSI)
Receipt of SSI among families headed by single mothers increased over the first half of the
1990s, as shown in Figure 12. In 1988, 7% of “earnings poor” families headed by single mothers
reported receiving SSI; by 1996, 12.6% of such families were reporting SSI receipt. The
populations served by AFDC and SSI overlap somewhat. Some persons may be eligible for both
programs, but individuals cannot receive benefits under both, although families can.45 In contrast
to AFDC and TANF, individuals applying for SSI must pass an often strict and lengthy disability
determination process in order to qualify. SSI benefits are higher than those available under
(...continued)
estimates for income year 2003. It’s uncertain whether model changes may have contributed the sudden aberration in
trend of estimated EITC receipt.
45
For example, a disabled child might qualify for SSI, while the parent could potentially qualify for AFDC, or vice
versa if the parent were disabled. For a discussion, see David C. Stapleton, David C. Wittenburg, and Michael E.
Fishman, et al., “Transitions from AFDC to SSI Before Welfare Reform,” Social Security Bulletin, vol. 64, no. 1
(2001), pp. 84-114.
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AFDC and TANF. Additionally, SSI benefits are fully federally funded, though some states
provide supplementary benefits on top of the federal SSI benefit. In contrast, AFDC benefits were
jointly funded by states and the federal government, through federal matching dollars and under
TANF through a fixed-dollar federal block grant. As such, if all other things were equal, both
individuals and states would do better financially by shifting persons potentially eligible for
TANF to SSI, assuming the person was unlikely to be able to become gainfully employed.
Several administrative changes to SSI made it easier for children to be ruled eligible for the
program during the early 1990s,46 which could have contributed to increased SSI receipt among
families, including those headed by single mothers.
Unemployment Insurance (UI) Benefits
Receipt of Unemployment Insurance (UI) benefits among families headed by “earnings poor”
single mothers has risen concurrent and consequent to the three economic recessions that
occurred over the 27-year period examined (Figure 12). With each recession, UI receipt among
these families has increased over that of the previous recession. For example, in the aftermath of
the 1990-1991 recession, 7.5% of all “earnings poor” single mother families reported UI receipt
in 1992; following the 2000 recession, 9.6% reported UI receipt in 2002; and in the most recent
recession, 11.4% reported UI receipt. The higher incidence of UI receipt in 2002 than in 1992
most probably reflects a higher incidence of UI eligibility in the more recent period, due to
increased employment of single mothers, as the two recessions were of equal length, and the
unemployment rate among women maintaining families was slightly lower in 2002 than in 1992
(see Figure 10, shown earlier). UI receipt increased markedly after 2007, consequent to the
recession. In 2007, 4.7% of “earnings poor” single mothers reported receiving UI benefits; by
2010, the share had increased by nearly three times, with 13.5% reporting UI receipt. The
unemployment rate among earnings-poor single mothers has since dropped to 8.0%, in 2013. The
higher incidence of UI receipt among these mothers consequent to the most recent recession
reflects both the severity of the recession and congressional response to it, whereby the duration
for which the unemployed may receive UI benefits had been extended through the end of 2013.47
Increased employment among single mothers subsequent to 1996 welfare reform likely led to
more mothers being covered in UI in the most recent recession than in previous ones.
Food Stamp/Supplemental Nutrition Assistance Program (SNAP)
Benefits
Food Stamp/SNAP benefit receipt is depicted by the green line in Figure 12. The figure shows
that Food Stamp/SNAP receipt reached a historical peak among “earnings poor” single mother
families in 1993 (69.3%), subsequent to the 1990-1991 recession. Food Stamp receipt for this
group of families reached an historical low in 2002, with 48.3% reporting benefit receipt. The
comparatively low rate of Food Stamp receipt in 2002, compared to earlier periods, may in part
be attributable to the decline of such families on AFDC/TANF, as persons who enrolled in those
programs were generally enrolled in Food Stamps automatically through administrative
processes. The figure shows a modest rise in Food Stamp receipt from 2002 to 2005, subsequent
46
Ibid., p. 86.
For further discussion, see CRS Report RL34340, Extending Unemployment Compensation Benefits During
Recessions, by (name redacted) and (name redacted).
47
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Welfare, Work, and Poverty Status of Female-Headed Families with Children: 1987-2013
to the 2000 recession, and a more substantial rise from 2007 to 2009, consequent to the most
recent recession. Still, the SNAP benefit receipt rate among the depicted families in 2009 (60.2%)
was nearly identical to that of Food Stamps in 1989 even though economic conditions in 2009
were much worse. By 2013, 64.0% of “earnings poor” single-mother families received SNAP
benefits—12.8 percentage points above its pre-recession low (51.2% in 2007).
Additional Child Tax Credit (ACTC)
Finally, the figure shows estimated receipt of the Additional Child Tax Credit (ACTC) among
depicted families.48 Census Bureau estimates of ACTC receipt on the CPS are first available in
2004. As discussed earlier (in “Tax Rebates, Reductions, and Credits”), the Emergency and
Economic Stabilization Act of 2008 (EESA; P.L. 110-343) temporarily lowered the income
threshold for receipt of the ACTC in tax year 2008. There appears to be no discernible effect of
the provision from 2007 to 2008 in the CPS/ASEC estimates for depicted families. However, the
figure shows that estimated ACTC receipt more than doubled from 2008 (21.5%) to 2009
(45.8%). This large increase in ACTC eligibility reflects changes in the American Recovery and
Reinvestment Act (ARRA; P.L. 111-5), which lowered the ACTC income threshold to $3,000,
first taking effect in 2009. In 2013, estimated receipt of ACTC by “earnings poor” single-mother
families, at 45.9%, remained well above its pre-ARRA level.
As shown earlier in Figure 6, single mothers’ poverty status has improved since 1993. Changes in
the economy and changes in welfare policy and other programs, such as the EITC, have both
direct and indirect effects on income and poverty. However, the official U.S. poverty measure
counts only family pre-tax cash income (excluding capital gains and lump sum or one-time
payments) against families’ poverty thresholds (which vary by family size and composition) to
determine whether a family is counted as poor. The “official” U.S. poverty definition does not
include the value of in-kind benefits, such as Food Stamp/SNAP benefits, or public housing
subsidies, nor does it include the effects of taxes or tax credits such as the EITC and the ACTC.
Inclusion of in-kind benefits and refundable tax credits, net of taxes families pay, provides a more
comprehensive income definition than the official poverty income definition. Failing to include
them can have important implications for how one assesses the role of income support policies,
especially in the post-1996 welfare reform era and over the course of the most recent recession
and recovery. Additionally, other unrelated household members may contribute to the family’s
economic well-being, but determining the extent to which resources are shared among unrelated
household members is difficult.
Anti-Poverty Effects of Cash Income, Taxes, and
Transfers on Poverty—Female-Headed Families
with Children
Figure 13 shows the marginal effects of income from a number of sources on poverty.
Components of family income are sequentially added and measured against families’ poverty
thresholds, as one moves from the top line of the chart to subsequent lines below.49 Starting with
48
49
As with the EITC, ACTC estimates are Census Bureau model-based estimates.
The order in which income components are added can influence the measured marginal effect of each.
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Welfare, Work, and Poverty Status of Female-Headed Families with Children: 1987-2013
the top line, the effect on poverty of family earnings alone is depicted. Poverty measures based on
earned income alone give an indication of the labor market’s effect on poverty, in the context of
other sources of income individuals, families, and households might receive. Moving to the
second line down, the effect of earnings plus all other cash income other than cash welfare
(AFDC, TANF, or state General Assistance) is shown. Adding cash welfare, the third line down,
to those income sources shown above, completes the accounting of pre-tax cash income that is
used under the “official” U.S. poverty definition.
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Figure 13. Effects of Earnings,Transfers, and Taxes on Family Poverty
and Household Low-Income Status of Single Mothers, 1987 to 2013
Source: Prepared by the Congressional Research Service (CRS) based on analysis of U.S. Census Bureau 1988 to 2014 Current Population Survey (CPS) Annual Social
and Economic Supplement (ASEC) data. See Table C-11 for supporting data.
* Census Bureau estimates of Economic Stimulus Payments received in 2008, Economic Recovery Payments received in 2009, and Making Work Pay (MWP) tax credits
received in 2009 and 2010.
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Welfare, Work, and Poverty Status of Female-Headed Families with Children: 1987-2013
Addition of Income from Sources Not Included in the “Official”
U.S. Poverty Measure
As noted above, the “official” U.S. poverty definition is based on families’ pre-tax cash income. It
excludes a number of benefits families receive, such as Food Stamp/SNAP benefits, and
refundable tax credits, such as the EITC and ACTC, and it does not take into account taxes
families might pay in the form of federal payroll (FICA) taxes and federal and state income taxes.
In this section, some of the weaknesses of the current “official” poverty measure are addressed,
by sequentially adding a number of other income sources to, and subtracting selected taxes from,
cash income to develop a more comprehensive income measure for assessing poverty than that
offered by the “official” poverty income measure. For example, the market value of Food
Stamp/SNAP benefits is added to pre-tax cash income, to assess their antipoverty effects. Next,
the EITC is added in, net of any FICA, federal, and state income taxes (including state refundable
tax credits). The poverty reducing effect of the ACTC is then assessed, followed by economic
stimulus and recovery payments families may have received in 2008 and 2009, respectively, and
the Making Work Pay (MWP) tax credit in 2009 and 2010.
A cautionary note is in order with regards to assessing the effects tax credits such as the
EITC and ACTC have on family income and poverty. The effects of the credits shown in the
CPS/ASEC are estimates of the amount of the EITC and/or ACTC benefits families would
have been eligible to receive based on their calendar year (i.e., tax year) income. However,
while the tax credits’ effects are shown for the depicted year in which the credits are earned,
families would not actually receive the credits until early in the following year, after filing their
federal income tax forms.
Finally, the bottom-most line of Figure 13 shows the effects of counting all income in the
household in which the single mother lives, not just that of her related family members, and
compares it to “household low-income thresholds.” The household low-income thresholds used
here are scaled the same way as Census Bureau family income poverty thresholds, but are based
on household (rather than family) size and composition. It is important to note that official
poverty measurement is based on a family concept, which assumes that family members share
income and economies of scale that result from shared living arrangements. It is generally agreed
among researchers that assumptions regarding income sharing and shared economies of scale
among related family members, who have ties based on blood, marriage, and adoption, do not
apply to the same extent among unrelated household members. Consequently, these estimates of
household low-income status likely overstate the effect of household income on reducing poverty
among families headed by single mothers.
Effect of Earnings and Other Non-welfare Cash Income on Poverty
Figure 13 shows that between 1993 and 2000, single mothers’ poverty, based on family earnings
alone (top line), fell from 56.2% to 40.8%, reaching a historical low for the 27-year period. Their
“earned-income poverty rate” rose consequent to two recessions, reaching 44.3% in 2004, and
rose again from 44.7% in 2007 to 50.1% in 2010. Adding other cash income, except cash welfare
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Welfare, Work, and Poverty Status of Female-Headed Families with Children: 1987-2013
(second line down), to family earnings reduces poverty in 1993 from 56.2% (top line) to 47.4%
(line 2), and in 2013 from 47.6% to 38.3%.
Effect of Cash Welfare on Poverty
Cash welfare benefits have only a small impact on the poverty rate, as these benefits generally are
not sufficient, even when combined with other cash income, to lift families above the federal
poverty threshold. In the vast majority of states, the level of earnings or other cash income at
which states’ cash welfare benefits under AFDC/TANF become unavailable for a family are well
below the poverty line. For example, in July 2013, in only six states could a single mother with
two children have earnings at or above the poverty line and still continue to receive TANF cash
assistance after one year of benefit receipt.50 Consequently, cash welfare benefits have little
impact on the poverty rate. The addition of cash welfare (line 3, representing the official income
definition for measuring poverty) reduces poverty only slightly: from 47.4% (line 2) to 45.2%
(line 3) in 1993, and from 38.3% to 38.0% in 2013. Nonetheless, cash welfare benefits can have a
significant impact on the level of poor families’ incomes, affecting the degree to which their
incomes fall below the poverty income standard. This impact is not captured by changes in the
poverty rate as shown in Figure 13.
The Invisible Safety Net—Effect on Poverty of Counting Selected
Income Sources Not Included in the “Official” Poverty Measure
As noted above, the “official” U.S. poverty measure counts only families’ pre-tax cash income for
purposes of poverty determination. Inclusion of selected benefits, such as food assistance (in the
form of Food Stamp/SNAP benefits), the refundable EITC, and the partially refundable ACTC,
allows for a more comprehensive assessment of the role of government policy in addressing
vulnerable families’ income needs.
Effect of Food Stamp/SNAP Benefits on Poverty
SNAP benefits played a substantively larger role in reducing poverty among single mothers and
their families in the wake of the recent recession, than in any previous period. The fourth line
from the top in Figure 13 shows the effect on the poverty rate of single mothers by counting the
value of Food Stamp/SNAP benefits. The line shows that Food Stamps/SNAP reduced the
poverty rate of single mothers by about 2 to 3 percentage points over most of the period (compare
the reduction in poverty from line 3 to line 4). In 2009, SNAP benefits nearly offset the rise in
pre-tax cash income poverty (i.e., the “official” poverty measure) from 2008. Whereas on a pretax cash-only basis, poverty among single mothers and their families increased from 33.8% in
2008 to 37.6% in 2009 (line 3), SNAP benefits, when added to cash income, caused the poverty
rate of single mothers to remain essentially level over the two years (33.% in 2008, and 33.5% in
2009). In 2010, SNAP benefits continued to play an important role in reducing poverty among
50
Alaska, Connecticut, Hawaii, Illinois, Minnesota, and Virginia. See. Erika Huber, David Kassabian, and Elissa
Cohen, Welfare Rules Databook: State TANF Policies as of July 2013, The Urban Institute, Washington, DC,
September 2014, Table IV.A.6, Maximum Income for Ongoing Eligibility for a Family of Three, July 2013, pp. 176177 http://www.urban.org/UploadedPDF/413208-Welfare-Rules-Databook.pdf.
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single mothers and their families, reducing poverty from 39.5% under the “official” measure to
35.8% when SNAP benefits are added to family cash income. However, unlike 2009, SNAP
benefits in 2010 and 2011 did little to alter the trend toward increased poverty being driven by
unemployment’s effect on earned-income poverty (top line). After counting SNAP benefits, the
poverty rate among single mothers increased from 33.5% to 35.8% from 2009 to 2010, where it
essentially remained unchanged for the next two years. In 2013, single mothers’ post-SNAP
benefit poverty rate fell to 34.3%,
The increased role of SNAP benefits in addressing the rising cash income deficiency of single
mothers in the wake of the recent recession reflects not only an increase in the take-up rate of
SNAP benefits by low-income families headed by single mothers, seen earlier in Figure 12, but
also the legislatively enacted increase of SNAP benefit payments to needy households under
ARRA. As noted earlier (in “Supplemental Nutrition Assistance Program (SNAP/Food Stamp)
Benefits”), ARRA SNAP provisions resulted in an average 15% increase in monthly SNAP
benefits going into effect in April 2009 and remaining in place through October 2013.
Net Effect of the EITC on Poverty
The EITC has had a comparatively large poverty-reducing effect on single mothers and their
families since legislative expansions to the credit from 1993 took effect. The poverty reducing
effect of the EITC51 is shown net of FICA, federal, and state income taxes (including refundable
state tax credits) (line 5), when added to family cash income and Food Stamp/SNAP benefits (line
4). As discussed earlier (in “EITC Expansions—“Making Work Pay””), a major expansion of the
EITC, passed by Congress in 1993 and phased in between 1994 and 1996, increased the amount
of the EITC work bonus families might receive. The anti-poverty effectiveness of the EITC net of
taxes was nearly six times greater in 2013 than in 1993.52 As receipt of the EITC is conditioned
on earnings, the growing impact of the EITC in part reflects the rise in work rates among single
mothers. Among those who are working and poor (before counting the EITC), the EITC helps lift
the income of some above the poverty line. Although the EITC expansion provided additional
income to low-income families who were already working, it may also have helped induce
increased employment among family heads with low to moderate earnings potential, and thus
contributed to the lower levels of poverty based on earned income alone that have been evidenced
since 1993 (shown as the top line in the chart).
Note, too, that to the extent that changes in cash welfare programs in recent years have
encouraged work (such as work requirements and increased earnings disregards), these changes
may have had a direct effect on poverty by increasing the incidence of work (earnings), which in
turn resulted in expanded EITC receipt among single mothers.
51
Note that the value of the EITC on the CPS is based on Census Bureau imputations, rather than actual reported tax
credits. Also, the EITC is different from most sources of income, as most families receive the EITC as a lump sum
refund at the beginning of year following that in which income used in determining the credit was earned.
52
In 1993, the after-tax poverty rate (counting Food Stamps/SNAP) among single mothers dropped from 42.7% (line 4)
to 41.9% (line 5), a 0.8 percentage point (1.8%) reduction. In 2013, the EITC reduced poverty from 34.3% to 30.7%, a
3.6 percentage point (10.5%) reduction.
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Welfare, Work, and Poverty Status of Female-Headed Families with Children: 1987-2013
Effect of the ACTC on Poverty
The Additional Child Tax Credit (ACTC; the refundable portion of the Child Tax Credit) can
provide a refund to tax filers with one or more qualified children, even if they have no federal
income tax liability. Overall, tax filers may receive a Child Tax Credit (CTC) up to $1,000 per
qualifying child. If the CTC is greater than the amount of income tax owed, the tax filer may be
eligible to claim the ACTC. As noted earlier (in “Tax Rebates, Reductions, and Credits”), The
Emergency and Economic Stabilization Act of 2008 (EESA; P.L. 110-343) reduced the ACTC’s
refundable income limit from $12,050 to $8,500 for 2008. ARRA (P.L. 111-5) further reduced the
credit’s refundable income limit from a scheduled $12,550 in 2009 to $3,000 for 2009 and 2010,
and P.L. 111-312, extended the ACTC’s reduced refundable income limit for another two years,
through 2011. (As noted earlier, the American Taxpayer Relief Act of 2012 extends these
provisions through 2017.)
As shown above (Figure 13), the lowered ACTC refundable income limit for 2009 through 2013
reduced the poverty rate of single mothers and their families by 1.7 percentage points in 2009, 1.1
percentage points in 2010, 1.3 percentage points in 2011, 1.4 percentage points in 2012, and 1.5
percentage points in 2013 (6th, compared to 5th, line down). Prior to the legislative changes
discussed above, most poor families were beyond the credit’s reach.
Effect of Federal Economic Stimulus and Recovery Payments and Making
Work Pay Tax Credits on Poverty
In addition to the changes to the EITC and ACTC made as part of legislative action to stimulate
the economy, the Census Bureau provides estimates of economic stimulus payments families may
have received in 2008, and economic recovery payments in 2009, and MWP tax credits in 2009
and 2010 (see earlier discussion in “Tax Rebates, Reductions, and Credits”). The effects of
economic stimulus and economic recovery payments and MWP tax credits on single mothers’
poverty status for 2008 through 2010 are shown together on line 6 above (Figure 13). Economic
stimulus/recovery payments and MWP tax credits reduced the poverty rate among single mothers
by 1.1 percentage points in 2008, and by 0.6 percentage points in 2009 and 2010.
Effect of Unrelated Household Members’ Income on Poverty
The household low-income line (bottom line, Figure 13) shows that if all household members’
income is counted, as though shared equally among household members, the poverty rate among
single mothers would drop by at most 3 to 5 percentage points over the 1987 to 2013 period.
Using the household, as opposed to the family, as the economic unit for determining poverty
reduces the post in-kind transfer, post-tax poverty rate in 2013 from 29.2% to 24.0%. Again, this
is most likely an overstatement of the possible effect that shared household living arrangements
might have on single mothers’ poverty status because of the uncertainty about the extent to which
such income is actually shared.
Comparison of the Effects of Earnings, Transfers, and Taxes on
Poverty, by Single Mothers’ Work Status
The analysis above examines the effects of earning, transfers, taxes, and other income on families
headed by single mothers. Here, the effects are broken out by whether or not mothers worked at
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Welfare, Work, and Poverty Status of Female-Headed Families with Children: 1987-2013
any time during the year. There is a stark contrast in the incidence of poverty among single
mothers who worked at any time during a year, and those who did not. Moreover, selected income
“safety-net” programs have quite different effects in reducing poverty among the two groups, as
shown in Figure 14 and Figure 15, respectively. The figures show, for example, that mothers
who worked at any time during the year were less likely to be poor based on their earnings alone
than mothers who did not work based on total household income.
In comparing across the two figures, it should be noted that the scale shown in Figure 14
ranges from 0% to 50%, while that of Figure 15 ranges from 50% to 100%, as if it were
stacked above in Figure 14 (i.e., the two figures’ scales are the same with regard to relative
range of their vertical axes, but the levels at which those axes start differ).
Several observations follow.
Single Mothers Who Worked During the Year—Figure 14
Effects of Selected Cash Income Sources on Poverty
•
Among single mothers who worked during the year, their incidence of poverty
based on earned income alone was at a low in 2000, and has increased markedly
since 2005 (top line).
•
Cash income from sources other than UI and cash welfare (second line down) has
had a relatively consistent effect of reducing their poverty rate from that
measured by earnings alone, ranging from 6 to 8 percentage points over the 27year period.
•
In correspondence with the past recession, UI benefits in 2009 through 2012
reduced their poverty rate by about 1 percentage point, which was about the same
as in 2002, the previous peak year of UI poverty reduction which also
corresponded with a recession.
•
Adding in SSI benefits has little effect on poverty reduction among this group,
largely by virtue that mothers worked during the year, and were consequently
unlikely to have had an SSI qualifying disability (although other members of
their family might).
•
AFDC, TANF, and GA have very little impact on poverty reduction among single
mothers who worked in recent years, but had more measurable effects in the first
part of the 27-year period, when poor mothers were more likely to combine work
with welfare (refer back to Figure 11).
Based on the “official” poverty measure, which takes into account most sources of pre-tax cash
income families receive, the poverty rate among single mothers in 2013 was 3.9 percentage points
higher than in 2001—a historical low for the period.
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Welfare, Work, and Poverty Status of Female-Headed Families with Children: 1987-2013
Effects on Poverty of Selected Income Sources Not Included in the “Official”
Poverty Measure
•
Food Stamp and SNAP benefit receipt have had a sizeable effect on poverty
reduction, reducing the poverty rate among working single mothers by 3.3
percentage points in 2013.
•
The EITC (net of FICA and federal and state income taxes) has contributed to
substantial reductions in poverty among working single mothers, especially after
1993 legislated expansions to the credit began taking effect. In 2013, net EITC
among working single mothers reduced their post SNAP benefit poverty rate by
5.2 percentage points, from 24.0% to 18.8%.
•
ARRA’s reduction of the ACTC’s refundable income limit to $3,000, effective in
2009, is readily apparent by the substantially larger decrease in poverty resulting
from the credit, than in earlier years. After including the ACTC, the incidence of
poverty among single mothers with any work during the year reached a historical
low in 2009 (14.9%). In 2009, the ACTC accounted for an additional 2.1
percentage point reduction in poverty beyond that of the post-EITC poverty level
in 2009, compared to a 0.3 percentage point reduction in 2008, before the
reduction in the credit’s refundable income limit. In 2013, the post-ACTC
poverty rate was 16.9%—2 percentage points above its 2009 historical low.
•
Economic Stimulus payments received in 2008, reduced poverty among single
mothers who worked during the year by 1.3 percentage points. Combined
Economic Recovery Payments and Making Work Pay (MWP) tax credits helped
reduce poverty among working single mothers by 0.7 percentage points in 2009,
and in 2010, the MWP tax credit reduced poverty among this group by 0.6
percentage points.
•
If the income of all unrelated household members is included as income, the
poverty rate among working single mothers is estimated at 13.3% in 2013, which
compares to an “official” poverty rate of 27.3%.
Note that working mothers could also incur work-related expenses (e.g., child care,
transportation, uniforms) that are not accounted for here. Inclusion of such expenses, if available,
would result in somewhat higher poverty rates than those shown here.
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Figure 14. Single Mothers Who Worked at Any Time During the Year:
Effects of Earnings,Transfers, and Taxes on Family Poverty and Household Low-Income Status,
1987 to 2013
Source: Prepared by the Congressional Research Service (CRS) based on analysis of U.S. Census Bureau 1988 to 2014 Current Population Survey (CPS) Annual Social
and Economic Supplement (ASEC) data. See Table C-12 for supporting data.
* Census Bureau estimates of Economic Stimulus Payments received in 2008, Economic Recovery Payments received in 2009, and Making Work Pay (MWP) tax credits
received in 2009 and 2010.
CRS-40
Figure 15. Single Mothers Who Did Not Work During the Year:
Effects of Earnings,Transfers, and Taxes on Family Poverty and Household Low-Income Status,
1987 to 2013
Source: Prepared by the Congressional Research Service (CRS) based on analysis of U.S. Census Bureau 1988 to 2014 Current Population Survey (CPS) Annual Social
and Economic Supplement (ASEC) data. See Table C-13 for supporting data.
* Census Bureau estimates of Economic Stimulus Payments received in 2008, Economic Recovery Payments received in 2009, and Making Work Pay (MWP) tax credits
received in 2009 and 2010.
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Welfare, Work, and Poverty Status of Female-Headed Families with Children: 1987-2013
Single Mothers Who Did Not Work During the Year—Figure 15
As a precautionary reminder, the reader should note that the origin of the vertical axis begins
at a poverty rate of 50%.
Effects of Selected Cash Income Sources on Poverty
•
The top-most line indicates that even though single mothers themselves did not
work during the year, and thus had no earnings, other related family members
may have worked, accounting for an “earnings-only” poverty level around 90%
in the pre-welfare reform era (1996 and earlier), and around 85% since 2000.
•
The next line down, which includes most all other sources of income other than
UI benefits and cash welfare, shows a somewhat greater reduction in poverty in
the TANF era (about 10 percentage points), than in the pre-welfare reform era
(about 5 percentage points). In part, this may be due to a somewhat greater
tendency of nonworking single mothers to be living in “extended” families (i.e.,
living with family members other than just their children) in the post-welfare
reform era, than before. For example, in 1996, 24% of nonworking single
mothers lived in extended family settings, but by 2000, 33% were living in such
settings.53
•
The figure shows UI benefits, when added to earnings and other cash income
from the line above, accounted for a 2 percentage point reduction in poverty over
the 2009-2011 period—over twice the effect in 2002, the previous peak year of
UI poverty reduction for this group.
•
Comparing the relative effects of SSI and TANF/AFDC/GA on poverty over the
period, SSI has assumed a greater role in poverty reduction among nonworking
single mothers in the TANF era, than in the pre-TANF era, and the role of TANF
in reducing poverty among this group is substantially less than what it was under
AFDC.
•
Examining just the trend in “official” poverty among nonworking single mothers,
their poverty rate in the post-welfare reform era has averaged 8 percentage points
below what it was under AFDC. In 2002, which marked a historical low poverty
rate for this group, their poverty rate (66.9%) was nearly 14 percentage points
below their peak rate of 80.8% in 1991. In 2013, 70.0% of nonworking single
mothers were poor—still well below their pre-welfare reform levels.
53
CRS estimates from the CPS/ASEC. About 25% of nonworking single mothers, on average, lived in extended
families in the pre-TANF era (1987-1996), compared to about 28% in the TANF era.
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Welfare, Work, and Poverty Status of Female-Headed Families with Children: 1987-2013
Effects on Poverty of Selected Income Sources Not Included in the “Official”
Poverty Measure
•
Food Stamp/SNAP benefits appear to have had a somewhat smaller effect on
poverty reduction among nonworking single mothers in the post-welfare reform
era (2.9 percentage point reduction, on average) than earlier (about 3.6
percentage point reduction, on average, in the pre-welfare reform era). However,
in 2009, reflecting ARRA’s SNAP benefit provisions, discussed earlier
(“Supplemental Nutrition Assistance Program (SNAP/Food Stamp) Benefits”),
SNAP benefits reduced poverty for this group from the “official” poverty rate of
69.9%, to 64.7%, a 5.2 percentage point reduction; in 2010, SNAP reduced
poverty among this group by 4.1 percentage points, by 3.9 percentage points in
2011, 3.6 percentage points in 2012, and 4.8 percentage points in 2013, the last
year in which the ARRA SNAP benefit expansions were in effect.54
•
In that these mothers did not work during the year, the figure shows refundable
and partially refundable tax provisions have had very little measurable effect on
poverty reduction for this group; nor did economic stimulus or recovery
payments. In fact, the after-tax poverty line is at times above the Food
Stamp/SNAP line, indicating that some poor families had members with a tax
liability, net of any credits.
If the income of all unrelated household members is included as income, the poverty rate among
nonworking single mothers is estimated at 66.1% in 2013. Counting unrelated household
members’ income reduced poverty among nonworking single mothers by 10.2 percentage points
in 2013, compared to 3.6 percentage points in 1987. This largely reflects what has been a growing
tendency of nonworking single mothers to be living with other unrelated household members. In
2013, for example, 21% of nonworking single mothers were living with other unrelated family
members, of which nearly nine out of ten were designated as “cohabiting partners” (see Table C14). In comparison, about 9% of nonworking single mothers lived with unrelated family members
in 1987.55
Trend in Poverty among Children in Female-Headed
Families under Selected Income Measures
Figure 16 depicts the trend in poverty among children in female-headed families under four of
the selected income measures applied to single mothers, above—earnings only poverty, pre-tax
cash income poverty (the official poverty measure), post-tax and Food Stamp/SNAP benefit
poverty, and total household post-tax post-transfer income poverty. The figure shows, for
example, that the official poverty rate among children in female-headed families increased from
41.3% in 2007 to 46.3% in 2010—a 5.2 percentage point increase, commensurate with a 5.3
percentage point increase in “earnings only” poverty over the period resulting from the recession.
54
The ARRA SNAP benefit expansion reverted to pre-ARRA levels November 1, 2013.
CRS estimates from the CPS/ASEC. Beginning with the 2007 CPS/ASEC cohabiting couples are identifiable based
on self-report. In earlier years, cohabiting couples are identifiable indirectly by inference. The method used here, for
CPS/ASEC years before 2007 is based on households with two unmarried adults, who are unrelated and of the opposite
sex, and no other adults reside in the household.
55
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Welfare, Work, and Poverty Status of Female-Headed Families with Children: 1987-2013
In contrast, under a more comprehensive income definition that includes tax credits net of payroll
taxes and Food Stamp/SNAP benefits (the third line down), their poverty rate over the same
period rose by just under one percentage point, from 33.3% in 2007 to 29.7% in 2010. The
official poverty rate among children in female-headed families fell to 44.1% in 2013, but remains
5.7 percentage points above its historical low of 38.4% in 2001. In contrast, under a more
comprehensive accounting of income that includes the effects of tax credits net of payroll taxes
and SNAP benefits, the corresponding child poverty rate in 2013 was 33.4%, compared to an
official rate of 44.1%, and was only 1.6 percentage points above its historical low of 31.8% in
2002. When all household income is included (the bottom-most line), the child poverty rate was
estimated at 28.0%—essentially at a statistically tied historical low.
Figure 16. Poverty Among Children in Female-Headed Families Under
Alternative Measures, 1987 to 2013
Source: Prepared by the Congressional Research Service (CRS) based on analysis of U.S. Census Bureau 1988
to 2014 Current Population Survey (CPS) Annual Social and Economic Supplement (ASEC) data. See Table C16 for supporting data.
Discussion/Conclusion
CRS analysis of 27 years of U.S. Census Bureau data presented in this report shows a dramatic
transformation in single mothers’ welfare, work, and poverty status over the period. 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, with more mothers working, and fewer relying on cash
welfare to support themselves and their children, in part in response to structural changes to
income “safety-net” programs.
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Progress towards achieving the often elusive and conflicting dual goals of reducing child poverty
and cash welfare dependency is only partially apparent under the official U.S. poverty measure,
but much more so under an alternative, more comprehensive income measure.
Poverty under the official U.S. poverty measure, which is based on pre-tax cash income, shows
that since 2000, which marked a historical low, the poverty rate among single mothers increased
in step with two recessions. By 2010, the official poverty rate for single mothers had reached a
post-2000 high, and remained at that level through 2012, before falling somewhat in 2013. In
2013, the official poverty level was still below pre-1996 welfare reform levels, despite two
recessions since 1996.
Using a more comprehensive income definition than that used by the official poverty measure
indicates that poverty among single mothers and their children in 2009, rather than having
increased since 2000, was at or near a 27-year low when Food Stamp/SNAP benefits and workrelated refundable tax credits are taken into account. In particular, congressional action in
response to the recession, which increased SNAP benefits and extended the reach of refundable
tax credits, contributed to a decline in poverty among single mothers and their children in the
midst of the recession. (See Figure 13 and Figure 16, for example).
The Invisible Safety-Net—Benefits not Officially Counted Toward
Poverty Reduction
While the provision of cash welfare has fallen dramatically under TANF, poor and lower-income
families with earnings are more likely to receive assistance in the form of supplemental nutrition
assistance, or refundable income credits administered through federal and state tax systems.
Neither in-kind benefits, such as those provided through Food Stamps/SNAP, nor refundable
credits, such as the EITC, or partially refundable ACTC, are counted as income under the official
U.S. poverty measure, yet these three programs are among the 10 largest, in terms of federal
spending for people with low income.56 Clearly, these programs constitute important strands in
the nation’s income safety-net, yet they generally are not taken into account when assessing its
strengths and weaknesses. Under an alternative, more comprehensive, measure of poverty than
the official one, which includes the net effects of refundable tax credits and Food Stamp/SNAP
benefits, a quite different assessment of the effects of the safety net on poverty among single
mothers and their children emerges.
Transformation of Income Safety-Net Programs Toward WorkConditioned Support
Since the eve of 1996 welfare reform, work-conditioned requirements for individuals’ receipt of
government assistance have become more prevalent. Prior to 1996 welfare reform, federal law
(The Family Support Act of 1988; P.L. 100-485) had extended work requirements (which
included work preparation activities, such as education and training) to mothers receiving AFDC
to mothers with a child as young as three, and at state option, to mothers with a child as young as
age one. Child care funding was increased to make it possible for mothers to go to work. A
56
CRS Report R41625, Federal Benefits and Services for People with Low Income: Programs, Policy, and Spending,
FY2008-FY2009, by (name redacted).
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Welfare, Work, and Poverty Status of Female-Headed Families with Children: 1987-2013
number of states experimented with changes to their welfare programs under waivers of federal
rules, granted by DHHS. Among the features tested under waiver authority were efforts to
strengthen work requirements, experiments to test models of facilitating the transition from
welfare to work, and the use of sanctions for noncompliance with welfare rules, among others.
Expansions to the EITC, under both President George H. W. Bush, and President Clinton,
increased the financial rewards of work, through earnings supplements administered through the
tax system. The EITC helped to offset the welfare income loss, or implicit tax, that mothers might
face as they moved from welfare to work.
The 1996 welfare reform law repealed the 61-year-old AFDC program, replacing it with TANF.
TANF ended the entitlement of low-income families with children to federal assistance. It limits
the provision of federal assistance under the program to five years57—states are allowed to set
shorter time limits. Under TANF, states no longer receive an open-ended federal matching grant,
as they did under AFDC, but rather a fixed dollar block grant (with the possible addition of
recession-related contingency funds). Adults must be engaged in approved “work activities”
within two years of initial TANF receipt, subject to sanction for noncompliance. Under TANF,
federal work participation standards (i.e., “work-requirements”) apply to states’ TANF caseloads,
and adult recipients are required to be engaged in work, or work-related activities after two years
of benefit receipt. TANF has provided states increased flexibility and limited federal
requirements, compared to AFDC, but with fixed federal dollars.
Since 1996 welfare reform, cash welfare support for “earnings poor” mothers and their children
has contracted, whereas work-based support has increased. The EITC, for example, has a direct
effect on poverty reduction, by encouraging work, increasing earnings, and reducing reliance on
cash welfare. One estimate suggests that single mothers’ employment in 1996 was 7 percentage
points higher than it would have been otherwise, absent the EITC.58 This “work/earnings
inducing” effect of EITC among single mothers is captured in official poverty statistics, as part of
families’ earnings, but the credit itself—the earnings supplement which induces work and
earnings—is not. Likewise, the ACTC may also have a potential work inducing effect among
single mothers, but, like the EITC, the effects of the credit itself on poverty reduction are not
measured under the official poverty income definition. Additionally, through earnings, working
individuals not only gain potential access to tax benefits, such as the EITC and ACTC, which
with full-time work exceeds cash welfare assistance they might have received by not working, but
also earn credit towards insurance coverage under Unemployment Insurance, as well as Social
Security retirement, disability, and death benefits for themselves, their dependents, and survivors.
The report shows that receipt of cash welfare (AFDC, TANF, or General Assistance) has declined
substantially among single mothers since the passage of TANF, and their engagement in work has
increased (Figure 8). The transformation from welfare dependency to work appears to have
begun in the years immediately preceding 1996 welfare reform, as the economy prospered, and as
a number of work supports (e.g., EITC, and child care assistance) were strengthened. Moreover,
under the official U.S. poverty measure, the poverty rate of single mothers (Figure 6), and that of
their children (Figure 4), has consistently been lower since welfare reform, than before. Prior to
57
Up to 20% of the TANF caseload can be extended to receive assistance beyond five years due to “hardship,” as
defined by the states. See CRS Report RL32748, The Temporary Assistance for Needy Families (TANF) Block Grant:
A Primer on TANF Financing and Federal Requirements, by (name redacted).
58
Bruce D. Meyer and Dan T. Rosenbaum, “Welfare, the Earned Income Tax Credit, and the Labor Supply of Single
Mothers,” Quarterly Journal of Economics, vol. CXVI, no. 3 (2001), pp. 1163-1114.
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Welfare, Work, and Poverty Status of Female-Headed Families with Children: 1987-2013
TANF, poor single mothers were more likely to be receiving cash welfare (AFDC or GA) than to
be working; after passage of TANF, just the opposite was true: poor single mothers were more
likely to be working than receiving cash welfare (TANF or GA) (Figure 11).
TANF and other work-promoting policies have helped to reduce poverty among single mothers
and their children through increased earnings. Based on earnings alone, poverty among single
mothers who worked reached a historical low for the period, in 2000 (Figure 14), as did their
poverty rate based on total pre-tax cash income, under the “official” U.S. poverty measure.
Following the 2000 recession, poverty among working single mothers increased slightly, and
much more so since 2007, in step with, and consequent to, the 2007-2009 recession.
Cash Welfare’s Residual Safety-Net Role
Welfare reform ended the provision of cash assistance as an entitlement, by replacing AFDC with
a fixed dollar block grant for the provision of Temporary Assistance for Needy Families. Under
TANF, a greater share of funds goes toward services (child care, social services) either directly, or
through transfers to other programs (CCDBG, Title XX Social Services) than towards direct cash
support. While many of these services may help to reduce dependency, and promote selfsufficiency through work, receipt of cash assistance has shrunk markedly in the TANF era. While
TANF caseloads increased modestly in 2009 and 2010 in response to the recession, they are at a
fraction of what they were at their peak, just prior to 1996 welfare reform, and reflect levels not
seen in over 40 years.
The marked decline in cash welfare caseloads since the eve of 1996 welfare reform reflects an
apparent behavioral shift among many single mothers with respect to work and welfare, with
more selecting the former than the latter. A restructuring of income safety-net programs to support
work is likely to have contributed to single mothers’ changed behavior. The EITC appears to be
an important component of the restructured safety net, as it encourages work, even among
mothers whose earnings prospects at initial job entry are low. In most states, full time work at the
minimum wage provides income sufficient for a mother to work her way off of cash welfare. In
lieu of cash welfare, a single mother working full time at the minimum wage will receive the
EITC. Additionally, in 2009 through 2017, due to legislative changes relating to the recession and
recovery, she would be eligible for the ACTC, which provides additional income support for her
children.
Living Arrangements as an Alternative to Welfare
Cash welfare receipt and poverty among single mothers is lower since TANF’s enactment than
before. Some of this effect appears to be due to an increase in work among single mothers.
However, even among nonworking mothers, their receipt of cash assistance and incidence of
poverty under the official measure is lower since welfare reform. It appears that other family
members’ earnings and other cash income has contributed to the lower poverty rates of
nonworking single mothers in the post-AFDC era (see the earlier discussion, Figure 15).
In spite of policies to increase work among single mothers, not all single mothers work, and lack
of work contributes significantly to the likelihood that they and their children will be poor.
However, poor non-working single mothers are much less likely to be receiving cash welfare
assistance under TANF than they did under AFDC (Figure 11). In the post-AFDC era,
nonworking single mothers are somewhat more likely to live in extended family settings than
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Welfare, Work, and Poverty Status of Female-Headed Families with Children: 1987-2013
before.59 It appears that living with other relatives helps to reduce their reliance on welfare and
incidence of poverty under the official poverty measure. Moreover, nonworking single mothers
are considerably more likely (more than twice as likely) to live with other unrelated family
members in the post-AFDC era than before, although income of these unrelated household
members is not taken into account in determining poverty status.60
These alternative living arrangements might help provide an alternative to cash welfare receipt
for some single mothers. Figure 17 suggests that this statement has some bearing. The figure
depicts single mothers by their work and welfare status, according to whether they live
independently with just their children, or whether they live with others, either in an extended
family household with other family members than just her children, or with one or more other,
unrelated, persons, including a cohabiting partner. The figure shows that among mothers who
worked, or received welfare during the year, the majority (roughly 65% to 70%) lived
independently over the period; a minority (roughly 30% to 35%) lived with others (extended
family and/or one or more unrelated persons). Interestingly, both mothers who worked, as well as
those who received welfare, were about equally as likely to live independently, as not, over the
period.
In contrast, nonworking single mothers, as a group, are less likely than their working counterparts
to live independently than mothers who work or receive welfare during the year. In the pre-1996
welfare reform era, nonworking single mothers were slightly less likely to live independently
(roughly 65% to 60%), than their working counterparts (roughly 70% to 65%) or those who
received welfare (also, roughly 70% to 65%). Note that some of these nonworking mothers may
also have received cash welfare during the year, as evidenced earlier in Figure 8. Welfare receipt
among nonworking single mothers may have contributed to their ability to live independently,
apart from other relatives or nonrelatives. While many single mothers selected work as an
alternative to welfare in the years immediately following 1996 welfare reform, others appear to
have found alternative living arrangements instead. In 1996, 62% of nonworking single mothers
were living independently, three years later, only 52% were. Most of this change in living
arrangements was due to an increase in nonworking single mothers’ increased tendency to live in
extended family households, with other relatives (see Table C-14), with the share increasing from
24% in 1996, to 33% by 1999, and then ebbing to 27% by 2001. In more recent years, at least
since 2005, nonworking single mothers have shown a greater tendency to be living with other
nonrelatives, of which most are cohabiting partners (see Table C-14). Whereas in 1987, 65% of
nonworking single mothers were living in independent households, by 2013, only about half
(51%) were. In part, cash welfare in the pre-welfare reform era may have helped some single
mothers to live in independent family settings. Stricter requirements and time limits in the postreform era may have contributed to some mothers’ consideration of living arrangements as an
alternative to cash welfare receipt.
59
On average, 25% lived in extended family settings in the 1987 to 1996 period. Just following welfare reform, the
share living in extended families increased to 29% in 1998 and 33% in 1999, and then to an average of 28% from 2000
to 2013. (Based on CRS estimates from U.S. Census Bureau 1988 to 2014 CPS/ASEC data. See Table C-14 for
supporting data.)
60
In 2013, for example, 21% of nonworking single mothers were living with other unrelated family members, of whom
nearly nine out of ten were designated as “cohabiting partners.” In comparison, about 9% of nonworking single
mothers lived with unrelated family members in 1987. (Based on CRS estimates from U.S. Census Bureau 1988 to
2014 CPS/ASEC data.)
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Welfare, Work, and Poverty Status of Female-Headed Families with Children: 1987-2013
Figure 17. Single Mothers’ Living Arrangements,
by Mothers’ Work and Welfare Status
1987 to 2013
Source: Prepared by the Congressional Research Service (CRS) based on analysis of U.S. Census Bureau 1988
to 2014 Current Population Survey (CPS) Annual Social and Economic Supplement (ASEC) data. See Table C14 for supporting data.
Illness or Disability Among Nonworking Single Mothers
Nonworking single mothers are much more likely to attribute illness or disability as the reason for
not working in the post-welfare reform era, than before. This is consistent with the somewhat
greater role of SSI relative to other cash welfare (AFDC/TANF/GA) since welfare reform. One
conjecture is that single mothers who are most able to work, are doing so in the post-welfare
reform era, and that with support from the EITC, even those with comparatively low earnings
capacity (e.g., “earnings poor”) have sought work over welfare. Those remaining, who are not
engaged in work, may be less able to work, as indicated by a higher self-reported incidence of
illness or disability. In the pre-welfare reform era, roughly 10% of nonworking single mothers
reported “illness or disability” as the primary reason for not working during the year (Figure 18),
and roughly 70% reported “taking care of home or family” as the primary reason.61 In the postwelfare reform era, the share of nonworking single mothers who self-reported “illness or
disability” as the reason for not working is about three times higher than before welfare reform;
the share who reported “taking care of home or family” as the primary reason for not working has
61
The self reporting of “illness or disability” on the CPS/ASEC as the reason for not working may also be suspect if, as
a greater share of mothers have gone to work, the attribution of “taking care of home or family” as the reason for not
working has become less socially acceptable for not working, especially among mothers who receive welfare benefits.
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Welfare, Work, and Poverty Status of Female-Headed Families with Children: 1987-2013
fallen from roughly 70% to about 50% since welfare reform. From 2007 to 2009, the share of
nonworking single mothers who reported that they “could not find work” more than tripled, from
4.0% to 13.4%, and has remained well above its 2007 pre-recession low since (11.9% in 2013).
Nonetheless, reported “illness or disability” still ranks second, only to “taking care of home or
family,” as the primary attributed reason of single mothers for not having worked during the year.
Figure 18. Single Mothers Who Did Not Work During the Year,
by Self-Reported Reason for Not Working
1987 to 2013
Source: Prepared by the Congressional Research Service (CRS) based on analysis of U.S. Census Bureau 1988
to 2014 Current Population Survey (CPS) Annual Social and Economic Supplement (ASEC) data. See Table C15 for supporting data.
Cash Welfare Receipt among Ill or Disabled Nonworking Single Mothers
Whereas nonworking single mothers have a greater tendency to report illness or disability as the
primary reason for having not worked during the year, cash safety-net programs in the form of
AFDC/TANF and SSI appear to be assisting a smaller share of such mothers in the post-welfare
reform era, than before. Moreover, the number of single mothers reporting illness or disability in
2013 has more than doubled since 1987 (see Figure 19). In the pre-welfare reform era, roughly
70% to 80% of nonworking single mothers who reported illness or disability as the reason for not
working were being assisted by AFDC, SSI, or both—in 2013, 42% were. The SSI program taken
alone (not counting in combination with AFDC/TANF receipt) accounts for a considerably larger
share of nonworking ill or disabled single mothers in the post-welfare reform era (roughly
double) than before. In turn, the share reporting receipt of AFDC/TANF, either alone, or in
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Welfare, Work, and Poverty Status of Female-Headed Families with Children: 1987-2013
combination with SSI, has fallen by nearly two thirds since welfare reform, with about 60%
reporting AFDC in the pre-welfare reform era, and about 14% reporting TANF in 2013.
While a larger share of single mothers who are able to work appear to be engaged in work or
looking for work in the post-welfare reform era than before, among the smaller residual who are
not, a greater share report illness or disability as the primary reason for being out of the labor
market. In 2013, of the 654,000 single mothers who reported no work during the year due to
illness or disability, well over half (376,000) reported neither receiving SSI nor TANF/GA
assistance. The nature of these mothers’ reported illness or disability is not known, nor is it
known whether they have sought and been denied government assistance. Whether and how these
mothers might be falling through cracks in the income safety-net is a question of policy interest,
and possible concern.
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Welfare, Work, and Poverty Status of Female-Headed Families with Children: 1987-2013
Figure 19. Nonworking Single Mothers with Self-Reported “Illness or Disability”
as the Primary Reason for Not Working, by Cash Welfare Recipiency Status
1987 to 2013
Source: Prepared by the Congressional Research Service (CRS) based on analysis of U.S. Census Bureau 1988
to 2014 Current Population Survey (CPS) Annual Social and Economic Supplement (ASEC) data. See Table C15 for supporting data.
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Welfare, Work, and Poverty Status of Female-Headed Families with Children: 1987-2013
The Work-Based Income Safety Net in Times of Recession
and Recovery
By the official measure, poverty among single mothers reached a historical low in 2000 (31.8%),
but has since increased in step with two recessions, reaching a recent peak in 2012 (39.8%)—the
same level as that of 1996, when welfare reform was signed into law, but lower than previous
years. Single mothers’ poverty rate began to show signs of improvement, falling to 38.0% in
2013, but it is still well above its historical low. An improved economy, contributing to a falling
unemployment rate among mothers maintaining families (Figure 10, shown earlier) suggests that
their official poverty rate will likely continue to fall in 2014, but it will remain above its prerecession level, and well above its 2000 historical low.
The official U.S. poverty measure provides little insight as to how the transformed work-based
income safety net has performed since the expansions to EITC in the early 1990s, and 1996
welfare reform, in reducing poverty. As shown in the body of this report, a very different story
from the one offered by the official poverty measure emerges by using an expanded income
measure that includes the EITC, and more recently, the ACTC, refundable tax credits, and Food
Stamp/SNAP assistance.
Single Mothers’ Attachment to the Work-Based Safety Net
With an increased share of single mothers engaged in the labor market since welfare reform, the
availability of work, and especially full-time work for those who want it, is of special concern,
given the past recession and pace of recovery. Full-time, fu
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