Trends in Welfare, Work, and the Economic Well-Being of Female-Headed Families with Children: 1987-2006

Order Code RL30797

Trends in Welfare, Work, and the Economic

Well-Being of Female-Headed Families

with Children: 1987-2006

Updated January 29, 2008

Thomas Gabe

Specialist in Social Policy

Domestic Social Policy Division

Trends in Welfare, Work, and the Economic Well-Being

of Female-Headed Families with Children: 1987-2006

Summary

More than a decade has passed since repeal of the nation’s major cash welfare

program assisting low-income families with children and its replacement with a

program of Temporary Assistance for Needy Families (TANF). TANF ended the 61year-old federal entitlement program to poor families with children, Aid to Families

with Dependent Children (AFDC). A major purpose of TANF is to end dependence

of needy families on government assistance by limiting the time they may receive

federal assistance (five-year maximum, or fewer years under state option), and by

promoting job preparation, work, and marriage. TANF gives states increased

flexibility to design programs to assist needy families with children over what existed

under AFDC. The majority of families assisted by TANF, and its predecessor AFDC

program, are poor and low-income single-parent families, headed mostly by women.

This report examines trends in welfare, work and the economic well-being of

female-headed families with children, the principal group affected by the replacement

of AFDC with TANF. The report presents analysis of 20 years of U.S. Census

Bureau Current Population Survey (CPS) data, the principal source of information

for U.S. family income and poverty statistics. The analysis spans the run-up in

welfare caseloads that began in 1989 to reach an all-time high in 1994, and the

historic caseload declines that have since followed. Over the period studied, a variety

of economic, demographic, and public policy and program changes, besides TANF,

are likely to have affected welfare, work and the economic well-being of singlemother families. This report does not attempt to untangle these possible effects.

The analysis shows that there has been a dramatic transformation with regard

to welfare, work and poverty status of single mothers over the past 20 years. Many

of these changes began before the passage and implementation of TANF, but have

continued, perhaps to an even greater extent, since. The analysis shows that single

mothers are more likely to be working in recent than in past years, and that they are

less likely to receive cash welfare or to be poor. However, reductions in poverty have

not been as large as the large declines in welfare and the increased rates of work that

have occurred. The analysis indicates that welfare receipt rates among poor families

headed by single mothers have dropped considerably.

Among single mothers whose incomes place them in the bottom fifth of all such

mothers, income from earnings supplemented by the Earned Income Tax Credit

(EITC) has grown markedly since 1993, but has been insufficient to offset concurrent

losses in cash welfare and food stamp benefits. While single mothers are less

dependent on welfare in most recent than in past years, increased work has not

resulted in marked gains in net income for these lowest-income families. The report

suggests that full-time full-year work may be necessary, but not sufficient, to raise

single mothers’ family incomes above poverty. U.S. income support policy will

continue to be challenged to promote economic self-support through work and to

reduce poverty and welfare dependency among families headed by single mothers.

This report will be updated annually, when new Census Bureau data are released.

Contents

Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

Single Mothers’ Employment Rates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

Welfare Receipt Among Single Mothers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8

Poor Single Mothers’ Work and Welfare Status . . . . . . . . . . . . . . . . . . . . . . . . . 12

Effects of Earnings, Transfers, and Taxes on Single Mothers’ Poverty Status . . 14

Effect of Earnings and Other Nonwelfare Cash Income on Poverty . . . . . . 16

Effect of Cash Welfare on Poverty . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16

Effect on Poverty of Counting Selected Income Sources Not Included

in the “Official” Poverty Measure . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16

Effect of Food Stamps on Poverty . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16

Effect of Taxes and Tax Credits on Poverty . . . . . . . . . . . . . . . . . . . . 17

Effect of Unrelated Household Member’s Income on Poverty . . . . . . 17

Degree of Poverty Among Poor Single Mothers . . . . . . . . . . . . . . . . . . . . . . . . . 18

Sources and Level of Income Among Lower-Income Single Mothers . . . . . . . . 20

Conclusions and Policy Implications . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25

Appendix A: Cash Welfare Under-Reporting on the CPS . . . . . . . . . . . . . . . . . 29

Appendix B: Family Income to Poverty Ratios: Cutoffs for Income Quintiles . 31

Appendix C: Support Tables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38

Data Note . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38

List of Figures

Figure 1. Single Mothers: Poverty and Cash Welfare Receipt, 1987 to 2006 . . . 5

Figure 2. Welfare, Work and Poverty Status Among Single Mothers,

1987 to 2006 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6

Figure 3. Employment Rates of Single and Married Mothers,

by Age of Youngest Child, March 1988 to March 2007 . . . . . . . . . . . . . . . . 7

Figure 4. Single Mothers: Cash Welfare Recipiency Rates,

by Pre-Transfer Income* Poverty Status, 1987 to 2006 . . . . . . . . . . . . . . . . 9

Figure 5. Cash Welfare Recipiency Rates Among Single-Mother Families,

by Pre-Transfer Income* Poverty Status, 1987 to 2006 . . . . . . . . . . . . . . . 10

Figure 6. Food Stamp Recipiency Rates Among Single Mothers,

by Household Income Relative to Household Low-Income Threshold,

1987 to 2006 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11

Figure 7. Poor Single Mothers: Work and Welfare Status During the Year,

1987 to 2006 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13

Figure 8. Effects of Earnings, Transfers and Taxes on Family Poverty

and Household Low-Income Status of Single Mothers, 1987 to 2006 . . . . 15

Figure 9. Poverty Gap* Percentiles Based on Cash Income Among

Poor Single-Mother Families, 1987 to 2006 . . . . . . . . . . . . . . . . . . . . . . . . 19

Figure 10. Poverty Gap* Percentiles Based on Net After-Tax Cash Income

(Including the EITC) and the Value of Food Stamps, Among Poor

Single-Mother Families, 1987 to 2006 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20

Figure 11. Bottom Income Quintile* of Single-Mother Families:

Average Annual Income by Source, 1987 to 2006 (in 2006 dollars) . . . . . . 23

Figure 12. Second Income Quintile* of Single-Mother Families:

Average Annual Inocme by Source, 1987 to 2006 (in 2006 dollars) . . . . . . 24

Figure 13. Working Single Mothers’ Job Attachment, by Welfare and

Poverty Status: 2006 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26

Figure 14. Hourly Wage Rates* of Working Single Mothers

in March 2007, by Welfare and Poverty Status in 2006

(Median and Inter-Quartile Range) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28

Figure 15. AFDC/TANF Cases: CPS Estimates Versus Administrative

Caseload Counts (Annual Monthly Average), 1987 to 2006 . . . . . . . . . . . . 29

Figure B-1. Income to Poverty Percentiles of Mother-Only Families

Based on Ranking of Families by Family Cash Income Relative

to Family Poverty Income Thresholds, 1987 to 2006 . . . . . . . . . . . . . . . . . 32

Figure B-2. Income to Poverty Percentiles of Mother-Only Families,

Based on Ranking of Families by Combined After-Tax and Food Stamp

Income Relative to Family Poverty Income Thresholds, 1987 to 2006 . . . . 33

Figure B-3. Income to Poverty Percentiles of Mother-Only Families

Based on Ranking of Families by Household Combined After-Tax

and Food Stamp Income Relative to Household Poverty Income

Thresholds, 1987 to 2006 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34

List of Tables

Figure A-1. Support Table 1. AFDC/TANF Cases: CPS versus Administrative

Caseload Counts, Annual Monthly Average, 1987 to 2006 . . . . . . . . . . . . 30

Figure B-1 Support Table. Income to Poverty Percentiles of Mother-Only

Families Based on Ranking Families by Family Cash Income Relative

to Family Poverty Income Thresholds, 1987 to 2006 . . . . . . . . . . . . . . . . . 35

Figure B-2 Support Table. Income to Poverty Percentiles of Mother-Only

Families Based on Ranking of Families by Combined After-Tax

and Food Stamp Income Relative to Family Poverty Income Thresholds,

1987 to 2006 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36

Figure B-3 Support Table. Income to Poverty Percentiles of Mother-Only

Families Based on Families Ranked by Household Combined After-Tax

Food Stamp Income Relative to Household Poverty Income Thresholds,

1987 to 2006 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37

Figure 1 Support Table. Single Mothers: Poverty and Cash Welfare Receipt,

1987 to 2006 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39

Figure 2 Support Table. Welfare, Work and Poverty Status Among Single

Mothers, 1987 to 2006 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40

Figure 3 Support Table. Employment Rates of Single Mothers and Married

Mothers by Age of Youngest Child, March 1988 to March 2007 . . . . . . . . 41

Figures 4 and 5 Support Table. Single-Mother Family Cash Welfare Recipiency

Rates, by Pre-Transfer Income Poverty Status,* 1987 to 2006 . . . . . . . . . . 42

Figure 6 Support Table. Food Stamp Recipiency Rates Among

Single-Mother Families, by Household Income Relative to Household

Poverty Threshold, 1987 to 2006 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43

Figure 7 Support Table. Poor Single Mothers: Work and Welfare Status

During the Year, 1987 to 2006 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44

Figure 8 Support Table. Effects of Earnings, Transfers, and Taxes on Family

Poverty and Household Low-Income Status on Single Mothers,

1987 to 2006 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45

Figure 9 Support Table. Poverty Gap Percentiles* Based on Cash Income

Among Poor Single-Mother Families, 1987 to 2006 . . . . . . . . . . . . . . . . . . 46

Figure 10 Support Table. Poverty Gap Percentiles* Based on Cash Income,

Food Stamps, and Net Taxes Including the EITC Among Poor

Single-Mother Families, 1987 to 2006 . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47

Figure 11 Support Table. Bottom Income Quintile* of Single Mother Families:

Average Annual Income by Source, 1987 to 2006 . . . . . . . . . . . . . . . . . . . 48

Figure 12 Support Table. Second Income Quintile* of Single Mother Families:

Average Annual Income by Source, 1987 to 2006 . . . . . . . . . . . . . . . . . . . 49

Trends in Welfare, Work, and the

Economic Well-Being of Female-Headed

Families with Children: 1987-2006

Introduction

More than a decade has passed since repeal of the nation’s major cash welfare

program assisting low-income families with children and its replacement with a

program of Temporary Assistance for Needy Families (TANF). TANF, signed into

law 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 fixeddollar block grant program and imposing a maximum five-year lifetime limit receipt

of federally-funded assistance (states may impose shorter limits than the maximum).

TANF gives states increased flexibility to design programs to assist needy families

with children over what existed under its predecessor program. A major purpose 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. The majority of families assisted by TANF, and its predecessor AFDC

program, are poor and low-income single-parent families, headed mostly by women.

This report examines trends in welfare, work and economic well-being of

female-headed families with children, the principal group affected by the replacement

of AFDC with TANF. The report presents data from Congressional Research Service

(CRS) analysis of U.S. Bureau of the Census March Current Population Survey

(CPS), the principal source of information for U.S. family income and poverty

statistics. The analysis is based on CPS data collected from March 1988 to March

2007. The earliest year’s data precedes the passage of the Family Support Act of

1988 (P.L. 100-485), the last major nationwide reform to the AFDC program prior

to its repeal under TANF. The data series begins before the most recent run-up in

cash welfare caseloads that occurred under AFDC in the late-1980s and early 1990s.

It captures the caseload increase to its peak, in 1994, and the historic caseload decline

that followed.

Over the period examined in this report, a variety of economic and demographic

factors, and policy interventions are generally thought to have affected cash welfare

caseloads. Increased numbers of single-mother families, especially never-married

mothers who are prone to poverty and receipt of welfare, as well as the ill effects of

an economic recession (July 1990 to March 1991) are generally thought to have

CRS-2

contributed to the increase in the AFDC caseload from mid-1989 to March 1994.1

The 10-year long economic expansion (from March 1991 to March 2001), the longest

in U.S. history, presented a most favorable economic climate to provide jobs to

mothers who otherwise might rely on welfare, and is considered to have contributed

to declines in welfare caseloads. The economic recession that followed (March to

November 2001) is likely to have contributed to the subsequent leveling off of TANF

caseloads2 and increases in Food Stamp program caseloads.

A variety of welfare policy interventions are likely to have affected welfare

caseloads by conditioning benefits on new behavioral requirements. For example,

the 1988 Family Support Act extended work requirements (which could include work

preparation activities, such as education and training) from mothers with a child as

young as 6 to mothers with a child as young as 3. (Under the law, states had the

option of extending work requirements to mothers with a child as young as 1.) In the

years immediately preceding passage of the 1996 welfare law, states experimented

with changes to welfare policy under waiver authority granted to the Secretary of the

Department of Health and Human Services (DHHS).3 Among the features of state

programs tested under waiver authority granted by the Secretary 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. After the passage of the

1996 welfare reform law, many states adopted these and many other approaches first

tried under welfare waivers.

In addition, a number of other policy interventions are generally thought to have

promoted work compared to welfare over the period examined in this report.

Expanded eligibility and funding for child care has helped make work possible for

mothers who otherwise might have difficulty finding child care. For example, the

1988 Family Support Act expanded eligibility for child care assistance in the form

of transitional child care assistance for families working their way off AFDC. In

1990, federally funded child care assistance was extended to low-income families

deemed to be at risk of receiving welfare under the Child Care and Development

Block Grant (CCDBG).4 Expansions to the Earned Income Tax Credit (EITC) in

1990 (phased-in 1991 and 1992) and in 1993 (phased-in 1994 through 1996)

expanded the credit’s “work bonus” to families with children, amounting to as much

1

See for example, CRS Report 93-7, Demographic Trends Affecting Aid to Families with

Dependent Children (AFDC) Caseload Growth, by Thomas Gabe (archived report, available

upon request); and Peskin, Janice. Forecasting AFDC Caseloads, with an Emphasis on

Economic Factors. Congressional Budget Office Staff Memorandum, July 1993.

2

See CRS Report RL32760, The Temporary Assistance for Needy Families (TANF) Block

Grant: Responses to Frequently Asked Questions, by Gene Falk.

3

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 which the Secretary judges to promote specific objectives of the act.

4

See CRS Report RL30785, The Child Care and Development Block Grant: Background

and Funding, by Melinda Gish.

CRS-3

as 40 cents on each dollar earned for a low-income family with two children.5 Over

the period examined in this report, the minimum wage was increased four times.6

Additionally, most states allowed inflation to substantially erode the real value of

welfare benefits over this period, diminishing the value of welfare relative to work.7

Furthermore, 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.8

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.9 In contrast to these efforts, this report is intended to simply

describe changes in single mothers’ welfare, work, income and poverty status that

have occurred over the past 20 years. The analysis which follows relies on data from

the U.S. Bureau of the Census Annual Social and Economic Supplement (ASEC) to

5

For a description of the EITC, see CRS Report RL31768, The Earned Income Tax Credit:

An Overview, by Christine Scott. For an analysis of the possible effects of the EITC on

welfare receipt and mothers’ work, see Meyer, Bruce D., and Dan T. Rosenbaum. Welfare,

the Earned Income Tax Credit, and the Labor Supply of Single Mothers. NBER Working

Paper No. 7363, September 1999. (Hereafter cited as Meyer and Rosenbaum, Welfare, the

Earned Income Tax Credit.)

6

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, and $5.15 per hour, effective September 1997. For an analysis of possible effects of

minimum wage increases on welfare participation, see Turner, Mark. The Effects of

Minimum Wages on Welfare Recipiency. Paper presented at the National Association for

Welfare Research and Statistics, August 1998.

7

Maximum TANF benefits available for a family of three in the median state in January

2005 were 32% below the maximum level available to a family under AFDC in January

1987, after adjusting for the effects of price inflation. In only one state (Alabama) were

TANF benefits higher in January 2005 than in January 1987.

8

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.)

9

See, for example, Council of Economic Advisors, Technical Report: Explaining the

Decline in Welfare Receipt, 1993-1996, A Report by the Council of Economic Advisers,

Washington, D.C., April 1997, and Technical Report: The Effects of Welfare Policy and the

Economic Expansion on Welfare Caseloads: An Update, A Report by the Council of

Economic Advisers, Washington, D.C. August 1999; Ziliak, James P., Figlio, David N.,

Davis, Elizabeth E., and Connolly, Laura S. “Accounting for the Decline in AFDC

Caseloads, Welfare Reform or the Economy? The Journal of Human Resources, vol.

XXXV, no. 3, pp. 570-586. Moffitt, Robert A. “The Effect of Pre-PRWORA Waivers on

AFDC Caseloads and Female Earnings, Income, and Labor Force Behavior, in Economic

Conditions and Welfare Reform.” Danziger, Sheldon (ed.), Kalamazoo, Mich. W.E.

Upjohn Institute for Employment Research, 1999; O’Neill, June E. and Hill, Anne M.

“Gaining Ground? Measuring the Impact of Welfare Reform on Welfare and Work.” Civic

Report No. 17., Manhattan Institute, New York, New York, 2001.

CRS-4

the CPS.10 Over the period examined, the CPS/ASEC data provides a comparatively

consistent approach for assessing changes in the economic status of single-mothers

and their families. The CPS/ASEC asks questions about family composition in

March, family members’ labor force and employment status in the month, and

retrospective accounting of income and labor force participation during the prior

year. The data presented in this report capture family composition from March 1988

to March 2007, and family income and poverty status from 1987 to 2006, providing

a representative cross-section of families headed by single mothers in each year.11

Overview

CPS data show an increase in cash welfare receipt (AFDC, TANF, or other

assistance) among single mothers during the late 1980s and early 1990s and a

decrease in the mid-to-late 1990s. The CPS data generally correspond to the caseload

rise and fall documented by administrative program data, but underestimate the

caseload statistics to some extent.12 Figure 1 shows that the total number of single

mothers increased from 8.4 million in 1989, to about 9.9 million in 1993, an increase

of 1.5 million, or 17%. From 1993 through 2000, the number of single mothers

remained fairly stable, ranging between 9.7 and 10.1 million. Since 2000, the

number of single mothers has increased by over one million, from 10 million in 2000,

to 10.9 million in 2006.

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

just under one million (991,000) in 2006 — a 71% decline from 1993 (the bottomshaded portion in Figure 1).13 Over the same period, the number of poor single

mothers who reported receiving no cash welfare increased from 1.722 million in

1993 to 3.120 million in 2006 — an 81% increase over the period (the middle-shaded

area in Figure 1).

10

The CPS/ASEC was formerly known as the March Supplement to the Current Population

Survey, as data for the social and economic supplement were collected in March of each

year. Beginning in 2001, the Census Bureau expanded the CPS sample for collecting social

and economic supplementary data to include some households interviewed in February and

April. Most of the households in the ASEC are still interviewed in March, and estimates for

the full ASEC continue to be controlled to independent population estimates for March.

11

Unlike longitudinal surveys, the CPS does not follow the same families from year to year.

Longitudinal surveys allow for the study of how individual families’ circumstances change

over time.

12

13

See Appendix A, which compares CPS estimates to AFDC/TANF caseload counts.

Administrative caseload statistics show the caseload as peaking in March 1994, with

nearly 5.1 million cases. By March 2006, the caseload had dropped to 1.8 million cases; a

65% decline from its March 1994 peak.

CRS-5

Figure 2 provides an overview of single mothers’ welfare, work and poverty

status from 1987 to 2006. The figure shows that since 1993, the share of single

mothers who worked at some time during the year has increased markedly and that

the share who received cash welfare (AFDC or post-1996 TANF) has declined

significantly, as has the share who are poor under the official poverty definition.14

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, but are receiving no cash welfare

assistance.

Figure 1. Single Mothers:

Poverty and Cash Welfare Receipt, 1987 to 2006

Number (in millions)

11

10

9

8

Neither poor nor receiving cash welfare

7

6

5

4

3

Poor, but not receiving cash welfare

2

Receiving cash welfare,

including those who are not poor

1

0

r

87 988 989 990 991 992 993 994 995 996 997 998 999 00

01 002 003 004 005 006

19

1

1

1

1

1

1

1

20

1

2

1

2

1

2

1

2

1

2

20

Year

Source: Prepared by the Congressional Research Service (CRS). Based on analysis of U.S. Census

Bureau 1988 to 2007 Current Population Survey (CPS) Annual Social and Economic Supplement

(ASEC) data.

r=Revised estimates based on expanded CPS sample and 2000 decennial census-derived weights.

14

The “official” U.S. Census Bureau definition counts cash, pre-tax, income against poverty

thresholds that vary by family size and composition. In 2006, for example, a single mother

with one child would be considered poor if her income were below $13,896, and if she had

two children, below $16,242.

CRS-6

Figure 2 shows that during the 1987 to 1993 period, the share of single mothers

who worked at any time during the year held steady, at just below 70% in most

years; since 1993, the share working increased each year until reaching 83% in 2000.

The share of single mothers working dropped to just over 77% in 2006. During the

1987 to 1993 period, roughly one out of three single mothers received cash welfare.

In 1993, the most recent peak year of welfare receipt on the CPS, about 35% of single

mothers received cash welfare; since then the cash welfare receipt rate has declined

substantially. In 2006, only about 9% of single mothers received cash welfare — just

about one-quarter of the1993 rate. The figure shows that the poverty rate among

single mothers fell from about 45% in 1993 to about 32% in 2000. Since 2000, the

poverty rate of single mothers has increased to35%.

Figure 2. Welfare, Work and Poverty Status

Among Single Mothers, 1987 to 2006

100%

Percent

Percent

100%

90%

90%

Single mothers who worked

at any time during the year

80%

80%

70%

70%

60%

60%

50%

50%

Poverty rate

40%

40%

30%

*

*

*

*

*

*

*

*

Received cash welfare but

did not work during year

*

20%

*

30%

Received cash welfare

during the year

*

10%

Worked and received cash

welfare during year

*

20%

*

*

*

*

*

*

*

* 10%

0%

0%

19

r

87 988 989 990 991 992 993 994 995 996 997 998 999 00 001 002 003 004 005 006

2

2

2

2

2

2

1 20

1

1

1

1

1

1

1

1

1

1

1

Year

Source: Prepared by the Congressional Research Service (CRS). Based on analysis of U.S. Census

Bureau 1988 to 2007 Current Population Survey (CPS) Annual Social and Economic Supplement

(ASEC) data.

r=Revised estimates based on expanded CPS sample and 2000 decennial census-derived weights.

CRS-7

Single Mothers’ Employment Rates

While welfare receipt has declined, dramatic gains in single mothers’

employment have occurred since 1993. Figure 3 shows employment rates of single

and married mothers by age of youngest child in March, from 1988 to 2007 The

chart shows that gaps that had existed between single and married mothers’

employment have virtually been eliminated in recent years, with single mothers now

being more likely than their married counterparts to be working.

Figure 3. Employment Rates of Single and Married Mothers,

by Age of Youngest Child, March 1988 to March 2007

Percent employed

Percent employed

100%

100%

95%

90%

90%

85%

80%

80%

Age 6 to 17

75%

70%

70%

Age 3 to 5

65%

60%

60%

Under age 3

55%

50%

50%

45%

40%

40%

35%

30%

30%

Married mothers

25%

Single mothers

20%

20%

15%

10%

10%

5%

0%

0%

r

88 989 990 991 992 993 994 995 996 997 998 999 000

02 003 004 005 006 007 008 009

01

19

1

1

1

1

1

1

1

1

1

1

1

2

20

2

2

2

2

2

2

2

20

Year

Source: Prepared by the Congressional Research Service (CRS). Based on analysis of U.S. Census

Bureau 1988 to 2007 Current Population Survey (CPS) Annual Social and Economic Supplement

(ASEC) data.

r=Revised estimates based on expanded CPS sample and 2000 decennial census-derived weights.

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 recent 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

and fell slightly in March 2007, to 56.5%. Single mothers with a youngest child aged

3-5 also experienced marked employment gains over the mid-to-late 1990s. Their

employment rate grew from a recent low of 54.1% in March 1992, to 72.7% by

CRS-8

March 2000, an 18.6 percentage point increase over the period. By March 2007, the

employment rate of single mothers with a youngest child aged 3-5 was 68.6%, still

about 4 percentage points less than its March 2000 peak, but 5.6 percentage points

above that of their married counterparts (63.0%). 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 1988-2006 period.

A healthy economy during much of the 1990s, combined with a transformed

welfare system, improvements to the EITC, and increases in the minimum wage, are

among factors thought to have encouraged work among single mothers. TANF, and

the AFDC waivers that preceded it, transformed cash assistance from a needs-based

entitlement to a program of temporary assistance, encouraging work and personal

responsibility. Imposition of work requirements, time limits, and sanctions, and in

most states, more generous earnings disregards, all serve to encourage work, either

in lieu of welfare or, for a temporary period, in conjunction with welfare. The EITC,

which is conditioned on earnings, is thought to encourage work among most groups,

especially single parents who were not working, or who were marginally attached to

the labor market. Increases in the EITC, passed by Congress in 1993 and phased in

between 1994 and 1996, have increased the financial incentive for single mothers to

work.15 Other factors, such as increased funding for child care subsidies, may also

have contributed to making work possible for more single mothers.

Given their greater attachment to the work force in recent years, one might

expect single mothers to be more severely impacted by downturns in the economy

than in years past. Evidence from the most recent recession (March to November

2001) shows a declining employment rate and increased incidence in poverty among

single mothers since 2000. The employment rate among single mothers has yet to

rebound seven years after having reached a historic high, and their poverty rate has

yet to show significant movement back toward it historic low, reached seven years

ago. In contrast, in the previous recession (July 1990 to March 1991), single mothers

also experienced declining employment and an increased incidence in poverty

(although their employment rate was lower and their poverty rate higher than today).

However, in the previous recession, employment rebounded sooner (after three

years), and the poverty rate increase abated within two years, and began to fall once

again after three.

Welfare Receipt Among Single Mothers

Figure 4 shows that cash welfare recipiency rates among single mothers overall,

and among poor single mothers based on their pre-transfer income (i.e., cash income

excluding cash welfare), remained fairly steady during the 1987-1993 period, but

have fallen considerably since. Among single mothers overall, about one-third

received cash welfare during the late-1980s and early 1990s, with a low of about 30%

in 1989 and a peak of about 35% in 1993. Cash welfare recipiency rates among

15

Meyer and Rosenbaum, in Welfare, the Earned Income Tax Credit, op. cit., attribute 60%

of the increase in single mothers weekly and annual employment between 1984 and 1996

to the EITC.

CRS-9

single mothers began to fall after 1993, falling to 10% in 2002 — a drop in the rate

from nine years earlier of more than two-thirds. With the exception of 2003, cash

welfare recipiency rates have remained around 10% since 2002. The apparent rise

in the 2003 recipiency rate may be an aberration in CPS measurement, as

administrative caseload data showed no such increase. See Appendix A for further

discussion of CPS and administrative data caseload trends. In 2006, only about 9%

of single mothers were receiving cash welfare.

Recent declines in cash welfare recipiency rates have not simply been due to

diminished need for assistance, as recipiency rates have fallen even among mothers

who would appear to be in economic need, based on their pre-transfer income

relative to poverty. For example, Figure 4 shows that among single mothers who

were poor based on their pre-transfer cash income (i.e., income before counting cash

welfare), the share who received cash welfare generally held relatively steady,

around 63%, in most years over the 1987-93 period. Since 1993, the cash welfare

recipiency rate among single mothers with pre-transfer income below poverty has

fallen dramatically. In 2006, only about one in five (20.2%) single mothers with pretransfer income below poverty received cash assistance.

Figure 4. Single Mothers: Cash Welfare Recipiency Rates,

by Pre-Transfer Income* Poverty Status, 1987 to 2006

100%

Percent

Percent

100%

90%

90%

80%

80%

70%

60%

Cash welfare recipiency rate among

single mothers with pre-transfer

income* below poverty

70%

60%

50%

50%

40%

40%

30%

20%

30%

Cash welfare recipiency rate

all single mothers

20%

10%

10%

0%

0%

r

87 988 989 990 991 992 993 994 995 996 997 998 999 00 001 002 003 004 005 006

2

2

2

2

2

2

1

1

1

1

1

1

1

1

1

1

1

1

19

20

Year

Source: Prepared by the Congressional Research Service (CRS). Based on analysis of U.S. Census

Bureau 1988 to 2007 Current Population Survey (CPS) Annual Social and Economic Supplement

(ASEC) data.

* Pre-transfer income is cash income other than cash welfare payments.

r=Revised estimates based on expanded CPS sample and 2000 decennial census-derived weights.

CRS-10

Figure 5 shows cash welfare recipiency rates in greater detail by families’ level

of financial need, as measured by families’ levels of pre-transfer income relative to

poverty. The figure shows that cash welfare recipiency rates have fallen considerably

in recent years even among single mothers who might be considered especially needy

by having very low levels of pre-transfer income relative to poverty. For example,

the top line of Figure 5 shows that nearly 90% of single mothers with no pre-transfer

income reported receiving cash assistance from 1987 to 1990. However, after 1990

the reported rate of cash welfare recipiency among this group began drifting

downwards, falling to 77% by 1996, and afterwards falling abruptly to just 35% by

2001. In 2002 and 2003, there was a marked increase in cash welfare receipt for this

group (up to 44.2% in 2003), but by 2006, cash welfare receipt for this group

dropped to 31%. Similarly, for single mothers with very low pre-transfer income

relative to poverty (below 25% of poverty), and for families with pre-transfer

incomes between 25 and 50% of poverty, cash welfare recipiency rates also show

dramatic declines after 1996: for the former group from 72% in 1996 to 29% in

2006, and for the latter group from 60% in 1995 to 23% in 2005 and 2006.

Figure 5. Cash Welfare Recipiency Rates

Among Single-Mother Families,

by Pre-Transfer Income* Poverty Status, 1987 to 2006

Percent receiving cash welfare

100%

90%

$0 in pre-transfer income

80%

70%

Pre-transfer income > $0

but below 25% of poverty

60%

50%

Pre-transfer income

between 25% and 50%

of poverty

40%

30%

Pre-transfer income between

50% and 100% of poverty

20%

10%

0%

r

87 988 989 990 991 992 993 994 995 996 997 998 999 00 001 002 003 004 005 006

2

2

2

2

2

1

1

2

1

1

1

1

1

1

1

1

1

1

19

20

Year

Source: Prepared by the Congressional Research Service (CRS). Based on analysis of U.S. Census

Bureau 1988 to 2007 Current Population Survey (CPS) Annual Social and Economic Supplement

(ASEC) data.

* Pre-transfer income is cash income other than cash welfare payments.

r=Revised estimates based on expanded CPS sample and 2000 decennial census-derived weights.

CRS-11

Likewise, food stamp recipiency rates among low-income households have also

fallen in recent years, although the declines have not been as dramatic as the declines

in cash welfare recipiency rates shown above. Figure 6 shows that in 1994, 71% of

single-mother families with household income below 130% of poverty (the Food

Stamp Program’s gross income qualifying limit) reported receiving food stamp

benefits; by 2000 the share had fallen to about 50%, but has increased since, reaching

57% in 2004, and then falling to 56.1% in 2005, and to 54.2% on 2006. Among

those with household incomes below 50% of the low-income threshold in 1994, 80%

reported food stamp receipt; in 2001 just 61% reported food stamp receipt; by 2004,

their food stamp recipiency rate had increased to 68.2%, and stood at 66.9% in 2006.

Figure 6. Food Stamp Recipiency Rates

Among Single Mothers, by Household Income

Relative to Household Low-Income Threshold, 1987 to 2006

100%

Food stamp recipiency rate

90%

80%

Household income as a % of

low-income threshold:

70%

Less than 50%

60%

Less than 130%

50%

50% to less than 130%

40%

30%

20%

10%

0%

19

87 988 989 990 991 992 993 994 995 996 997 998 999 00r 001 002 003 004 005 006

1 1 1 1 1 1 1 1 1 1 1 1 20 2 2 2 2 2 2

Year

Source: Prepared by the Congressional Research Service (CRS). Based on analysis of U.S. Census

Bureau 1988 to 2007 Current Population Survey (CPS) Annual Social and Economic Supplement

(ASEC) data.

r=Revised estimates based on expanded CPS sample and 2000 decennial census-derived weights.

CRS-12

CPS statistics do not capture the full impact of the 2001 recession (March to

November 2001) on food stamp caseloads. Food Stamp program statistics indicate

that in FY2006, food stamp caseloads were up 55% from FY2000.16

To at least some extent the declining cash welfare and food stamp recipiency

rates shown in Figures 4 through 6 are likely due to increased under-reporting of

welfare receipt on the CPS. Worsened reporting of cash welfare on the CPS makes

it difficult to gauge how much of the drop in welfare receipt among female-headed

families with children represents eligible families who do not receive assistance

rather than families who do not report actual welfare aid on the CPS. See Appendix

A for a brief analysis of the possible extent of under-reporting of cash welfare on the

CPS.

Poor Single Mothers’ Work and Welfare Status

Although poverty rates among single mothers have declined in recent years,

there is a greater likelihood today than in years past that a poor single mother will be

working, rather than receiving welfare. As shown above, poor single mothers are less

likely to be receiving cash welfare in recent than in earlier years (Figures 4 and 5).

Similarly, like all single mothers, poor single mothers are also now more likely to be

working than not. 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 and rates of welfare receipt declining after 1993 (see Figure 7, 2 darkest

lines). 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.

Figure 7 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 1987-93 period, to about

19% in 2006. The rate of decline in welfare receipt among poor single mothers has

been greatest since 1996, a period coinciding with the passage and implementation

of national welfare reform legislation. 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 dropped since, to about 54% in 2006.

The share of poor single mothers who relied on cash welfare without working

dropped from a peak of 43% in 1991, to about 11% in 2006 (a 75% drop from the

1991 rate). The share of poor single mothers who worked without relying on cash

welfare has increased from a recent low of nearly 25% in 1993, to about 47% in

2006. The share of poor single mothers who combined work and welfare over the

year, which had remained relatively constant over most of the period at around 20%,

fell to about 8% in 2006.

16

In FY2000, 17.194 million people were receiving food stamps, based on monthly average

participation rates. In FY2006, monthly average food stamp participation had reached

26.672 million participants. These statistics reflect all households who received food

stamps, not just female-headed families. See [http://www.fns.usda.gov/pd/fssummar.htm].

CRS-13

The share of poor single mothers who reported that they neither worked nor

received cash welfare during the year (the dotted line in Figure 7) has increased from

a low of about 12% in 1991 to about 35% in 2006. This surprising combination may

reflect a mix of circumstances, including income or support from other sources such

as family members, support from unrelated household members (which is not

included in the official poverty measure), 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.17 Finally, welfare

diversion and sanction policies may have contributed to the increased number of poor

mothers neither working nor receiving welfare.

Figure 7. Poor Single Mothers:

Work and Welfare Status During the Year, 1987 to 2006

100%

Percent

90%

80%

70%

60%

Worked during year

50%

Worked during year, did not receive cash welfare

40%

) ) )

30%

)Neither worked, nor received

) ) cash welfare during the year

)

20%

10%

)

) ) )

) ) )

) ) ) )

) )

Received cash welfare during year

Received cash welfare during year, did not work

Worked and received cash welfare during year

0%

87 88 89 90 91 92 93 94 95 96 97 98 99 0r 01 02 03 04 05 06

19 19 19 19 19 19 19 19 19 19 19 19 19 200 20 20 20 20 20 20

Year

Source: Prepared by the Congressional Research Service (CRS). Based on analysis of U.S. Census

Bureau 1988 to 2007 Current Population Survey (CPS) Annual Social and Economic Supplement

(ASEC) data.

r=Revised estimates based on expanded CPS sample and 2000 decennial census-derived weights.

17

See Appendix A on CPS under-reporting.

CRS-14

Effects of Earnings, Transfers, and Taxes

on Single Mothers’ Poverty Status

As shown earlier, in Figure 2, 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 cash income

(excluding capital gains and lump sum or one-time payments) against a family’s

poverty threshold (which varies by family size and composition) to determine

whether a family is counted as poor. The definition does not include the value of inkind benefits, such as food stamps, school lunches, or public housing subsidies, nor

does it include the effects of taxes or tax credits such as the EITC. Inclusion of inkind benefits and the EITC provides a more comprehensive income definition than

the official definition. 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 often difficult.

Figure 8 shows the effects of income from these other sources on poverty

among all single mothers. 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:

!

!

!

Line 1: The top line shows the percent of single mothers who

would be counted as poor if only family earnings were counted

against the poverty line.

Line 2: The second line down includes other sources of cash

income, in addition to earnings, that were already counted above

(e.g., social security payments, unemployment compensation,

workers compensation, interest and dividends, inter-family

transfers). However, this line does not include cash welfare.

Line 3: The third line down adds cash welfare to the other sources

already mentioned, and with those sources, represents the income

definition used in the official poverty measure.

Lines 4 through 6 include food stamps, taxes (including the effects of the EITC

and the partially refundable Child Tax Credit) and income of other unrelated

household members that are not included under the “official” U.S. Bureau of the

Census poverty definition:

!

!

!

Line 4: The fourth line down shows the market value of food

stamps when added to cash income and compared to the family

poverty threshold.

Line 5: The fifth line down shows the effect of adding the value of

the EITC plus the partially refundable Child Tax Credit and state

refundable credits, less federal and state income taxes and payroll

taxes, to line 4.

Line 6: The bottom (dashed) line 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 comparing it to an unofficial

CRS-15

“household low-income threshold.” The household low-income

threshold used here applies family poverty income thresholds, which

are based on family size and composition, to households, based on

household size and composition. It must be noted 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.

Figure 8. Effects of Earnings, Transfers and Taxes

on Family Poverty and Household Low-Income Status

of Single Mothers, 1987 to 2006

Percent poor

60%

55%

50%

Poor based on:

45%

40%

35%

Earned income only

+ +

+ +

+ + +

+ cash income other than cash welfare

+ cash welfare (Official Poverty Definition)

+

30%

+ food stamps

+ + +

25%

+ EITC + Child Tax Credit less FICA and income taxes

+

+

+ + +

Income Below Low-Income Threshold:

+ + + + Household

Household cash + food stamps + EITC+ Child Tax Credit

less FICA and income taxes

20%

15%

10%

5%

0%

r

87 88 89 90 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06

19 19 19 19 19 19 19 19 19 19 19 19 19 20 20 20 20 20 20 20

Year

Source: Prepared by the Congressional Research Service (CRS). Based on analysis of U.S. Census

Bureau 1988 to 2007 Current Population Survey (CPS) Annual Social and Economic Supplement

(ASEC) data.

r=Revised estimates based on expanded CPS sample and 2000 decennial census-derived weights.

CRS-16

In viewing Figure 8, note that the trend in earnings is the principal factor

affecting the declining trend in poverty, whereas the other income sources, with the

exception of the EITC, affect the level of poverty, more than its trend, over time.

Evidence of this effect is that most lines in the chart, with the exception of the EITC,

roughly run parallel to the ones above.

Effect of Earnings and Other

Nonwelfare Cash Income on Poverty

Figure 8 shows that between 1993 and 2000, single mothers’ poverty, based on

family earnings alone, fell from 56.2% to 40.8% (line 1). As a result of the economic

recession, their “earned-income poverty rate” rose from 2001 through 2004, and in

2006, at 44.5%, was still above its historic low in 2000. Adding other cash income,

except cash welfare, to family earnings (line 2), reduces poverty in 1993 from 56.2%

(line 1) to 47.4% (line 2), and in 2006 from 44.5% to 35.7%.

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

TANF become unavailable for a family are well below the poverty line. For

example, in January 2003, in only seven states could a single mother with two

children have earnings above the poverty line and still continue to receive TANF

cash assistance.18 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 35.7% to 35.1% in 2006. 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 above in Figure

8.

Effect on Poverty of Counting Selected Income Sources

Not Included in the “Official” Poverty Measure

The following three measures include income from sources not included under

the “official” U.S. Bureau of the Census poverty definition: food stamps, taxes

(including the effects of the EITC and the partially refundable Child Tax Credit) and

income of other unrelated household members.

Effect of Food Stamps on Poverty. The fourth line from the top in Figure

8 shows the effect on the poverty rate of single mothers by counting the value of food

stamps. The line shows that food stamps reduce the poverty rate of single mothers

18

See U.S. Congress, House Committee on Ways and Means, 2004 Green Book, Table 7-16

(TANF Phaseout Points), pp. 7-51 to 7-53. Washington, DC, March 2004.

CRS-17

from about 2 to 3 percentage points over the period (compare the reduction in poverty

from line 3 to line 4).

Effect of Taxes and Tax Credits on Poverty. As noted above, the net

effect of the EITC19 and the Child Tax Credit20 (after counting the effect of reductions

in income from federal and state income taxes and FICA taxes) (line 5), when added

to total family cash income and food stamps (line 4), causes a divergence in trend

from the lines above. This is especially notable after 1993. 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 antipoverty effectiveness of the EITC was approximately three times greater in 2006 than

in 1993. In 1993, the after-tax poverty rate (counting food stamps) among single

mothers dropped from 42.7% (line 4) to 40.7% (line 5), a 2.0 percentage point

(4.7%) reduction. In 2006, the EITC in combination with the Child Tax Credit (after

counting estimated tax payments) reduced poverty from 32.9% to 27.9%, a 5.0

percentage point (15.2%) reduction. The bulk of this reduction is the result of the

EITC, as the Child Tax Credit is comparatively small for most families headed by

single mothers with adjusted gross incomes near the poverty line.

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 decline in poverty based on earned income only

that has occurred 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 an indirect effect on poverty by increasing

earnings and, through earnings, making the EITC available to a greater number of

families.

Effect of Unrelated Household Member’s Income on Poverty. The

household low-income line (bottom line) 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 4 percentage points over the

1987 to 2006 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 1993 from 40.7% (line 5) to 36.8% (line 6) and, in 2006, from 27.9% to 23.7%.

Again, this is most likely an overstatement of the possible effect that shared

19

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.

20

For a discussion of the Child Tax Credit, see CRS Report RS21860, The Child Tax Credit,

by Gregg A. Esenwein.

CRS-18

household living arrangements might have on single mothers’ poverty status because

of uncertainty about the extent to which such income is actually shared.

Degree of Poverty Among Poor Single Mothers

As noted above, the poverty rate measures only the percent of families whose

incomes fall below their respective poverty thresholds, based on family size and

composition. Although the poverty rate provides an overall indication of the level

of need in the population, it does not measure the extent of need among poor

families. Figures 9 and 10 show two different measures of the “poverty gap” among

poor families headed by single mothers — that is, the degree to which poor families’

incomes fall below the poverty income level. In these figures the poverty gap is

depicted as family income as a percent of poverty among poor families. Figure 9

is based on the cash income poverty measure, whereas Figure 10 is based on cash

income plus the value of food assistance and taxes (including the EITC and the Child

Tax Credit). Note that the families depicted in Figure 10 are a subset of those

included in Figure 9, as they are families who remain poor after considering food

stamps and taxes (including the EITC and the Child Tax Credit) — the effects of

which are not counted in Figure 9. In each figure the extent of poverty among poor

families is depicted at various percentiles, based on families ranked by family income

as a percent of poverty.

Figures 9 and 10 show that the median family income as a percent of need (i.e.,

poverty) among poor families has remained relatively steady over the past 18 years.

Based on “official” cash income, for purposes of measuring poverty, the median

family income as a percent of need among poor families headed by single mothers

has ranged from a low of 48% to a high of 53% over the period (Figure 9). Looking

at just the subset of single-mother families who were poor based on a more

comprehensive income definition that includes food stamps and taxes (including the

EITC and Child Tax Credit), the median family income as a percent of need was

somewhat higher over the period, ranging from a high of 66% of poverty in 1991, to

a low of 56% of poverty in 2004. (Figure 10).

Both Figures 9 and 10 show recent declines in income relative to poverty for

the poorest families headed by single mothers. For example, Figure 9, shows that

for the bottom fifth of poor single mothers, family income relative to poverty fell

from a recent high of 28% of poverty in 1996, to a low of 15% of poverty in 2005.

Looking at the subset of single-mother families that were poor based on the more

comprehensive income definition (cash, food stamps, and taxes (including the EITC

and Child Tax Credit)), the bottom fifth have seen a decline in relative economic

well-being from a high of 43% of poverty in 1994, to a low of 22% of poverty in

2006 (Figure 10).

CRS-19

Figure 9. Poverty Gap* Percentiles Based on Cash Income

Among Poor Single-Mother Families, 1987 to 2006

Income as a percent of poverty

100%

90%

Top 20 percent

80%

70%

60%

Top 40 percent

50%

Median (50th Percentile)

40%

Bottom 40 percent

30%

20%

Bottom 20 percent

10%

0%

r

89 990 991 992 993 994 995 996 997 998 999 00 001 002 003 004 005 006

88

87

2

2

2

2

2

2

1

1

1

1

1

1

1

1

1

1

19 19 19

20

Year

Source: Prepared by the Congressional Research Service (CRS). Based on analysis of U.S. Census

Bureau 1988 to 2007 Current Population Survey (CPS) Annual Social and Economic Supplement

(ASEC) data.

* Poor families’ cash income as a percent of families’ poverty thresholds.

r=Revised estimates based on expanded CPS sample and 2000 decennial census-derived weights.

CRS-20

Figure 10. Poverty Gap* Percentiles Based on

Net After-Tax Cash Income (Including the EITC) and the Value

of Food Stamps, Among Poor Single-Mother Families, 1987 to 2006

Income as a percent of poverty

100%

90%

Top 20 percent

80%

70%

Top 40 percent

60%

Median (50th Percentile)

50%

Bottom 40 percent

40%

30%

Bottom 20 percent

20%

10%

0%

87 988 989 990 991 992 993 994 995 996 997 998 999 00

19

1

1

1

1

1

1

1

1

1

1

1

1

20

r

01 002 003 004 005 006

20

2

2

2

2

2

Year

Source: Prepared by the Congressional Research Service (CRS). Based on analysis of U.S. Census

Bureau 1988 to 2007 Current Population Survey (CPS) Annual Social and Economic Supplement

(ASEC) data.

* Poor families’ based on cash after-tax income and the market value of food stamps as a percent of

families’ poverty thresholds.

r=Revised estimates based on expanded CPS sample and 2000 decennial census-derived weights.

Sources and Level of Income

Among Lower-Income Single Mothers

The composition and level of income among the single-mother families at the

bottom of the income distribution has changed markedly in recent years, reflecting

increased earnings supplemented by increased EITC and reductions in cash welfare

and food stamps. Single mothers with the lowest incomes, depicted as the bottom

fifth (bottom quintile) of single mothers ranked by their families’ incomes, by 1999

had more than doubled their earnings since 1994. However, these earnings gains,

even when supplemented by the EITC, have not been sufficient to offset losses in

cash welfare and food stamps that have occurred since 1994 — the year in which

their income was highest. Earnings of single mothers in the bottom income quintile

peaked in 2000 but fell each year through 2005. In 2006, average earnings of single

CRS-21

mothers in the bottom income quintile increased somewhat over 2005. In spite of

their greater earnings, average total income of single mothers in the bottom income

quintile in 2006 was still well below their 1994 income level, which marked a peak

over the 20 years depicted.

Single mothers ranked in the bottom 20% to 40% by income (second quintile)

also experienced significant earnings gains since 1994. For these families, earnings

gains supplemented by the EITC have more than offset reductions in cash welfare

and food stamps over the period, resulting in higher overall income in most recent

years than in 1994. After reaching a peak in 2000, average total income among

mothers in the second quintile has fallen somewhat due to reduced earnings and

EITC, presumably as a result of 2001 economic recession.

Figures 11 and 12 examine sources of income among the bottom quintile

(bottom 20%) and the second lowest quintile (bottom 20% to 40%) of single-mother

families, respectively, based on their pre-tax cash income relative to poverty. The

income to poverty ratios demarcating the break points at which a family qualifies as

being in the bottom and second from the bottom quintiles are shown in Appendix B.

The charts show the average annual income, in 2006 dollars, from the following

sources: cash public assistance (AFDC, TANF, and General Assistance (GA));

Supplemental Security Income (SSI); food stamps (market value); child support and

alimony; other cash income other than earnings; net earnings (earnings net of the

employee share of FICA payroll taxes and any federal or state income taxes); the

EITC; the Child Tax Credit, and state refundable tax credits. The employee share of

FICA payroll taxes, and any federal or state income tax payments are also shown as

negative values. Note that these estimates are based on year-to-year income

comparisons of cross-sectional survey data, rather than a comparison of incomes for

the same families over time.

Figure 11 shows declining reliance on cash welfare and food stamps since 1994,

and increased reliance on earnings, supplemented by the EITC, among families

headed by single mothers in the bottom income quintile. However, earnings gains,

even when supplemented by the EITC, have not been sufficient to offset the losses

in income from cash welfare and food stamps since 1994. Average earnings for these

families peaked in 2000, but total family income ($8,405) still fell short of that

attained in 1994 ($8,654). Since 2000, average earnings fell each year through

2005. Increased food stamp benefits since 2000 have helped to bolster families’

income somewhat, but cash welfare benefits have continued to erode. In 2006,

average total income ($7,587) of single mother families in the bottom income

quintile was only slightly above the 20-year low ($7,322) observed in 2004, and well

below the 20-year peak ($8,654) observed in 1994.

Average cash welfare and food stamp benefits reported by single mothers in the

bottom quintile have fallen since 1994. In 1994, combined average AFDC and

General Assistance benefits were $3,075 for this population; by 2006 combined

TANF and General Assistance had fallen to $854, 25% of their 1994 value.

Similarly, in 1994, average food stamp benefits amounted to $2,996; by 2006 they

amounted to $2,113 — 71% of their 1994 value. In spite of earnings and

supplemented EITC benefits being higher in 2006 than two decades earlier,

reductions in cash welfare and food stamp benefits have resulted in lower average

CRS-22

total income for single mothers at the bottom of the income distribution (i.e., bottom

income quintile).

The growing importance of the EITC as an earnings supplement can be

illustrated by comparing the average EITC as a share of average earnings shown in

Figure 11. Legislative expansions to the EITC in 1990 (phased in between 1991 and

1992) and in 1993 (phased in from 1994 through 1996) expanded the credit’s “work

bonus” to families with children, amounting to a supplement of as much as 40 cents

on each dollar earned. In 1990, the average EITC depicted in Figure 11 amounted

to about 13% of average earnings of mothers in the bottom income quintile. By

1993, the EITC “work bonus” increased to 18% of earnings, and then doubled to

37% of earnings by 1996, once legislative expansions had completely phased in. In

addition to providing needed income to low-income working families, the EITC has

also likely encouraged work and increased earnings.

Figure 12 is similar to Figure 11, but shows average income by source for the

second quintile of single-mother families, ranked by their income relative to poverty.

The chart shows comparatively large gains in average total income from 1993 to

1995, due largely to increased earnings and EITC. During this short period, average

total net income increased from $14,095 to $17,851 — a gain of nearly 27%.

Earnings of single-mother families in the second income quintile peaked in 2000 at

$12,095 (in 2006 dollars) — more than three times what they earned in 1993.

However, from 2000 to 2005 average earnings, and consequently average EITC,

declined among these families. Food stamps have helped to offset recent earnings

losses somewhat, growing by 66% from 2000 to 2005, whereas cash welfare support

continued to diminish over the same period. In 2006, earnings and the EITC

increased somewhat compared to 2005, but income from all other sources fell and

taxes increased, resulting in lower net average income in 2005 than in 2006.

Average total income among single mother families in the second quintile

reached its highest level over the 20-year period examined in 2000. In 2000, the

peak-income year, earnings in combination with the EITC more than offset the loss

in combined cash assistance and food stamps that occurred over the 1995 to 2000

period. Over the period, the gain in average net earnings, in combination with EITC

($6,099), more than offset the $3,519 loss in combined cash assistance and food

stamps. By 2000, average net earnings ($12,095) accounted for 60% of these

families’ incomes ($20,250) and cash assistance ($739) accounted for just under 4%.

In contrast, in 1987, earnings accounted for about 28% of this group’s income

($4,160 in earnings out of a total net income of $14,857), and cash assistance

($5,142) comprised about 35%. In 2000, average total income for families in the

second quintile ($20,250) was 36% above that in 1987 ($14,857).

CRS-23

Figure 11. Bottom Income Quintile* of Single-Mother Families:

Average Annual Income by Source, 1987 to 2006

(in 2006 dollars)

Net Income

$9,000

$8,654 $8,601

$332

$8,026

$8,000

$122

$975

$7,000

$491

$274

$6,000

$5,000

$499

$8,552

$8,273

$8,311

$7,938

$7,923

$7,699 $7,804

$7,736

$7,587

$898

$7,568 $1,195

$949 $1,031

$7,390

$136 $135

$567

$7,353

$130

$7,414

$7,392 $143

$775

$7,322

$932

$1,503

$140

$139

$722

$595

$975 $1,041 $852

$1,727

$804

$547 $678

$464

$836

$1,161

$1,494

$345

$303

$385

$540

$543

$550

$191

$448

$2,488

$1,994

$224

$2,550 $2,760

$264

$349 $503

$432 $262

$240

$1,976

$2,073

$2,598

$1,867 $1,825

$253

$389 $735

**

$2,722

$2,740

$2,364

$2,678

$4,000

$266

$736

$775

$3,000

$99

$120

$179

$185

Earnings (net of taxes)

$1,078 $856

$810

$891

$894

Other income

$552

$581

$541

$503

Child support/alimony

$414

$110

EITC

$695

$2,393

$109

**

$709

$2,589

$2,539

$128

**

Total (Net) Income

$315

$2,996

$2,625 $2,873

$2,567

$289

$570

$543

$648

$2,115

$338

$1,826

$285

$1,683

$247

$2,000

$1,914

$1,749 $1,817

$2,098 $2,075 $2,113

Food Stamps

$334

$3,315

$1,000

$8,405

$640 $7,950

$2,942 $3,095

$3,283 $3,229

$2,809 $2,954

$3,075

$364

$2,779

$2,467

$477

$478

$2,201

$1,744

$1,432

$1,109 $928

$491

$438

$452

$483

$492

SSI

$890 $1,083 $820

$832

$754

AFDC, TANF, GA

Taxes

$0

1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000r 2001 2002 2003 2004 2005 2006

Year

Source: Prepared by the Congressional Research Service (CRS). Based on analysis of U.S. Census Bureau 1988 to 2007 Current Population Survey (CPS) Annual Social and Econo

Supplement (ASEC) data.

* Quintiles based on ranking of ratios of family cash, pre-tax income, relative to poverty. Taxes include federal and state income taxes and FICA taxes.

** Federal child credit (partially refundable portion) amounting to $123 in 2004, and $3 in 2005 and 2006, plus State refundable income tax credits amounting to $24 in 2004, $25

2005 and $33 in 2006.

r Revised estimates based on expanded CPS sample and 2000 decennial census derived weights.

CRS-24

Figure 12. Second Income Quintile* of Single-Mother Families:

Average Annual Inocme by Source, 1987 to 2006

(in 2006 dollars)

Net Income

$21,000

$20,250

$19,720

$19,368 $19,354

$19,708

$19,017 Total (Net) Income

$18,973

$18,772 $438 $277

$2,742

$280 Child Tax Credit

$18,089

$2,653 $2,723

$17,851

$2,209

$2,549

$2,298

$2,744

$17,005

$2,588 EITC

$1,811$16,485

$2,572

$20,000

** **

$19,000

$18,000

$17,000

$16,000

$15,000

$14,000

$15,434

$15,184

$15,052

$14,857

$583 $570 $14,462

$14,320

$14,095 $1,322

$458

$678 $13,973

$475

$673 $663

$13,000

$12,000

$4,160

$1,920

**

$2,299

$6,926

$4,114 $5,298 $4,975 $4,392

$11,000

$4,259

$3,976 $5,224

$6,535

$12,095$11,245$11,358

$10,342$10,045

$10,639

$7,418 $9,065$10,612

$10,246 Earnings (net of taxes)

$10,000

$9,000

$1,997

$8,000

$492

$7,000

$1,827

$2,021

$6,000

$5,000

$588

$433

$2,019

$1,746 $1,769 $1,699

$560

$560

$471

$625

$1,748 $2,123 $2,223

$2,136

$534

$677

$555

$568

$4,000

$3,000

$2,000

$1,000

$1,704

$547

$1,785

$1,765 $2,188

$550

$702

$2,018

$734

$2,133

$2,004

$1,992

$751

$2,050

$833

$2,043

$904

$1,727

$973

$1,518

$1,124

$1,270

$961

$5,142 $4,918

$4,571 $4,500 $4,431

$4,029 $4,155

$1,838

$659

$3,445 $3,017

$1,025

$2,574

$1,955

$0

$848

$921

$918

$914

$1,455 $1,096

$2,111

$2,264

$2,448

$1,011 $1,093 $1,038

$809

$857

$743

$899

$739

$709

$865

$696

$580

$2,182

$1,099

$2,454 $2,388

$1,081 $954

$1,054 $1,254

$2,382 Other income

$890

$1,343

Child support/alimony

$1,228 Food Stamps

$692

$868

$967

$809

$619

$717

$780

$477

-$1,000

SSI

AFDC, TANF, GA

Taxes

1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000r 2001 2002 2003 2004 2005 2006

Year

Source: Prepared by the Congressional Research Service (CRS). Based on analysis of U.S. Census Bureau 1988 to 2007 Current Population Survey (CPS) Annual Social and

Economic Supplement (ASEC) data.

* Quintiles based on ranking of ratios of family cash, pre-tax income, relative to poverty. Taxes include federal and state income taxes and FICA taxes.

** State refundable income tax credits, amounting to an estimated $103 in 2004, and $114 in 2005 and $144 in 2006.

r Revised estimates based on expanded CPS sample and 2000 decennial census derived weights.

CRS-25

Conclusions and Policy Implications

CRS analysis of 20 years of U.S. Census Bureau CPS data shows a dramatic

transformation in single mothers’ welfare, work, and poverty status over the period.

CPS data generally follow the upsurge in the AFDC caseload evidenced by

administrative/program statistics that occurred in the late-1980s and early 1990s, and

the historic declines that followed. Increases in the number of families headed by

single mothers during the late-1980s and early 1990s are likely to have contributed

to the rapid growth in cash welfare caseloads under the AFDC program that occurred

over the period. The number of single mothers increased from about 8.2 million in

1987 to 9.9 million in 1993. Cash welfare caseloads peaked in March 1994, and have

dropped dramatically since, whereas the number of single mothers stayed close to

10 million in most years since 1994. In 2006, the number of single mothers reached

10.9 million, but the number reporting receipt of cash welfare has continued to fall.

Economic conditions certainly contributed to the welfare caseload increase that began

in the late 1980s and the historic declines since 1994. A number of policy

interventions have helped to increase the economic returns to work and to encourage

work over welfare. Increases to the EITC and the minimum wage, and erosion of

most states’ welfare benefit levels due to inflation, have helped to increase the

economic returns to work compared to welfare in recent years. States’ extension of

work requirements to mothers with younger children, increased welfare sanction

authority, and adoption of time-limits on welfare receipt, first experimented with

under AFDC waiver authority and now widely adopted by states under TANF, have

helped to transform the welfare system from an entitlement program to a program

that emphasizes self-support, primarily through work, and personal responsibility.

The CPS data show that single mothers are considerably more likely to be

working, and less likely to be poor or receiving welfare in most recent than in earlier

years (Figure 2). Although many of these changes precede passage of the 1996

welfare law, reductions in welfare receipt have since been especially large. Since

1996, poor single mothers are more likely to work during the year than to receive

welfare (Figure 7). However, reductions in poverty among single mothers have not

been as large as the concurrent declines in cash welfare receipt and increased work

among single mothers in recent years. Moreover, CPS data indicate that welfare

receipt rates among very poor families based on their pre-transfer income (i.e.,

income other than welfare) have dropped considerably in recent years (Figure 5).

Among single-mother families whose incomes are lowest (the bottom 20% of

single-mothers based on family income relative to poverty), income from earnings

has grown markedly since 1993 but has failed to offset losses in cash welfare and

food stamp benefits which have occurred since (Figure 10). While single mothers

are less dependent on welfare in most recent than in past years, increased work has

not resulted in marked gains in net income for the bottom fifth of single mothers,

ranked by family income relative to poverty. In 2006, average income of these

families was well below its 2000 level (its most recent high-water mark), and only

slightly above its 2004 level, which marked the lowest level observed in the 20 years

examined.

The CPS data show that although welfare receipt and poverty among single

mothers has declined in recent years, mothers receiving welfare are now more likely

CRS-26

to be working, and poor mothers are now less likely to be receiving welfare and more

likely to be working than in past years. Prospects of single mothers working their

way off welfare and out of poverty hinge in large part on their finding full-time,

stable employment at a sufficient wage.

CPS data show that most single mothers work full-time schedules (35 or more

hours per week) when they work (See Figure 13). In 2006, among single mothers

who combined welfare and work during the year, 59% worked full-time schedules

— not that much different from working poor single mothers who did not receive

welfare, of whom 61% worked full-time schedules. However, mothers who worked

and received cash welfare were considerably less likely to have worked full-year (50

to 52 weeks) (30%) than their working poor counterparts who did not receive cash

welfare (52%).

Figure 13. Working Single Mothers’ Job Attachment,

by Welfare and Poverty Status: 2006

Percent

100%

8.2%

90%

21.8%

Part-time, part-year

4.9%

Part-time, part-year

6.5%

Part-time, full-year

10.6%

Full-time, part-year

78.0%

Full-time, full-year

10.0%

31.4%

80%

13.7%

70%

17.7%

Part-time, full-year

9.3%

60%

50%

40%

25.9%

Full-time, part-year

39.1%

68.2%

30%

20%

10%

34.6%

Full-time, full-year

20.2%

0%

Worked and received

cash welfare during

the year

Poor, received no

cash welfare

Near poor

(100% - 150% of

poverty), no cash

welfare

Income above 150% of

poverty, no cash

welfare

Welfare and poverty status

Source: Prepared by the Congressional Research Service (CRS). Based on analysis of U.S. Census

Bureau 2007 Current Population Survey (CPS) Annual Social and Economic Supplement (ASEC)

data.

NOTE: Details may not sum to 100% due to rounding.

One policy challenge to reduce poverty and welfare dependency among single

mothers may be to assist mothers in moving to full-time, full-year work. However,

full-time full-year work is likely necessary, but not sufficient, for some single

mothers to have incomes above poverty and not rely on cash welfare. About one in

five (21.3%) single mothers who combined work and welfare worked full-time, fullyear, and one in three (32.8%) poor single mothers who did not receive welfare

CRS-27

worked full-time full-year. (See Figure 13). For these mothers, full-time attachment

to a job was insufficient to move them off of welfare or out of poverty. Single

mothers with incomes somewhat above poverty (100% to 150% of poverty) were

much more likely to have worked full-time full-year (59.1%) than working poor

mothers not receiving welfare (32.8%) and nearly 3 times as likely as mothers who

combined work and welfare during the year (21.3%).

In March 2007, most working single mothers who were poor or received cash

welfare earned more than the federal statutory minimum wage of $5.15 per hour

applied at that time.21 Figure 14 shows that in March 2007, the median hourly wage

of single mothers who were either poor or received welfare during the prior year was

estimated at $8.50 per hour;22 half of such mothers earned more, and half earned less.

The middle 50% of such mothers earned between $7.00 and $11.00 per hour

(denoted by the inter-quartile range). Working mothers who were near poverty

(between 100% and 149% of poverty) and did not receive cash welfare in the prior

year earned 95 cents per hour more than their poor or welfare-reliant counterparts,

at the median hourly wage ($9.45 per hour); 50 percent of these near poor working

mothers earned between $8.00 and $11.71 per hour.

Combined with their somewhat higher wages, near-poor single mothers are

more likely to work full-time full-year than their counterparts who receive cash

welfare or are poor. Clearly full-time full-year work lessens the chances that a single

mother and her children will be poor or receive cash welfare, but does not completely

eliminate those chances. Among single mothers who did not work full-time fullyear, 61% were poor or received cash welfare in 2006, compared to only 13% who

worked full-time full-year (not shown in figures).

Single mothers have lost economic ground since the 2001 recession. Their

situation is likely to worsen if the economy falters. The bottom fifth of single

mothers, ranked by income relative to poverty, appear economically worse off than

before passage of the 1996 welfare reform law, on the basis of their measured

income. In 2004, their total income was at the lowest level measured over the 20

years examined. Single mothers ranked in the bottom 20% to 40% based on income

relative to poverty have also failed to recoup income losses since the 2001 recession,

but their measured incomes are still well above pre welfare reform levels. Among

21

P.L. 110-28, enacted on May 25, 2007, raised the federal minimum wage to $5.85,

effective July 2007, and in subsequent years to $6.65, effective July 2008, and $7.25,

effective July 2009.

22

The CPS asks questions about hourly wage rates of hourly workers for only about one

fourth of the CPS sample who are leaving the survey — a group technically referred to as

the “outgoing rotation group.” (The CPS interviews households for eight months. After four

months of interviews, a household leaves the survey for four months, and afterwards is

interviewed for an additional four months, after which the household leaves the survey

permanently. In March, selected questions, such as hourly wage rates, are asked only of

households who have been in the survey for four or eight months, and will be leaving the

survey in the following month (either temporarily or permanently)). The estimates of hourly

earnings shown in Figure 14 are based on hourly wages of hourly workers, and for other

workers, estimated hourly earnings based on reported gross weekly earnings divided by

usual hours worked.

CRS-28

families headed by single mothers their incidence of poverty has increased from a

historic low of 31.8% in 2000, to 35.1% in 2006.

A strong economy may be necessary, but not sufficient, to markedly reducing

poverty among families headed by single mothers. Absent significant increases in

single mothers’ job attachment or hourly earnings, income supports in the form of

child support, earnings supplements, such as the EITC, food, housing, and medical

assistance, as well as cash welfare, are likely to continue to play important roles in

addressing the needs of single-mother families. A challenge for these and other

approaches will be to reduce basic unmet needs and at the same time promote

economic self-sufficiency. Current signs of a faltering economy spotlights this

challenge.

Figure 14. Hourly Wage Rates* of Working Single Mothers

in March 2007, by Welfare and Poverty Status in 2006

(Median and Inter-Quartile Range)

Hourly wage rate

$25.00

$20.00

$20.10

$15.00

$15.00

$11.71

75th percentile

$11.00

$10.38

$10.00

$9.45

Median

$8.50

25th percentile

$7.00

$8.00

$5.00

$0.00

Poor or

received welfare

Near poor

(100% to 149% of poverty)

no welfare received

Income 150% of poverty and above,

no welfare received

Source: Prepared by the Congressional Research Service (CRS). Based on analysis of U.S. Census

Bureau 2007 Current Population Survey (CPS) Annual Social and Economic Supplement (ASEC)

data.

* Hourly wage for hourly wage workers, and estimated hourly wage equivalent, based on reported

gross weekly earnings divided by usual hours worked, for CPS outgoing rotation group (approximately

1/4th of the CPS sample).

CRS-29

Appendix A: Cash Welfare

Under-Reporting on the CPS

A comparison of AFDC/TANF administrative statistics and CPS-estimated

caseload counts suggests that the CPS undercounts actual cases and that the CPS

undercount has worsened in recent years. Figure A-1 shows that from 1987 to 1991,

the CPS accounted for roughly 80% of the AFDC administrative caseload count, but

in 2006 the CPS captured only about 54%.23 Worsened reporting of cash welfare on

the CPS makes it difficult to gauge how much of the drop in welfare receipt among

single mothers represents eligible families who do not receive assistance, rather than

families who do not report actual welfare aid on the CPS.

Figure 15. AFDC/TANF Cases:

CPS Estimates Versus Administrative Caseload Counts

(Annual Monthly Average), 1987 to 2006

Percent

Number (in millions)

100%

5.0

90%

4.5

Administrative count (left axis)

80%

4.0

CPS as a percent of

administrative count

(right axis)

3.5

70%

60%

3.0

CPS count (left axis)

2.5

50%

2.0

40%

1.5

30%

1.0

20%

0.5

10%

0%

0.0

87

19

19

88

19

89

9

19

0

19

91

9

19

2

93

19

19

94

19

95

19

96

19

97

19

98

19

99

20

r

00

01

20

20

02

20

03

20

04

20

05

0

20

6

Year

Source: Prepared by the Congressional Research Service (CRS). Based on analysis of U.S. Census

Bureau 1988 to 2007 Current Population Survey (CPS) Annual Social and Economic Supplement

(ASEC) data and Department of Health and Human Services (DHHS) caseload data.

r Revised estimates based on expanded CPS sample and 2000 decennial census-derived weights.

23

The CPS estimates are for all adults reporting receipt of AFDC or TANF during the year,

converted to an estimate of an annual monthly average, based on the number of months over

the year recipients reported receiving assistance. For a detailed discussion of cash welfare

under-reporting on the CPS and other surveys see Bavier, Richard. Accounting for increases

in failure to report AFDC/TANF receipt. Unpublished manuscript. Washington, DC.

Office of Management and Budget, 2000.

CRS-30

Figure A-1. Support Table 1. AFDC/TANF Cases: CPS versus

Administrative Caseload Counts, Annual Monthly Average,

1987 to 2006

(numbers in millions)

Year

1987

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2000r

2001

2002

2003

2004

2005

2006

Persons reporting

AFDC or TANF

receipt on the CPSa

3.039

3.056

2.901

3.226

3.554

3.596

3.844

3.551

3.193

3.022

2.355

1.892

1.464

1.320

1.392

1.216

1.140

1.346

1.160

1.227

0.955

AFDC and TANF

cases based on

administrative datab

3.719

3.691

3.738

3.995

4.434

4.765

4.949

4.972

4.734

4.380

3.690

3.007

2.515

2.181

2.181

2.075

2.023

2.001

1.958

1.876

1.764

CPS as a percent of

administrative total

81.7

82.8

77.6

80.8

80.2

75.5

77.7

71.4

67.8

69.0

63.8

62.9

58.2

60.5

63.8

58.6

56.3

67.3

59.3

65.4

54.1

Source: Congressional Research Service (CRS) estimates based on U.S. Bureau of the Census 1988

to 2006 Current Population Survey (CPS) Annual Social and Economic Supplement (ASEC) data and

U.S. Department of Health and Human Services (DHHS) AFDC and TANF caseload data.

a. Estimated average monthly number based on number of months CPS respondents indicated they

received AFDC or TANF during the year.

b. Average monthly number of AFDC cases in the 50 states and the District of Columbia.

r = Revised estimates based on expanded CPS sample and 2000 decennial census-derived weights.

CRS-31

Appendix B: Family Income to Poverty Ratios:

Cutoffs for Income Quintiles

Figure B-1 shows the income relative to poverty cutoffs for defining the first

and second income quintiles depicted in Figures 11 and 12. The dark lines represent

the level of family cash income (i.e., the income definition for measuring poverty

under the official U.S. Bureau of the Census poverty definition) as a percent of

poverty which defines the bottom fifth and bottom two-fifths of single-mother

families, ranked by family relative to poverty. The lighter-shaded lines show other

income percentiles relative to poverty. The figure shows, for example that the

bottom fifth of single-mother families ranked by official cash income relative to

poverty had family income below 42% of poverty in 1992. By 2002, the relative

income of the bottom fifth (20th percentile) of single-mother families increased to

66% of the poverty line, but by 2006 stood at 59% of poverty. Similarly, the secondfifth (between the 20th and 40th percentiles) of single-mother families had family

income above 42% of poverty but below 85% of poverty in 1992. By 2002, the

second-fifth of single mother families had family incomes above 66% of poverty but

below 123% of poverty. In 2006, the second-fifth of single mother families declined,

and ranged between 59% and 113% of poverty. The figure shows that the bottom

10% of single-mother families has shown essentially no improvement over the 20year period.

Figures B-2 and B-3 are similar to Figure B-1, but depict single-mother

families’ income rankings based on alternative definitions of income relative to

poverty. Figure B-2, for example, ranks families based on family after-tax income

(including the EITC) plus food stamps, whereas Figure B-3 ranks families based on

household after-tax income plus food stamps, relative to a household poverty income

threshold based on household size and composition. In both cases, Figures B-2 and

B-3 show comparatively better income position relative to poverty than does Figure

B-1, which uses the official poverty income definition. For example, in 2006, the

bottom fifth of single-mother families had incomes below 59% of poverty under the

official poverty income definition, shown in Figure B-1. When taxes, including the

EITC, and food stamps are considered the bottom fifth of single-mother families had

incomes below 78% of poverty (shown in Figure B-2), and if household after-tax

income and food stamps are counted against a revised household poverty threshold,

the bottom 20% of single-mother families have incomes below 89% of poverty

(shown in Figure B-3). Although the alternate income definitions also result in

improved income standing relative to the official poverty income definition for the

bottom 10% of single-mother families, the trend over the 20-year period shows little

improvement.

CRS-32

Figure B-1. Income to Poverty Percentiles of Mother-Only Families

Based on Ranking of Families by Family Cash Income

Relative to Family Poverty Income Thresholds, 1987 to 2006

Income as a percent of poverty

200%

190%

180%

170%

160%

150%

50th percentile

140%

130%

120%

40th percentile

110%

Poverty Line

100%

90%

30th percentile

80%

70%

60%

20th percentile

50%

40%

30%

10th percentile

20%

10%

0%

r

01 002 003 004 005 006

87 988 989 990 991 992 993 994 995 996 997 998 999 00

2

2

2

2

2

20

1

1

1

1

19

1

1

1

1

1

1

1

1

20

Year

Source: Prepared by the Congressional Research Service (CRS). Based on analysis of U.S. Census

Bureau 1988 to 2007 Current Population Survey (CPS) Annual Social and Economic Supplement

(ASEC) data.

r Revised estimates based on expanded CPS sample and 2000 decennial census-derived weights.

CRS-33

Figure B-2. Income to Poverty Percentiles of Mother-Only Families,

Based on Ranking of Families by Combined After-Tax and

Food Stamp Income Relative to Family Poverty Income Thresholds,

1987 to 2006

Income as a percent of poverty

200%

190%

180%

170%

160%

50th percentile

150%

140%

130%

40th percentile

120%

110%

100%

Poverty Line

30th percentile

90%

80%

20th percentile

70%

60%

50%

10th percentile

40%

30%

20%

10%

0%

r

87 88 89 90 91 92 93 94 95 96 97 98 99 00 001 002 003 004 005 006

2

2

2

2

2

2

19 19 19 19 19 19 19 19 19 19 19 19 19 20

Year

Source: Prepared by the Congressional Research Service (CRS). Based on analysis of U.S. Census

Bureau 1988 to 2007 Current Population Survey (CPS) Annual Social and Economic Supplement

(ASEC) data.

r Revised estimates based on expanded CPS sample and 2000 decennial census-derived weights.

CRS-34

Figure B-3. Income to Poverty Percentiles of Mother-Only Families

Based on Ranking of Families by Household Combined After-Tax and

Food Stamp Income Relative to Household Poverty Income

Thresholds, 1987 to 2006

Income as a percent of poverty

200%

190%

180%

170%

50th percentile

160%

150%

40th percentile

140%

130%

120%

30th percentile

110%

Poverty Line

100%

90%

20th percentile

80%

70%

60%

10th percentile

50%

40%

30%

20%

10%

0%

r

87 88 89 90 91 92 93 94 95 96 97 98 99 00 001 002 003 004 005 006

2

2

2

2

2

2

19 19 19 19 19 19 19 19 19 19 19 19 19 20

Year

Source: Prepared by the Congressional Research Service (CRS). Based on analysis of U.S. Census

Bureau 1988 to 2007 Current Population Survey (CPS) Annual Social and Economic Supplement

(ASEC) data.

r Revised estimates based on expanded CPS sample and 2000 decennial census-derived weights

CRS-35

Figure B-1 Support Table. Income to Poverty Percentiles of

Mother-Only Families Based on Ranking Families by Family

Cash Income Relative to Family Poverty Income Thresholds,

1987 to 2006

Income as a percent of poverty defined at each percentile

Year

10th

20th

Percentile Percentile

30th

Percentile

40th

Percentile

50th

Percentile

1987

29.3

46.7

65.6

87.2

116.5

1988

27.8

44.5

65.0

86.2

121.7

1989

29.6

49.3

69.5

94.2

126.8

1990

29.6

47.3

66.5

88.8

120.7

1991

27.3

44.9

63.4

85.3

114.2

1992

26.5

42.5

62.0

84.7

113.5

1993

28.2

44.4

61.0

84.2

114.6

1994

30.1

48.2

67.9

91.8

122.9

1995

31.9

53.2

74.3

99.8

130.0

1996

31.9

50.6

72.8

100.5

130.0

1997

29.3

51.4

73.9

100.2

130.3

1998

29.5

54.5

82.0

106.9

138.3

1999

32.1

61.0

87.2

119.0

148.0

2000

37.2

70.5

96.7

125.7

155.0

2000r

34.2

65.3

93.7

125.3

156.2

2001

29.1

64.0

92.9

122.9

154.1

2002

32.3

65.5

94.3

122.7

157.4

2003

28.3

60.4

87.7

120.1

154.8

2004

26.4

57.3

85.6

117.1

151.4

2005

27.7

55.6

86.2

115.6

148.6

2006

27.3

58.5

86.2

112.5

145.4

Source: Congressional Research Service (CRS) estimates based on analysis of U.S. Census Bureau

1988 to 2007 Current Population Survey (CPS) Annual Social and Economic Supplement (ASEC)

data.

r = Revised estimates based on expanded CPS sample and 2000 decennial census-derived weights.

CRS-36

Figure B-2 Support Table. Income to Poverty Percentiles of

Mother-Only Families Based on Ranking of Families by

Combined After-Tax and Food Stamp Income Relative to Family

Poverty Income Thresholds, 1987 to 2006

Year

1987

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2000r

2001

2002

2003

2004

2005

2006

Income as a percent of poverty defined at each percentile

20th

30th

40th

50th

10th

Percentile Percentile

Percentile

Percentile

Percentile

47.2

65.3

80.6

97.5

119.3

43.8

61.8

79.6

97.1

123.7

47.4

66.2

83.5

102.7

127.8

46.7

65.1

81.7

100.2

122.8

46.9

64.5

80.1

97.6

121.3

43.8

61.5

78.4

98.7

121.7

45.7

62.9

78.7

98.2

122.4

50.0

68.2

85.8

108.8

132.6

51.5

72.6

93.3

117.4

139.1

51.8

71.3

92.2

118.1

139.6

45.4

71.4

94.3

117.7

139.7

48.2

75.0

101.1

124.6

148.1

50.1

80.1

105.9

131.2

153.7

55.3

89.4

112.6

135.7

157.8

50.1

83.5

110.5

135.2

158.1

46.7

82.8

110.0

133.9

157.3

50.1

82.3

110.9

134.8

160.1

42.8

76.7

104.9

132.4

160.9

42.8

75.9

105.0

134.3

159.5

44.3

76.6

106.4

134.3

158.0

44.6

77.9

105.6

130.0

157.1

Source: Congressional Research Service (CRS) estimates based on analysis of U.S. Census Bureau

1988 to 2007 Current Population Survey (CPS) Annual Social and Economic Supplement (ASEC)

data.

r = Revised estimates based on expanded CPS sample and 2000 decennial census-derived weights.

CRS-37

Figure B-3 Support Table. Income to Poverty Percentiles of

Mother-Only Families Based on Families Ranked by Household

Combined After-Tax Food Stamp Income Relative to Household

Poverty Income Thresholds, 1987 to 2006

Year

1987

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2000r

2001

2002

2003

2004

2005

2006

Income as a percent of poverty defined at each percentile

20th

30th

40th

50th

10th

Percentile Percentile

Percentile

Percentile

Percentile

51.1

69.3

85.6

104.5

130.1

49.1

67.5

85.0

105.1

132.2

52.1

71.9

89.1

111.9

138.3

52.8

70.2

87.8

108.7

134.0

52.3

70.1

86.3

108.2

134.7

49.4

67.6

86.3

108.1

132.7

50.9

68.7

84.9

107.6

132.6

54.5

74.0

94.7

119.9

143.6

57.2

79.7

102.4

126.7

149.8

57.2

78.7

102.0

126.3

149.8

54.0

79.4

104.4

128.7

152.3

56.4

83.2

109.8

135.3

160.2

58.6

90.2

117.1

143.0

168.9

65.4

99.5

122.8

148.6

171.4

61.6

95.3

121.1

148.2

173.0

57.3

93.0

120.0

144.2

168.7

59.2

93.3

121.2

146.6

174.3

56.1

88.5

117.3

144.8

173.1

53.6

89.3

118.5

146.4

172.2

55.7

88.1

118.8

145.1

169.8

58.3

89.1

117.3

142.0

168.8

Source: Congressional Research Service (CRS) estimates based on analysis of U.S. Census Bureau

1988 to 2007 Current Population Survey (CPS) Annual Social and Economic Supplement (ASEC)

data.

r = Revised estimates based on expanded CPS sample and 2000 decennial census-derived weights.

CRS-38

Appendix C: Support Tables

Data Note

The March 2002 CPS and subsequent surveys reflect an expanded sample of

households compared to prior year surveys and use population control totals from the

2000 decennial census to weight the sample up to U.S. population totals. Prior year

surveys included in this report were based on 1990 decennial census-derived weights,

or for the March 1987 through March 1990 CPS, 1980 decennial census-derived

weights. Shortly after release of the March 2002 CPS, the Census Bureau released

a revised March 2001 CPS. The revised data reflect an expanded sample, not

included in the original release of the March 2001 CPS, and weights derived from the

2000 decennial census, as opposed to the 1990 decennial census contained in the

original release of the March 2001 CPS. The revised March 2001 CPS estimates are

deemed to be preferred to those from the original release due to the larger sample size

from which they’re derived and the use of more recently derived population-based

weights. Data from both the original and revised March 2001 CPS are included in

this appendix for comparison, but the analysis and figures in the body of this report

are based on the revised data.

CRS-39

Figure 1 Support Table. Single Mothers: Poverty and Cash

Welfare Receipt, 1987 to 2006

(in thousands)

Year

1987

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2000r

2001

2002

2003

2004

2005

2006

Number of

mother only

families

8,193

8,321

8,400

8,745

9,031

9,567

9,860

9,837

9,887

10,052

9,874

9,881

9,741

9,425

9,712

10,044

10,206

10,411

10,442

10,476

10,938

Number

receiving

AFDC/TANF

2,719

2,737

2,537

2,901

3,101

3,300

3,439

3,166

2,862

2,669

2,225

1,872

1,543

1,174

1,215

1,064

1,025

1,253

1,054

1,102

991

Poor but not

receiving

AFDC/TANF

1,399

1,380

1,452

1,456

1,554

1,691

1,722

1,754

1,818

1,946

2,211

2,253

2,216

2,100

2,251

2,501

2,577

2,610

2,890

2,837

3,120

Neither poor nor

receiving

AFDC/TANF

4,076

4,204

4,411

4,387

4,375

4,575

4,700

4,916

5,207

5,437

5,438

5,756

5,981

6,151

6,246

6,479

6,604

6,448

6,498

6,537

6,827

Source: Congressional Research Service (CRS) estimates based on analysis of U.S. Census Bureau

1988 to 2007 Current Population Survey (CPS) Annual Social and Economic Supplement (ASEC)

data.

r = Revised estimates based on expanded CPS sample and 2000 decennial census-derived weights.

CRS-40

Figure 2 Support Table. Welfare, Work and Poverty Status

Among Single Mothers, 1987 to 2006

Year

1987

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2000r

2001

2002

2003

2004

2005

2006

Percent who

worked

during year

67.3

68.9

70.1

69.8

68.7

67.2

68.1

71.4

73.0

75.1

77.3

79.6

82.0

83.4

82.7

81.1

80.3

78.7

77.7

77.6

77.3

Percent poor

(“official

definition”)

44.7

43.9

41.7

43.7

45.4

45.4

45.2

42.7

40.2

39.8

40.0

37.3

34.0

30.9

31.8

32.4

32.2

33.9

34.9

34.7

35.1

Percent who received AFDC/TANF

during the year

Did not work

Worked

Total

during year

during year

33.2

21.8

11.4

32.9

21.1

11.8

30.2

20.1

10.1

33.2

20.9

12.3

34.3

22.0

12.3

34.5

22.2

12.3

34.9

21.8

13.1

32.2

18.8

13.4

28.9

16.5

12.4

26.6

14.6

12.0

22.5

11.4

11.1

18.9

8.2

10.7

15.8

6.5

9.3

12.5

5.6

6.9

12.5

5.3

7.2

10.6

5.1

5.5

10.0

4.6

5.4

12.0

6.1

5.9

10.1

5.2

4.9

10.5

6.6

3.9

9.1

4.7

4.4

Source: Congressional Research Service (CRS) estimates based on analysis of U.S. Census Bureau

1988 to 2007 Current Population Survey (CPS) Annual Social and Economic Supplement (ASEC)

data.

r = Revised estimates based on expanded CPS sample and 2000 decennial census-derived weights.

CRS-41

Figure 3 Support Table. Employment Rates of Single Mothers

and Married Mothers by Age of Youngest Child,

March 1988 to March 2007

(percent of single mothers employed in March)

Single mothers

With a Youngest Youngest Youngest

child

child

child

child

aged

under under age aged 3 to

6 to 17

5

3

Year age 18

1988 57.4

35.1

52.9

69.1

1989 58.2

37.9

53.1

70.0

1990 60.3

38.0

61.0

70.9

1991 58.1

36.6

55.7

70.2

1992 57.3

35.2

54.1

69.8

1993 57.3

35.1

54.8

70.1

1994 58.0

37.7

55.2

69.3

1995 61.1

43.1

58.5

70.5

1996 63.5

44.7

60.4

72.9

1997 65.6

51.5

64.3

72.0

1998 68.8

54.8

63.7

76.4

1999 70.7

55.8

69.8

77.1

2000 72.8

59.1

72.7

78.5

2001 73.0

56.1

74.4

79.8

2001r 72.5

57.6

71.3

79.1

2002 71.2

57.9

71.0

76.3

2003 69.6

54.8

69.3

75.4

2004 69.7

54.1

69.5

75.7

2005 68.9

53.7

66.7

75.7

2006 69.6

57.0

68.0

75.1

2007 70.0

56.5

68.6

76.0

Married mothers

With a Youngest Youngest

child

Youngest

child

child

aged

child aged

under under age

3 to 5

6 to 17

3

age 18

61.8

50.7

58.1

69.6

63.0

51.4

60.8

70.6

63.4

52.7

60.9

70.8

63.1

52.7

60.5

70.5

63.9

53.1

59.4

71.9

63.9

53.2

59.4

71.9

65.5

56.0

61.2

72.6

67.1

57.4

63.9

73.4

67.6

58.2

63.3

74.2

68.5

58.3

64.4

75.2

67.9

58.3

64.1

74.2

67.9

57.0

63.1

75.1

68.4

56.8

66.0

75.0

68.5

57.1

64.7

75.4

68.0

56.0

64.2

75.1

66.7

54.9

61.7

74.1

66.3

53.5

61.7

74.2

65.3

52.4

62.3

72.7

65.9

54.9

61.9

72.8

66.1

55.4

61.8

73.1

67.3

56.9

63.0

74.2

Source: Congressional Research Service (CRS) estimates based on analysis of U.S. Census Bureau

1988 to 2007 Current Population Survey (CPS) Annual Social and Economic Supplement (ASEC)

data.

r = Revised estimates based on expanded CPS sample and 2000 decennial census-derived weights.

CRS-42

Figures 4 and 5 Support Table. Single-Mother Family Cash Welfare Recipiency Rates,

by Pre-Transfer Income Poverty Status,* 1987 to 2006

Year

1987

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2000r

2001

2002

2003

2004

2005

2006

All single-mother

families

Total

AFDC/TANF

AFDC/TANF

Number

recipiency

Number

recipiency

(in 000s)

rate (%)

(in,000s)

rate (%)

8,193

33.2

3,820

63.4

8,321

32.9

3,816

63.8

8,400

30.2

3,672

60.5

8,745

33.2

4,029

63.8

9,031

34.3

4,276

63.6

9,567

34.5

4,536

62.7

9,860

34.9

4,679

63.2

9,837

32.2

4,474

60.8

9,887

28.9

4,181

56.5

10,052

26.6

4,168

53.3

9,874

22.5

4,119

46.3

9,881

18.9

3,834

41.2

9,741

15.8

3,443

35.6

9,425

12.5

3,025

30.6

9,712

12.5

3,184

29.3

10,044

10.6

3,348

25.3

10,206

10.0

3,359

23.3

10,411

12.0

3,591

27.3

10,442

10.1

3,725

22.4

10,476

10.5

3,719

23.7

10,938

9.1

3,909

20.2

Single-mother families with pre-transfer income below poverty

Pre-transfer income from

Pre-transfer income

0$ in pre-transfer

Pre-transfer income

25% to below 50% of

from 50% to below

income

below 25% of poverty

poverty

100% of poverty

AFDC/TANF

AFDC/TANF

AFDC/TANF

AFDC/TANF

Number

recipiency

Number

recipiency

Number

recipiency

Number

recipiency

(in 000s)

rate (%)

(in 000s)

rate (%)

(in 000s)

rate (%)

(in 000s)

rate (%)

1,020

88.7

1,003

77.0

609

59.9

1,179

31.8

1,055

89.5

970

73.8

723

53.3

1,064

36.8

1,022

85.7

871

72.8

593

55.6

1,183

32.2

1,142

88.4

909

75.1

677

60.4

1,294

35.9

1,215

87.3

973

79.2

689

63.6

1,391

32.4

1,159

85.2

1,102

73.5

819

56.4

1,450

40.1

1,104

84.7

1,180

78.3

909

60.0

1,477

37.3

961

82.0

1,058

75.2

835

61.0

1,618

38.7

753

80.3

941

73.2

862

59.7

1,625

34.2

776

76.6

838

71.9

994

52.2

1,560

32.4

685

68.4

846

62.6

843

46.2

1,736

30.0

554

61.3

778

55.7

806

45.1

1,682

26.2

378

56.5

711

46.0

736

37.9

1,617

25.2

350

51.8

482

43.8

651

36.5

1,536

19.2

412

45.9

561

42.6

656

33.5

1,553

18.4

491

34.8

623

33.4

640

30.7

1,587

17.1

413

42.6

615

32.3

657

24.7

1,665

14.8

578

44.2

659

39.7

701

29.6

1,641

15.7

581

37.5

634

31.1

754

23.3

1,750

14.0

612

35.3

599

35.5

824

23.0

1,679

15.7

596

30.8

652

28.7

750

23.2

1,907

12.7

Source: Congressional Research Service (CRS) estimates based on analysis of U.S. Census Bureau 1988 to 2007 Current Population Survey (CPS) Annual Social and Economic

Supplement (ASEC) data.

Note: Details may not sum to totals due to rounding.

* Family poverty status based on cash income other than cash welfare.

r = Revised estimates based on expanded CPS sample and 2000 decennial census-derived weights.

CRS-43

Figure 6 Support Table. Food Stamp Recipiency Rates Among

Single-Mother Families, by Household Income Relative to

Household Poverty Threshold, 1987 to 2006

Year

1987

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2000r

2001

2002

2003

2004

2005

2006

Household income below 130% of poverty

Household income Household income

All single-mother

less than 50% of from 50% to below

families

Total

poverty

130% of poverty

Food

Food

Food

Food

stamp Number stamp Number

stamp Number stamp

Number recipiency

(in

recipiency

(in

recipiency

(in

recipiency

(in 000s)

rate

000s)

rate

000s)

rate

000s)

rate

8,193

35.8

4,063

65.7

1,595

76.1

2,469

59.0

8,321

36.3

4,121

65.7

1,706

75.1

2,414

59.0

8,400

33.9

3,917

63.7

1,466

76.9

2,451

55.8

8,745

37.1

4,265

68.4

1,651

79.4

2,614

61.4

9,031

39.1

4,472

68.8

1,736

79.9

2,736

61.7

9,567

41.1

4,756

70.9

1,970

79.8

2,787

64.5

9,860

42.5

4,990

70.8

1,955

80.7

3,034

64.4

9,837

40.2

4,673

70.9

1,786

80.3

2,887

65.1

9,887

37.2

4,494

66.5

1,539

77.3

2,955

60.9

10,052

35.8

4,545

65.0

1,633

76.8

2,912

58.4

9,874

32.4

4,392

61.5

1,642

73.1

2,750

54.6

9,881

29.8

4,193

56.7

1,491

69.5

2,703

49.6

9,741

24.9

3,746

51.5

1,274

63.3

2,472

45.4

9,425

22.3

3,420

49.8

1,013

66.3

2,407

42.9

9,712

22.9

3,526

50.3

1,128

64.6

2,398

43.6

10,044

23.5

3,780

50.1

1,281

60.6

2,499

44.8

10,206

24.6

3,809

51.6

1,268

65.2

2,541

44.8

10,411

25.6

3,969

53.7

1,367

64.1

2,602

48.2

10,442

27.0

4,005

57.0

1,465

68.2

2,540

50.6

10,477

27.8

4,139

56.1

1,507

65.9

2,632

50.4

10,938

26.3

4,303

54.2

1,455

66.9

2,948

48.0

Source: Congressional Research Service (CRS) estimates based on analysis of U.S. Census Bureau

1988 to 2007 Current Population Survey (CPS) Annual Social and Economic Supplement (ASEC)

data.

Note: Details may not sum to totals due to rounding.

r = Revised estimates based on expanded CPS sample and 2000 decennial census-derived weights.

CRS-44

Figure 7 Support Table. Poor Single Mothers: Work and

Welfare Status During the Year, 1987 to 2006

Year

1987

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2000r

2001

2002

2003

2004

2005

2006

Number

of poor

single

mothers

(in 000s)

3,661

3,650

3,506

3,821

4,101

4,339

4,456

4,203

3,971

4,005

3,946

3,685

3,314

2,911

3,090

3,259

3,284

3,525

3,648

3,640

3,841

Received

cash

welfare

during

year (%)

61.8

62.2

58.6

61.9

62.1

61.0

61.4

58.3

54.2

51.4

44.0

38.9

33.1

27.9

27.2

23.2

21.5

26.0

20.8

22.1

18.8

Worked but

Received

did not

Neither

cash

Worked

welfare Combined at any receive cash worked, nor

welfare at

received

but did work and

time

any time

welfare

not work welfare

during

during the

during

over the the year during the

year (%)

year (%)

year (%) year (%)

(%)

43.3

18.5

42.2

23.7

14.5

43.0

19.2

43.5

24.3

13.5

42.7

15.9

43.1

27.2

14.2

41.4

20.5

46.0

25.5

12.6

43.3

18.8

44.3

25.5

12.5

42.1

18.9

43.6

24.7

14.3

41.5

19.8

44.3

24.5

14.1

37.8

20.5

47.3

26.8

14.9

34.2

20.0

49.7

29.7

16.1

31.1

20.3

52.6

32.2

16.4

24.5

19.5

57.8

38.3

17.7

19.2

19.7

60.4

40.7

20.4

15.4

17.8

64.3

46.5

20.3

14.4

13.5

63.8

50.3

21.9

13.6

13.6

61.6

48.1

24.8

12.9

10.4

58.6

48.2

28.6

11.8

9.8

59.0

49.2

29.3

14.7

11.2

56.5

45.3

28.7

12.1

8.7

55.3

46.6

32.6

13.2

8.9

54.0

45.1

32.8

11.0

7.8

54.4

46.7

34.6

Source: Congressional Research Service (CRS) estimates based on analysis of U.S. Census Bureau

1988 to 2007 Current Population Survey (CPS) Annual Social and Economic Supplement (ASEC)

data.

r = Revised estimates based on expanded CPS sample and 2000 decennial census-derived weights.

CRS-45

Figure 8 Support Table. Effects of Earnings, Transfers, and Taxes on Family Poverty

and Household Low-Income Status on Single Mothers, 1987 to 2006

Year

1987

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2000r

2001

2002

2003

2004

2005

2006

Percent poor based on:

Preceding column +:

Preceding

Preceding column +: Family

Family

Preceding column +: Family cash welfare

column +:

EITC plus Child Tax Credit

earned

Family cash income

(“official poverty

Family food

and state refundable credits

income only other than welfare

income”)

stamps

less FICA and income taxes

53.9

46.6

44.7

42.3

41.1

53.8

45.9

43.9

42.2

41.3

52.2

43.7

41.7

39.7

39.2

53.8

46.1

43.7

41.5

39.9

55.2

47.4

45.4

42.8

41.3

55.3

47.4

45.4

42.5

40.6

56.2

47.4

45.2

42.7

40.7

53.9

45.5

42.7

39.8

36.5

51.0

42.3

40.2

36.9

32.5

49.8

41.5

39.8

37.1

32.9

50.6

41.7

40.0

37.7

32.6

47.9

38.8

37.3

35.2

29.7

43.6

35.3

34.0

32.2

27.5

40.1

32.1

30.9

29.3

24.2

40.8

32.8

31.8

30.5

25.8

41.9

33.3

32.4

30.9

26.2

42.2

32.9

32.2

30.5

25.5

42.9

34.5

33.9

32.2

28.3

44.3

35.7

34.9

32.5

28.1

44.0

35.5

34.7

32.6

27.7

44.5

35.7

35.1

32.9

27.9

Household cash income

+ food stamps + EITC + Child Tax

Credit + state refundable credits less

FICA and income taxes

38.2

37.9

35.5

36.1

37.0

36.5

36.8

32.1

29.2

29.3

28.3

26.2

23.6

20.3

21.8

22.5

22.3

24.0

23.7

23.7

23.7

Source: Congressional Research Service (CRS) estimates based on analysis of U.S. Census Bureau 1988 to 2007 Current Population Survey (CPS) Annual Social and

Economic Supplement (ASEC) data.

r = Revised estimates based on expanded CPS sample and 2000 decennial census-derived weights.

CRS-46

Figure 9 Support Table. Poverty Gap Percentiles* Based on

Cash Income Among Poor Single-Mother Families, 1987 to 2006

Year

1987

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2000r

2001

2002

2003

2004

2005

2006

Bottom 20% Bottom 40%

27.2

43.4

26.1

40.7

25.6

42.1

27.4

43.0

25.6

42.5

24.2

39.3

26.2

41.0

27.6

43.8

27.7

45.8

27.7

43.5

22.3

42.9

22.6

42.5

23.4

43.1

23.5

45.5

19.0

42.9

16.4

41.0

18.9

41.6

16.4

39.4

15.6

39.0

15.3

39.2

16.6

41.2

Median

(50th percentile)

51.1

48.1

50.9

50.0

50.5

48.0

49.0

50.7

53.3

50.5

51.3

51.5

52.8

54.8

52.6

51.7

53.0

50.6

50.0

48.8

51.4

Top 40%

60.0

57.1

58.9

58.9

58.6

56.6

56.7

58.7

60.3

58.9

60.7

60.3

62.0

66.3

61.5

62.3

63.6

61.4

60.5

57.6

61.2

Top 20%

78.2

74.9

77.1

76.1

75.2

75.1

73.6

76.3

79.7

77.7

78.6

81.2

80.1

82.9

81.2

81.9

81.9

80.1

79.3

79.3

80.0

Source: Congressional Research Service (CRS) estimates based on analysis of U.S. Census Bureau

1988 to 2007 Current Population Survey (CPS) Annual Social and Economic Supplement (ASEC)

data.

* Poor families’ cash income as a percent of families’ poverty thresholds.

r = Revised estimates based on expanded CPS sample and 2000 decennial census-derived weights.

CRS-47

Figure 10 Support Table. Poverty Gap Percentiles* Based on

Cash Income, Food Stamps, and Net Taxes Including the EITC

Among Poor Single-Mother Families, 1987 to 2006

Year

1987

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2000r

2001

2002

2003

2004

2005

2006

Bottom 20%

43.1

37.7

40.1

41.1

42.6

38.6

40.5

42.7

40.3

41.2

34.7

30.7

31.3

30.2

26.7

22.4

27.2

24.4

25.7

25.2

22.2

Bottom 40%

59.1

55.9

58.6

58.9

59.3

56.0

56.7

59.0

58.5

58.0

54.3

53.9

53.1

54.0

51.0

48.6

50.8

47.7

47.1

48.8

49.1

Median

(50th percentile)

66.1

63.8

65.4

65.1

65.6

61.9

63.4

65.1

65.2

64.0

62.8

61.5

61.6

62.6

61.0

58.9

59.5

57.7

56.2

58.0

60.1

Top 40%

72.7

71.1

72.3

71.3

72.1

68.6

69.6

71.1

71.4

70.8

70.3

68.4

70.0

70.2

69.3

68.3

67.0

67.3

65.7

66.7

68.5

Top 20%

85.4

85.0

85.4

84.8

84.8

83.0

82.6

84.3

85.0

84.3

85.0

84.6

84.8

86.8

85.1

85.4

83.4

84.9

83.5

83.3

84.1

Source: Congressional Research Service (CRS) estimates based on analysis of U.S. Census Bureau

1988 to 2007 Current Population Survey (CPS) Annual Social and Economic Supplement (ASEC)

data.

* Poor families’ cash income as a percent of families’ poverty thresholds.

r = Revised estimates based on expanded CPS sample and 2000 decennial census-derived weights.

CRS-48

Figure 11 Support Table. Bottom Income Quintile* of Single Mother Families:

Average Annual Income by Source, 1987 to 2006

(in 2006 dollars)

Year

1987

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2000r

2001

2002

2003

2004

2005

2006

Federal and

state

income

taxes and

FICA taxes

-96

-103

-86

-91

-75

-72

-72

-102

-124

-149

-127

-177

-223

-302

-241

-226

-229

-146

-157

-144

-205

AFDC,

TANF,

General

Assistance

3,315

2,942

3,095

3,283

3,229

2,809

2,954

3,075

2,779

2,467

2,201

1,744

1,432

1,177

1,109

928

890

1,083

820

832

754

Supplemental

Security

Income (SSI)

128

99

120

109

110

179

185

289

338

285

247

334

364

570

477

478

491

438

452

483

492

Food

stamps

(market

value)

2,722

2,364

2,567

2,625

2,873

2,740

2,678

2,996

2,589

2,539

2,393

2,115

1,826

1,710

1,683

1,749

1,817

1,914

2,098

2,075

2,113

Child

support and

alimony

274

253

262

224

191

240

264

303

349

389

315

266

414

618

570

543

648

552

581

541

503

Other

income

491

432

550

385

345

448

540

464

543

503

735

709

736

665

775

695

1,078

856

810

891

894

Gross

family

earnings

1,071

1,264

1,061

1,133

927

908

876

1,297

1,628

1,875

1,621

2,171

2,773

3,645

3,001

2,824

2,717

2,122

2,024

1,968

2,277

EITC

122

139

130

136

135

140

143

332

499

640

567

775

949

1,217

1,031

932

898

595

547

678

722

Refundable child

tax credit

n/a

n/a

n/a

n/a

n/a

n/a

n/a

n/a

n/a

n/a

n/a

n/a

n/a

n/a

n/a

n/a

n/a

n/a

123

3

3

Refundable state

tax credits

n/a

n/a

n/a

n/a

n/a

n/a

n/a

n/a

n/a

n/a

n/a

n/a

n/a

n/a

n/a

n/a

n/a

n/a

24

25

33

Total

income net of

taxes

8,026

7,390

7,699

7,804

7,736

7,392

7,568

8,654

8,601

8,552

7,950

7,938

8,273

9,300

8,405

7,923

8,311

7,414

7,322

7,353

7,587

Source: Congressional Research Service (CRS) estimates based on analysis of U.S. Census Bureau 1988 to 2007 Current Population Survey (CPS) Annual Social and Economic

Supplement (ASEC) data.

* Quintiles based on ranking of ratios of family cash pre-tax income relative to poverty. Taxes include federal and state income taxes and FICA taxes.

r = Revised estimates based on expanded CPS sample and 2000 decennial census-derived weights.

CRS-49

Figure 12 Support Table. Second Income Quintile* of Single Mother Families:

Average Annual Income by Source, 1987 to 2006

(in 2006 dollars)

Year

1987

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2000r

2001

2002

2003

2004

2005

2006

Federal and

state income

taxes and

FICA taxes

-346

-354

-459

-466

-386

-377

-349

-463

-653

-609

-657

-828

-997

-1,196

-1,166

-1,086

-1,082

-865

-921

-919

-1,083

AFDC,

TANF,

General

Assistance

5,142

4,918

4,571

4,500

4,431

4,029

4,155

3,445

3,017

2,574

1,955

1,455

1,096

794

739

709

580

809

619

717

477

Supplemental

Security

Income (SSI)

588

534

677

555

568

547

833

973

1,124

961

918

1,025

914

689

743

899

696

692

868

967

780

Food

stamps

(market

value)

2,021

2,019

1,748

2,123

2,223

2,136

2,133

2,004

2,050

1,727

1,518

1,270

921

753

809

857

865

1,054

1,254

1,343

1,228

Child

support and

alimony

492

433

560

560

471

625

530

702

734

751

904

659

848

1,010

1,011

1,093

1,038

1,099

1,081

954

890

Other

income

1,977

1,827

1,746

1,769

1,699

1,704

1,785

1,765

2,188

2,018

1,992

2,043

1,838

2,142

2,111

2,246

2,448

2,182

2,454

2,388

2,382

Gross

family

earnings

4,160

4,469

5,757

5,442

4,777

4,636

4,325

5,687

7,579

7,143

8,075

9,893

11,609

13,711

13,261

12,331

12,439

11,504

11,263

10,964

11,329

EITC

458

475

583

570

678

673

663

1,322

1,811

1,920

2,299

2,572

2,744

2,809

2,742

2,653

2,723

2,298

2,209

2,549

2,588

Refundable child

tax credit

n/a

n/a

n/a

n/a

n/a

n/a

n/a

n/a

n/a

n/a

n/a

n/a

n/a

n/a

n/a

n/a

n/a

n/a

438

277

280

Refundable state

tax credits

n/a

n/a

n/a

n/a

n/a

n/a

n/a

n/a

n/a

n/a

n/a

n/a

n/a

n/a

n/a

n/a

n/a

n/a

103

114

144

Total

income net of

taxes

14,857

14,320

15,184

15,052

14,462

13,973

14,095

15,434

17,851

16,485

17,005

18,089

18,973

20,713

20,250

19,720

19,708

18,772

19,368

19,354

19,017

Source: Congressional Research Service (CRS) estimates based on analysis of U.S. Census Bureau 1988 to 2007 Current Population Survey (CPS) Annual Social and Economic

Supplement (ASEC) data.

* Quintiles based on ranking of ratios of family cash pre-tax income relative to poverty. Taxes include federal and state income taxes and FICA taxes.

r = Revised estimates based on expanded CPS sample and 2000 decennial census-derived weights.