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Civic Report
No. 44 December 2004


Child Poverty and Welfare Reform: Stay the Course

About the Authors

June E. O'Neill is Wollman Professor of Economics at the Zicklin School of Business and director of the Center for the Study of Business and Government, Baruch College, CUNY. She also chairs the Board of Scientific Counselors of the National Center for Health Statistics and is a research associate of the National Bureau of Economic Research. Between 1995 and 1999, Dr. O’Neill was on leave from Baruch College, serving as director of the Congressional Budget Office (CBO) in Washington. Dr. O’Neill received a Ph.D. in economics from Columbia University. She was elected vice president of the American Economics Association in 1998. Her published research covers several areas, including wage differentials by race and gender, health insurance, budget policy, and Social Security. Her previous publications on welfare issues include Gaining Ground? Measuring the Impact of Welfare Reform on Welfare and Work and Gaining Ground, Moving Up (both with H.Anne Hill); Work and Welfare in Massachusetts: An Evaluation of the ET Program; Lessons for Welfare Reform: An Analysis of the AFDC Caseload and Past Welfare-to-Work Programs (with Dave M. O’Neill); and The Duration of Welfare Spells (with Laurie Bassi and Douglas Wolf).

Sanders Korenman is a professor in the School of Public Affairs, Baruch College, CUNY, and a research associate of the National Bureau of Economic Research. He served in the Clinton administration as Senior Economist for Labor, Welfare and Education on the Council of Economic Advisers. He was a member of the Board on Children, Youth and Families of National Academy of Sciences from 1998 to 2004, and has been a member of the full-time faculty of Princeton University’s Woodrow Wilson School of Public and International Affairs as well as the University of Minnesota’s Humphrey Institute of Public Affairs.

Acknolwedgements

The authors would like to thank Mei Liao for her expert research assistance and Eva Mattina for her help during the production of the report. The Bodman Foundation provided financial support, for which we are grateful.

 


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WHAT THE PRESS SAID:

Congressman Wally Herger cites Manhattan Institute Welfare Study
House Committee on Ways and Means Issues Statement on Welfare Study
Baruch College: Welfare Reform linked to Poverty Reduction
Seebach: Evidence for effectiveness of welfare reform strong Rocky Mountain News, 12-18-04 (reprinted in the New York Post 12/20/04)

SUMMARY:
There is now broad consensus that welfare reform worked—as demonstrated by the large declines in both welfare rolls and child poverty since 1996. However, the direct effect of welfare reform on child poverty is clouded by a number of other trends that coincided with welfare reform authorization—for instance, a sustained economic expansion. After taking into account a variety of factors that affect child poverty, this study finds that welfare reform may be responsible for as much as half of the decline in child poverty among black and Hispanic households headed by single mothers.

TABLE OF CONTENTS:

Executive Summary

About the Authors

Acknowledgments

I. Introduction

II. Methodology and Findings

III. Comparing Gains with Historical Trends

Figure 1: Percent of Persons Below the Poverty Level by age group

IV. Child Poverty: Alternative Measures Show Even More Improvement

Figure 2: Poverty Status of Children Under Age 18 Under Alternative Poverty Measures

V. Measuring the Decline in Child Poverty Across Groups

A. Differences by Race and Hispanic Origin.

Figure 3: Poverty Status of Children Under Age 18, by Race

B. Differences by Living Arrangements.

Figure 4: Poverty Status of Children Under Age 18, by Living Arrangement

C. Differences by Age of Children

Figure 5: Poverty Status of Children Under Age 18, by Age Group

VI. Changes in Parental Characteristics Affecting Poverty

A. National Trends in Family Structure

Figure 6: Long-Term Trends in the Percent of Children Living in Female Headed Households and in the Poverty Rate of Children Living in Female and Non-Female Households

Table 1. Changes in Living Arrangements of Children Under Age 18, by Race  (Percent Distribution)

B. Living Arrangements by Race and Hispanic Ethnicity

Figure 7: Percent of Children Living with Two Parents: Married, or Parent and Partner Couples, by Race

C. Living Arrangements by Age

Figure 8: Percent of Children Living With Two Parents: Married, or Parent and Partner Couples

D. Parental Employment

Table 2. Percent of Children1) Under Age 18 Living with a Currently Working Mother or Father

Table 3. Employment(1) Status of Parents/Partners, by Type of Family and by Race

E. Parental Education

Table 4. Changes in Parental Education, 1985-2002  

Table 5. Education of Resident Parents by Children’s Living Arrangement(1) and by Race

VII. Accounting for the Decline in Child Poverty

Table 6. Means of Key Variables Affecting the Proportion of Children in Poverty, All Children, by Race, 1995 and 2002

Table 7. Means of Key Variables Affecting the Proportion of Children in Poverty, Children Living with Single Mothers, by Race, 1995 and 2002

Table 8. Contribution of Key Variables to the Decline in Child Poverty Rates, Various Demographic groups, 1995 to 2002

VIII. Concluding Comments

Appendix

Table A1. Deriving the Contribution of Different Variables to the Reduction in Poverty from 1995 to 2002: ALL CHILDREN

Table A2. Deriving the Contribution of Different Variables to the Reduction in Poverty from 1995 to 2002: CHILDREN LIVING WITH SINGLE MOTHERS

Figure A1: Poverty Status of Children Under Age 18, by Race  (Based on FULL Household Income)

Figure A2: Poverty Status of Children Under Age 18, by Living Arrangement  (Based on FULL Household Income)

Figure A3: Percent on Welfare of Children Under Age 18, by Race

Endnotes


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