Are Parental Welfare Work Requirements Good for Disadvantaged Children? Evidence From Age-of-Youngest-Child Exemptions.

Abstract

This paper assesses the impact of welfare reform’s parental work requirements on low-income children’s cognitive and social-emotional development. The identification strategy exploits an important feature of the work requirement rules—namely, age-of youngest- child exemptions—as a source of quasi-experimental variation in first-year maternal employment. The 1996 welfare reform law empowered states to exempt adult recipients from the work requirements until the youngest child reaches a certain age. This led to substantial variation in the amount of time that mothers can remain home with a newborn child. I use this variation to estimate the impact of work-requirement induced increases in maternal employment. Using a sample of infants from the Birth cohort of the Early Childhood Longitudinal Study, the reduced form and instrumental variables estimates reveal sizable negative effects of maternal employment. An auxiliary analysis of mechanisms finds that working mothers experience an increase in depressive symptoms, and are less likely to breastfeed and read to their children. In addition, such children are exposed to nonparental child care arrangements at a younger age, and they spend more time in these settings throughout the first year of life.