Changes in the Consumption, Income, and Well-Being of Single Mother Headed Families

Abstract

We investigate well-being changes for single mother headed families targeted by recent tax and welfare reforms. Measured income changes sharply differ from consumption changes. We examine disaggregated consumption, time use, and health insurance coverage. Increases in housing and transportation spending mostly account for the rise in consumption in the bottom quintiles. We find modest improvement in housing quality, but the evidence is less strong at the very bottom. The consumption of nonmarket time for those in the bottom half of the consumption distribution falls sharply, indicating a loss in utility for those families if nonmarket time is valued above $3 per hour. (JEL D12, I31, I32, J12, J16)