Economic well‐being of low‐income single‐mother families following welfare reform in the USA

Abstract

This study explored changes in net disposable income for low‐income single‐mother families before and after the 1996 welfare reform in the USA. Although many studies on welfare reform have focused on employment or total family income as a way to measure low‐income single‐mother families’ economic well‐being, little is known about their net income after expenses related to entering the workforce. This study analyzed net disposable income after tax deductions and childcare costs to provide a more accurate understanding of income changes using data from the Survey of Income and Program Participation conducted by the US Census Bureau. The results revealed that while low‐income single mothers were working more after welfare reform, their net disposable income decreased during this time because their earnings were low and offset by an increase in childcare costs and a decline in means‐tested benefits, including Temporary Assistance for Needy Families benefits.Key Practitioner Message: ● To understand effects of the 1996 welfare reform on low‐income families’ economic well‐being; ● To understand comprehensive income sources and work related expenses of low‐income families; ● To provide policy suggestions for comprehensive childcare subsidies to support low‐income single mothers’ employment.