The Changing Incidence and Severity of Poverty Spells among Female-Headed Families

Abstract

Policy reforms and labor market changes over the 1990s had a profound effect on families headed by single women. Federal welfare reform, passed in 1996, pushed many more women into the labor force, while expansions in the Earned Income Tax Credit increased their economic returns to work. A booming economy helped assure that jobs were available. Earnings and income among single mothers rose, while poverty rates declined. By 2000, the poverty rate among families headed by single women had fallen to 25 percent, far below the 33 percent rate at the start of the 1990s. While these trends are widely viewed as good news, conventional measures of income and poverty based on annual averages can be misleading. If jobs and earnings become more unstable, or public assistance less accessible, then the within-year variability in income will rise, potentially offsetting the gains in average income. Indeed, a recent study by Christopher Bollinger and James P. Ziliak (2007) suggests that income volatility has increased among single-mother families since the mid-1990s. This paper looks at the changing incidence and severity of poverty spells among adult women, focusing mainly on single mothers, between the early 1990s and the early 2000s. We are particularly concerned with differences between black and white women, since there is evidence that black women have not gained as much in the years following welfare reform (Andrew Cherlin et al. 2007). We use data from the 1990 and 2001 Surveys of Income and Program Participation (SIPP). The SIPP collects detailed monthly data on earnings and nonlabor income, enabling us to measure the incidence and duration of poverty spells at a very The Changing Incidence and Severity of Poverty Spells among Female-Headed Families