Abstract
The Personal Responsibility and Work Opportunity Reconciliation Act of 1996 changed welfare programs by increasing state income maintenance programs’ emphasis on employment. Following reform, several states paid reduced welfare benefits to single mothers who resided in their parents’ homes, compared to those single mothers who lived independently. This paper evaluates whether the benefit reductions lower the probability of intergenerational cohabitation or the employment of single mothers’ recognizing that family support might facilitate single mothers’ labor market attachment. The results suggest that family cohabitation penalties reduce the likelihood single mothers live in their parents’ households and work. Despite several empirical limitations, the results offer evidence that intergenerational living arrangements positively influence employment.
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