Welfare reform and child poverty: effects of maternal employment, marriage, and cohabitation

Abstract

The welfare reform debate centers on whether the best strategy to reduce poverty is to raise work participation among low-income women or to promote marriage. Using the 1992–2001 demographic supplements of the Current Population Survey, we track child poverty rates before and after passage of the 1996 Personal Responsibility and Work Opportunity Reconciliation Act. We find that increasing maternal employment accounted for roughly one-half of the decline in poverty among children living with single mothers. The largest economic benefits from increasing maternal employment were observed among African American children and those living with poorly educated mothers. Unlike the 1991–1995 period, changes in family structure over 1996–2000 were no longer giving demographic impetus to higher child poverty rates. Evidence that recent declines in nonmarital fertility have reduced child poverty rates, however, is limited. We conclude with benchmark estimates of the economic implications of marriage promotion initiatives and document post-1996 increases in children's co-residence in cohabiting couple families.