Welfare reform and lone mothers’ employment in the US

Abstract

The Personal Responsibility and Work Opportunity Reconciliation Act (PRWORA) of 1996 represents a dramatic change in the US welfare state. One of its key goals was to move lone mothers, even those with young children, from welfare to work. Early evidence suggests that, in concert with a strong economy, progress has been made - welfare caseloads have fallen dramatically and the employment rates of lone mothers have increased substantially. In addition to the federal reforms, state level welfare reforms played an important role prior to 1996 and are playing an even more important role subsequent to 1996 as PRWORA gives states unprecedented flexibility in designing and implementing their welfare systems. In this paper, we examine some key state-level reforms, using evidence from selected states, to illustrate the three major types of policies used in the US to move lone mothers from welfare to work: mandating work (Michigan); making work pay (Michigan and Minnesota); and helping families with child care (Illinois). We conclude that each of these policies has a role to play in moving lone mothers from welfare to work, but that further policies are needed if the US is to also to do a better job of reducing child poverty.