CRS – Welfare, Work, and Poverty Status of Female-Headed Families with Children: 1987-2013. Thomas Gabe, Specialist in Social Policy, November 21, 2014

“Eighteen years have passed since repeal of what was the nation’s major cash welfare program assisting low-income families with children, the Aid to Families with Dependent Children (AFDC) program, and its replacement with a block grant of Temporary Assistance for Needy Families (TANF). This report focuses on trends in the economic well-being of female-headed families with children, the principal group affected by the replacement of AFDC with TANF. Female-headed families and their children are especially at risk of poverty, and children in such families account for well over half of all poor children in the United States. For these reasons, single female-headed families continue to be of particular concern to policymakers. The report details trends in income and poverty status of these families, prior and subsequent to enactment of the 1996 welfare reform law and other policy changes. The report focuses especially on welfare dependency and work engagement among single mothers, a major dynamic that welfare reform and accompanying policy changes have attempted to affect. It also examines the role of programs other than TANF in providing support to single female-headed families with children. CRS analysis of 27 years of U.S. Census Bureau data shows that there has been a dramatic transformation with regard to welfare, work, and poverty status of single mothers. The period has seen a marked structural change in the provision of benefits under a number of programs that contribute to the fabric of the nation’s “income safety net.” In turn, single mothers’ behavior has changed markedly over the period; more mothers are working and fewer are relying on cash welfare to support themselves and their children. In the years immediately preceding 1996 welfare reform, and in the years since, the nation’s income safety net has been transformed into one supporting work. Cash-welfare work requirements, the end of cash welfare as an open-ended entitlement by limiting the duration that individuals may receive federally funded benefits, and expanded earnings and family income supplements administered through the federal income tax system have helped to change the dynamics between work and welfare. The transformed system has helped to both reduce single mothers’ reliance on traditional cash welfare and reduce poverty among their children. Poverty under the official U.S. poverty measure, which is based on pre-tax cash income, shows that since 2000, which marked a historical low, the poverty rate among single mothers increased in step with two recessions. By 2010, the official poverty rate for single mothers had reached a post-2000 high, and remained at that level through 2012, before falling somewhat in 2013. In 2013, the official poverty level was still below pre-1996 welfare reform levels, despite two recessions since 1996. Using a more comprehensive income definition than that used by the official poverty measure indicates that the increase in poverty among single mothers and their children over the past 13 years has been substantially mitigated by Food Stamp/SNAP benefits and work-related refundable tax credits—benefits not captured by the “official” poverty measure. Use of an expanded income poverty measure that includes these benefits highlights effects of congressional action that helped reduce child poverty amidst, and subsequent to, the most severe recession since the Great Depression. The role of work-conditioned benefits, and the provision of traditional cash welfare, will likely continue to garner attention, in part contingent on the nature and pace of economic recovery, and federal and state budget pressures.”