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Introduction
Policymakers are now taking stock
of the nation's five years of experience with welfare reform
following the passage of the Personal Responsibility and Work
Opportunity Reconciliation Act (PRWORA). As the longer-term
effects of this profound social experiment are assessed, one
of the most important benchmarks by which the new system will
be judged is whether it is helping the children of welfare
recipients to develop into healthy, competent young adults.
Fortunately, those who will chart welfare reform's next phase
have a body of evidence to guide them. A generation of rigorous
studies launched prior to the 1996 reform legislation is now
available, and as this review makes clear, the results are
robust and compelling.
Because all of these studies began
prior to the 1996 shift from Aid to Families with Dependent
Children (AFDC) to Temporary Assistance for Needy Families
(TANF), and because they do not reflect every welfare reform
policy that states have implemented, they cannot answer the
question, "Overall, how has welfare reform affected children?"
However, the studies discussed here can answer two vitally
important questions for decision makers as they look forward:
- Which welfare reform strategies
have proven to be especially beneficial or harmful to children
and adolescents?
- How can the TANF system be adapted
to reduce the disadvantages that low-income children and
adolescents face?
Findings for Elementary School-age Children
Examining the short- and longer-term
effects on children of 12 welfare experiments aimed at increasing
the self-sufficiency of low-income parents, it is clear that
the way states design their welfare reform programs can affect
not only the economic security of parents but the well-being
of children as well. This conclusion emerges by comparing
the effects of three broad policy approaches that are currently
used in many state welfare programs. Four earnings supplement
programs were designed to make work more financially rewarding,
by providing families with monthly cash supplements or by
increasing the amount of welfare that recipients could keep
when they went to work. Six other programs, referred to here
as mandatory employment services programs, obligated welfare
recipients to participate in such activities as education,
training, and immediate job search as a condition for maintaining
their welfare eligibility. The designs of the remaining two
time-limited programs imposed state caps on how long welfare
benefits could be received. (For additional information about
the programs and results summarized here, see the references
on page 10.) All of these programs were evaluated using a
random assignment design that assigns families to program
and control groups by a lottery-like process. This research
method provides a rigorous test of the programs' effects,
or impacts, on adults and children.
To make results comparable across
studies, program impacts were examined for children who were
between approximately age 3 (preschool age) and age 9 (early
elementary school age) when the programs began and whose single
parents were receiving welfare. Initial follow-up interviews
were conducted as early as 2 years later, when these same
children would all be in elementary school and were between
approximately between age 5 and age 12. In two studies, further
interviews were conducted between 4.5 and 5 years later with
mothers of the younger children in the initial study populations.
At the time these longer-term follow-up interviews took place,
the children were all in elementary school and between age
7.5 and age 10.
Earnings Supplement Programs
All four programs that offered earnings
supplements had positive impacts on the achievement of elementary
school-age children. As Figure 1 illustrates, children whose
parents participated in these programs had significantly higher
academic achievement (as reported by parents in two of the
studies, and based on both parent reports and either test
scores or teacher reports in two others) than children whose
parents were not offered the earnings supplements. (Each bar
in the figure represents the effect, or impact, of a single
program; stars indicate that the impact is significant and
unlikely to be due to chance.)
Though small, the effects of earnings
supplements are notable, analogous to increasing children's
scores on an achievement test from the 25th to the 30th percentile.
Some of these programs also improved children's behavior and
health, although less consistently than they lifted academic
achievement. Moreover, the positive effects on children's
well-being appear to be most pronounced for children of long-term
welfare recipients.[3]
Despite the benefits shown in Figure
1, the absolute level of children's functioning remains low,
even among children whose parents participated in earnings
supplement programs. Thus, while earnings supplement programs
show promising effects, they clearly do not obviate the need
for other interventions targeted to low-income children.
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Figure 1
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Programs with earnings supplements increased school
achievement for school-age children in the short term.
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Notes: All measures are coded such that bars above the line
indicate the program had benefits to children. Statistical
significance levels are indicated as: * = 10 percent; ** =
5 percent; *** = 1 percent (two-tailed test). a Measured as
a percent of a standard deviation.
Longer-term effects
The evidence that earnings supplement
programs lead to increases in children's academic achievement
remains encouraging over the longer term.[4]
As shown in Figure 2, the academic gains have persisted in
one of the studies for four-and-a-half years - a full 18 months
beyond those registered in the follow-up interviews shown
in Figure 1 - for a subset of children who were between the
ages of 3 and 5 at the time of study entry.
The evidence that higher academic
achievement in this earnings supplement program persists is
impressive. As shown in Figure 2, the program had improved
children's scores at the time of the three-year follow-up
on a math skills test and raised their overall achievement
as reported by their parents. Although tests were not administered
at the four-and-a-half-year point, parents who were offered
the earnings supplement were less likely to report that their
children were performing below average in school and receiving
special educational services than were parents who did not
receive the supplement. However, the program did not affect
the proportion of children who had repeated a grade level
in school at either point in time (not shown in the figure).
Mandatory Employment Services Programs
Programs that required welfare recipients
to participate in employment services had few effects on elementary
school-age children, as measured by a test of children's school-readiness
skills (Figure 3). Two years after parents had enrolled in
the programs, just one of six such programs produced a positive
effect, as compared with all four programs with earnings supplements.
Distinguishing among the various mandatory programs, few effects
on children were found either among the three that required
parents to participate in job search activities or among those
that obligated parents to engage in educational activities.
In the short term, programs with mandatory employment services
also resulted in few effects across children's behavioral
and health outcomes (not shown in Figure 3); the effects found
were as likely to have been positive as negative.
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Figure 2
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Children benefit from an earnings supplement program
in both the short and long term.
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At the 3-year follow-up, the program
increased children's math test scores and their average achievement
in school. At the 4.5-year follow-up, the program reduced
the proportion of children performing below average in school
and reduced the proportion of children in special education.
At neither follow-up did the program affect the proportion
of children repeating a grade level (not shown).
Notes: Results are from the Self-Sufficiency
Project (SSP) for children between ages 3 and 5 years at study
entry. Statistical significance levels are indicated as: *
= 10 percent; ** = 5 percent; *** = 1 percent (two-tailed
test). a Measured as a percent of a standard deviation.
Longer-term effects
The most recent results show that,
even five years after the children's parents entered the programs,
mandates that increase employment but do not lift income continue
to cause neither widespread benefit nor harm to elementary
school-age children.[5] As can be seen in
Figure 3, none of the programs significantly affected children's
math or reading performance five years after parents began
their participation. With regard to other aspects of children's
well-being, effects on social behavior (not shown in the figure)
were more common, but these were sometimes positive and sometimes
negative.
These findings may be reassuring
to those concerned that requiring single mothers to go to
work would have adverse consequences for their children (although
the results discussed here occurred within a context of generous
child care funding). At the same time, there is no evidence
to indicate that children benefited when their mothers went
to work, through increases in mother's self-esteem, for example,
or as a result of changes in family routines or role modeling.
Notably, the mandatory employment
services programs examined here did not resort to full family
sanctions to enforce compliance with their requirements. Because
the programs imposed only partial grant reductions, the programs'
results cannot necessarily be extrapolated to other mandatory
programs whose more stringent rules may lead to more pronounced
income losses. Few of the studies for this brief resulted
in income loss for the average family, but some results hint
that income losses may be associated with worse outcomes for
children.[6]
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Figure 3
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Programs with mandatory employment services had few
effects on school-age children’s achievement in both
the short and long term.
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Notes: Results are from the National
Evaluation of Welfare to Work Strategies (NEWWS). All measures
are coded such that bars above the line indicate the program
had benefits to children. Statistical significance levels
are indicated as: * = 10 percent; ** = 5 percent; *** = 1
percent (two-tailed). a Measured as a percent of a standard
deviation.
Time-Limited Programs
States have set caps on how long
welfare clients can receive benefits in a variety of ways;
findings from two studies suggest that, in the right circumstances,
time limits can be implemented without causing widespread
harm for elementary school-age children.[7]
Both programs took a cautious approach to safeguard family
well-being through various program rules and supports. Studies
of both programs examined children's outcomes only shortly
after the first families reached the time limit, and no short-term
effects on children's achievement were found. One program
demonstrated positive effects on children's behavior (although
not on their health), while more limited and mixed effects
were found in the other program. Though the effects documented
in both studies were modest over the short term, it is not
possible to draw conclusions about longer-term program effects
on children.
The interaction of time limits with earnings
supplements
Are the beneficial effects observed
in programs that offer an earnings supplement also to be found
in programs that combine an earnings supplement with a time
limit? A comparison of new findings from Connecticut's Jobs
First program, which provided supplements within the context
of a 21-month time limit on benefit receipt, with findings
from the Minnesota Family Investment Program (MFIP), which
provided an earnings supplement but imposed no time limit,
suggest how the two policies may interact. In both programs,
participating families were offered earnings supplements through
the welfare system; not all of a parent's earnings were counted
in calculating the amount of welfare she could receive. For
participants in the Connecticut program, this method of delivering
the supplement meant that families whose income came from
a mix of earnings and welfare would lose the supplemental
income when they reached the welfare time limit.
The pattern of findings shown in
Figure 4 suggests that programs that add time limits to earnings
supplements may yield fewer benefits to children than programs
with earnings supplements alone. As the figure makes clear,
the Minnesota program's generous earnings supplement generated
sustained gains in income both in the early and later follow-up
period (left column) and had more pervasive effects on children,
improving both their school achievement and behavior. In the
Connecticut program, by contrast, the initial income gains
were cut short by the 21-month time limit and occurred only
in the first part of the follow-up period. Effects on children
were more limited than those seen in Minnesota (as in other
supplement programs), occurring in only one area of children's
functioning, their behavior.
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Figure 4
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A program with an earning supplement alone had
more pervasive benefits to children than one that combined
an earning supplement with a time limit.
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Effect on
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Earning
supplement/
no time limit
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Earning
supplement with time limit
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Minnesota
Family Investment
Program (MFIP)
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Connecticut’s
Jobs First
program
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Parents’ employment and income
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Employment
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+
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+
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Income
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Early
follow up income
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+
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+
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Later
follow up income
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+
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no effect
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Child well being
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Child school achievement
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+
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no effect
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Child behavior
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+
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+
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Child health
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no effect
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no effect
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This comparison of results cannot
conclusively explain why time limits and earning supplements
interact to produce fewer effects on children than an earnings
supplement alone. There are several possible explanations.
It may be that the time limit reduces benefits for children
because it cuts short any income gains that families experience
from the earnings supplement. Alternatively, the impending
time limit deadline may add to family stress, which in turn
mitigates the benefits to children. Finally, it may be that
the different effects are a result of different local conditions.
Findings for Adolescents
With concern concentrated on the
effects welfare reform was having on the well-being of elementary
school-age children, the responses of adolescents to changes
in welfare policies (and to maternal employment more generally)
have received less attention. Perhaps one reason for this
relative lack of focus on older children and teens is that
policymakers have assumed that welfare reform's new work requirements,
time limits, and supports for working parents would be likelier
to promote their successful transition into adulthood than
to derail it. In particular, as community norms change in
response to welfare reform, adolescents might be presumed
to respond positively to strong messages of responsibility
and to the presence of working parents as role models. However,
less benign possibilities lurk: Increased employment could
remove mothers from their supervisory roles and place counterproductive
demands on youth at a crucial point in their development.
For low-income adolescents - a group already at risk of poor
outcomes - the stakes are high.
To determine what effects welfare
reform programs have on adolescent outcomes, impacts were
calculated within, and then averaged across, between 10 and
16 different welfare and work programs.[8]
In each program, the adolescent children of single parents
were between approximately age 10 and age 16, and the families
of nearly all of them were receiving welfare benefits when
the parents' participation in the new programs began. At the
time of the follow-up interviews, these adolescents were between
the ages of 12 and 18.[9]
Effects of Welfare and Work Policies on Adolescents
Welfare and work policies show a
clearly different, and more troubling, pattern of effects
for adolescents than for elementary school-age children, as
evidenced particularly by negative effects found for aspects
of adolescents' progress in school, including their achievement
(Figure 5). Specifically, youth whose parents participated
in these programs were less likely to be performing above
average in school (as reported by their mothers). The proportion
of these adolescents who repeated a grade or were enrolled
in special educational services[10] was
2 percentage points, or approximately 10 percent, greater
(an effect size of 0.06 and 0.05, respectively) than that
of adolescents whose families were in the control groups,
although they were no likelier to have been suspended or to
have dropped out of school. In addition, these programs had
no effect on rates of teen childbearing - an outcome that,
along with dropping out of school, has clear implications
for young adulthood.[11]
Effects on Adolescents as They Become Young
Adults
The adverse effects of welfare and
work policies on adolescents - particularly as evidenced by
grade repetition or receipt of special educational services
- are small, but they are important enough to warrant policymakers'
attention. Welfare reform programs may not undermine participation
in school, but they do affect the academic progress of youth
who are already at considerable risk of not completing school.
What should be of great concern is whether these documented
effects on schooling may influence the ability of youth to
make successful transitions into young adulthood. Although
most of the studies do not follow the adolescents long enough
to provide conclusive answers, an investigation of a subset
of programs that had at least five years of follow-up was
used to assess effects on adolescents as they become young
adults. The available evidence shows no negative effects on
school completion at the time of young adulthood, even for
a group of adolescents who earlier in the follow-up period
had engaged in such minor delinquency as skipping school,
staying out late, and increased frequency of drinking.
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Figure 5
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Welfare and work policies for parents have small, negative
effects on some aspects of adolescent schooling.
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Welfare and work policies reduce
the proportion of adolescents performing above average in
school, increase the proportion of adolescents who have repeated
a grade and the proportion in special education, but have
no effect on the proportion of adolescents who were suspended,
dropped out from school, or had a baby.
Notes: Statistical significance levels
are indicated as: * = 10 percent; ** = 5 percent; *** = 1
percent (two-tailed).
Maternal Employment and Effects on Adolescents
Minimizing the negative effects of
future welfare reform programs on adolescent schooling requires
policymakers to understand why reform programs produced negative
effects in the first place. Because the programs were designed
to affect parents' employment, welfare use, and income, the
likeliest causes of the variations that show up in effects
for adolescents are presumed to be found in differences in
how the programs affected their parents. But the connection
between differences in programs and effects on adolescents
are not as clear-cut as the evidence suggests they have been
for younger children. For the teens, positive or negative
effects do not appear to cluster around one or another policy
approach (earnings supplement programs, say, as compared with
mandatory employment services or time limits) as they did
with the elementary school-age children. Indeed, all three
of these broad policy approaches can be associated with some
negative effects on adolescent schooling.
What the three policy approaches
share, however, is that they increased single mothers' employment
through requirements to participate in employment services,
time limits on welfare receipt, or earnings supplements. This
suggests that negative effects on adolescents can arise irrespective
of whether the single mothers' entry into employment results
from a program mandate to work or from a voluntary decision
to enter or increase employment. It further implies that negative
effects on adolescents may not be unique to welfare reform
but instead may occur for a wider range of low-income adolescents
whose single parents are taking jobs.
While increases in maternal employment
appear likely to have played a role in the negative effects
on adolescents, negative consequences did not show up in all
programs that increased employment. What might distinguish
programs with adverse consequences for adolescents from those
without?
There is evidence to suggest that
adequate child care and adolescent supervision - needs that
are generated by increased maternal employment - may play
a role. In the five programs for which data on adolescents'
after-school activities were available, it was found that
even though all boosted mothers' employment, adolescents'
participation in structured activities outside school did
not increase. Previous research has shown that supervision
and the structuring of adolescent out-of-school time can positively
affect schooling and social functioning. When parental supervision
is reduced owing to employment, neglecting to replace it could
lead to problems.
There may also be negative consequences
when adolescents are expected to take on increasingly adult
roles in their families. In all three programs where information
on this possibility is available, adverse impacts were found.
Two programs increased the likelihood that adolescents were
responsible for the care of their younger siblings, and a
third increased the likelihood that adolescents worked more
than 20 hours per week. In in-depth interviews, single mothers
of adolescents recounted in detail the extent to which they
rely on their older children to take care of the younger children
in the family. While these "adult" activities can
introduce adolescents to important responsibilities, they
could also interfere with schoolwork. Taking on adult roles
can also erode adolescents' willingness to continue accepting
the authority of adults such as parents or teachers.
Findings for Very Young Children
Very limited evidence drawn from
the two studies that assessed effects on very young children
suggests that infants and toddlers were neither harmed nor
helped by welfare reform policies. In a study of an earnings
supplement program that yielded the most extensive information
on the youngest children, no differences emerged between program
and control groups in terms of receptive language skills (that
is, the children's understanding of words as measured by a
standardized test) or how parents described their children's
health and behavior. Limited information about the long-term
effects of programs that required mothers of children of age
1 and older to participate in mandatory employment services
found no systematic negative or positive effects in terms
of their adjustment to school. Noteworthy in of both studies
was the fact that child care for children of both program
and control group parents was well funded. While these preliminary
indications are encouraging, data are not yet adequate to
draw firm conclusions about the effects of welfare reform
policies on very young children.
Implications for the TANF agenda
It is clear from the results reported
here that policies that affect families' economic circumstances
have important implications for the academic success of low-income
children and adolescents. The research findings examined in
this brief are conclusive in demonstrating that programs that
raise the incomes of working parents can improve the school
readiness and academic achievement of elementary school-age
children. Results for adolescents are troubling and do not
yet provide a clear road map to guide the investment of public
resources.
This investigation provides insights
for policymakers who are considering these important questions:
Should the goals of PRWORA
be expanded to include increasing family income or improving
children's well-being?
The results summarized underscore
the connection between increases in family income and improvements
in children's well-being. An explicit recognition that the
design of TANF and other policies directed toward parents
can affect outcomes for their children might encourage states
and localities to develop innovative methods to provide supports
to working families or to improve children's well-being. If
TANF's goals are expanded in this area, the results summarized
here do not provide guidance on whether the precise goal should
be to reduce poverty or to increase household income for a
broader group of families. While there is reason to believe
that families whose incomes place them farthest below the
poverty line would benefit most from programs that raised
their incomes, some of the benefits experienced by children
in the studies examined for this brief suggest that it may
also stem from income gains that occur above the poverty line.
Should earnings supplements
be subject to welfare time limits?
Results presented here suggest that
programs that provide generous supports for at least three
years have more positive effects on children than programs
with time-limited welfare policies that cut supports short.
There are clear tensions between the goals of time-limited
welfare policies that encourage families to leave welfare
quickly and policies with generous earnings disregards for
working families that recognize a need for ongoing financial
support.
There are two possible ways to resolve
those tensions within TANF: Suspend the time-limit clock for
those who are "playing by the rules" (such as by
working a specified minimum number of hours per week); or
provide maximum flexibility to states who want to use their
TANF funds to support working families. In particular, if
earnings supplements were not defined as "assistance"
in TANF regulations, they would not be subject to the five-year
federal time limit.
Do other supports for working
families result in the same benefits for children as earnings
supplements?
At present, there is little in the
data to help policymakers determine whether different kinds
of work supports affect children differently. Two earnings
supplement programs examined for this brief chiefly provided
monthly cash supplements, while a third program offered generous
child care subsidies and health coverage that could have benefited
children. If in-kind subsidies (which are less flexible than
cash supplements), earned income credits (typically received
as lump sum payments), or policies that help parents attain
higher wages and find better jobs increase families' economic
security in the same way that the cash supplements studied
for this brief did, these other methods to boost family income
may bring similar benefits for children.
Longer-term welfare recipients appear
to have benefited most from the work-support policies examined
for this brief, suggesting that benefits to children may be
diluted as eligibility is broadened to allow more families
to take advantage of them. But it has yet to be determined
at what specific level of family income benefits for children
may fade away. In most states, the supports available to working
families are not as generous as the supplements offered in
the programs examined for this study. Moreover, the benefits
evident in the supplement studies were produced on top of
the existing federal and state Earned Income Tax Credits and
other relatively extensive supports for working families.
Thus, in most states, there is currently scope to expand financial
supports for working families and produce benefits for children.
Can time limits be implemented
in ways that minimize harm to children?
That the two time-limited welfare
programs discussed in this brief produced few negative effects
on children does not warrant the conclusion that time limits
themselves cannot have adverse results. Both programs established
clear processes to protect family well-being by providing
services that families approaching the time limits needed
to assure adequate sources of income. Both also took steps
to identify families for whom imposition of the time limit
might lead to harm by reviewing their circumstances before
the time-limit clock expired. It is possible that, were time
limits to be implemented with fewer safeguards and to result
in income loss for families, the consequences for children
could be different.
What do the results for adolescents
imply for investments in youth development programs and child
care?
The negative effects on adolescents
reported here were small and did not show up in outcomes with
related to severe consequences as dropping out of school and
teen childbearing. Because the implications of these results
for young adult outcomes are not yet clear, it may be premature
to prescribe a nationwide response based solely on these findings.
Still, it is well known that low-income adolescents already
fare worse in school and face more problems making a successful
transition into adulthood than their higher-income peers.
Viewed in that context, any new difficulties created for this
group of young people that result from welfare reform programs
or from increases in maternal employment should be a concern
for policymakers. The most prudent course for policymakers
might be to place a priority on understanding this issue further,
by reinvigorating the search for effective community-based
programs to engage low-income youth both within and outside
the TANF system. A good place to start would be to experiment
with new approaches to engage low-income youth positively
in supervised settings after school.
Note, however, that youth development
programs will be of no benefit to adolescents who must care
for their younger siblings because of families' poor access
to child care. The results summarized here suggest that expansions
in child care programs for young children may bring important
benefits for another group of youngsters - their older adolescent
siblings.
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