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The Welfare of Children$

Duncan Lindsey

Print publication date: 2003

Print ISBN-13: 9780195136715

Published to Oxford Scholarship Online: April 2010

DOI: 10.1093/acprof:oso/9780195136715.001.0001

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The Fading Promise of Welfare Reform to End Child Poverty

The Fading Promise of Welfare Reform to End Child Poverty

Chapter:
(p.277) 10 The Fading Promise of Welfare Reform to End Child Poverty
Source:
The Welfare of Children
Author(s):

Duncan Lindsey

Publisher:
Oxford University Press
DOI:10.1093/acprof:oso/9780195136715.003.0011

Abstract and Keywords

This chapter examines the effects of the most important event affecting poor children in the last several decades: the welfare reform of 1996. It is now possible to examine the consequences of this reform for children. Proponents of the reform herald the dramatic drop in the welfare caseload. In most states, the number of children receiving welfare has been cut in half. Several states have achieved a more than three-quarters reduction. What has been the consequence of this dramatic end of welfare as we know it? The chapter looks at the economic circumstance of poor children post-welfare reform.

Keywords:   child welfare system, welfare reform, child poverty

In the almost seven years since the welfare reform law was enacted, economic conditions have improved dramatically for America’s poorest families. Welfare rolls have plummeted, employment of single mothers has increased dramatically, and child hunger has declined substantially. Most striking, however, has been the effect of welfare reform on child poverty, particularly among black children.

Melissa Pardue, “Sharp Reduction in Black Child Poverty Due to Welfare Reform”

[Welfare reform] will tell young mothers to be employed, away from their children for much of each week. These children, already fatherless, will now become primarily motherless. They will be raised by somebody else. A grandmother? A neighbor? An overworked day care manager? Or they will be left alone?

James Q. Wilson, The Marriage Problem

With the passage of welfare reform legislation in 1996 the major program of income support for poor children changed fundamentally. Aid to Families with Dependent Children (AFDC) had been a federally administered entitlement program that assured every child, regardless of his or her parents, a minimal level of income protection since the passage of the Social Security Act, of which it was a part, in 1936. Welfare was intended to provide a safety net of income support for single mothers and their children. Welfare was, in a sense, the social contract that guaranteed economic security for poor children who were concentrated in single parent families.

The Personal Responsibility and Work Opportunity Reconciliation Act (PRWORA), which President Clinton signed into law in August 1996, required that women with dependent children work in order to receive benefits. To promote the search for and acceptance of work the legislation replaced AFDC with a program called Temporary Assistance to Needy Families (TANF) that was, as the name implies, temporary and time limited. The culture of the old welfare office was transformed to emphasize job search, job readiness, and job training. The full effort of the new “employment offices” was directed toward placing the mothers, who had been (p.278) collecting welfare benefits while not working, into jobs (Blank, 1997; U.S. General Accounting Office, 2001).

The new TANF program was designed to push mothers into jobs and sanction mothers who did not find work. Mothers were advised that there were time limits on the receipt of welfare benefits and warned that after receiving welfare for two years they would need to be employed or in a job program to continue receiving benefits. Further, recipients were advised that they had a lifetime limit of five years—after which they would no longer receive welfare, no matter what. This was a new social contract with the poor mother but one that apparently represented the consensus of the nation. The public had come to the view that it was not acceptable for able bodied adults to receive income assistance without working. Thus, single mothers with dependent children, even preschool children and infants, were expected to find work and earn income.

The Consequences of Welfare Reform: Substantial Reduction of the Welfare Caseload

It is now possible to assess the results of the 1996 welfare reform legislation. Without question, welfare reform resulted in a dramatic reduction in the number of welfare recipients (Figure 10.1).

The Fading Promise of Welfare Reform to End Child Poverty

Figure 10.1 Welfare Recipients, 1936–2002

Source: Administration for Children and Families (2002).

(p.279) The national picture displayed in Figure 10.1 suggests a broad decline in the welfare caseload. But this is a misleading picture. The decline was uneven among the states, varying from 6 to 94 percent between 1996 to 2002 (see Table 10.1).1 Thus, it is misleading to use national welfare data. Welfare reform led to the states having primary authority and control over the welfare program. Each state developed its own version of welfare reform which led to substantial variation among the states. Consequently, to understand welfare reform requires examination of state-level data.

Table 10.1 Percentage Reduction in the Number of Children and Adults Receiving Welfare, 1996–2002

 

Children Receiving Welfare

Total Recipients

 

Children Receiving Welfare

Total Recipients

Wyoming

−93.7%

−93.6%

Kentucky

−54.5%

−55.6%

Idaho

−89.9%

−89.6%

Maine

−54.1%

−53.4%

Florida

−77.0%

−78.0%

Texas

−53.2%

−51.6%

Illinois

−76.5%

−79.6%

Arkansas

−52.1%

−52.3%

Wisconsin

−76.1%

−73.4%

Alaska

−51.7%

−51.3%

Louisiana

−73.1%

−74.2%

New Mexico

−51.5%

−53.2%

Colorado

−69.0%

−68.0%

Utah

−51.2%

−50.5%

Mississippi

−68.3%

−68.7%

Montana

−50.5%

−47.3%

Oklahoma

−66.7%

−64.8%

Hawaii

−50.3%

−54.2%

N. Carolina

−66.2%

−67.2%

Washington

−47.7%

−49.8%

Maryland

−65.7%

−67.9%

Missouri

−47.5%

−48.8%

Ohio

−65.6%

−65.0%

Kansas

−47.0%

−47.7%

Connecticut

−65.2%

−67.2%

Vermont

−47.0%

−47.0%

Georgia

−64.0%

−63.6%

Delaware

−46.7%

−47.1%

New Jersey

−63.7%

−64.4%

Minnesota

−44.7%

−44.7%

New York

−62.8%

−65.2%

New Hampshire

−41.1%

−40.1%

Pennsylvania

−60.5%

−61.3%

Iowa

−39.9%

−40.1%

S. Carolina

−60.2%

−57.3%

Arizona

−38.8%

−45.0%

Michigan

−59.6%

−61.7%

Tennessee

−38.4%

−36.7%

Virginia

−59.2%

−58.5%

Dist. of Col.

−37.8%

−39.9%

South Dakota

−59.2%

−59.4%

North Dakota

−37.5%

−37.7%

Massachusetts

−56.5%

−54.4%

Nebraska

−35.2%

−35.5%

West Virginia

−56.5%

−56.2%

Rhode Island

−33.3%

−33.3%

Oregon

−55.8%

−52.9%

Nevada

−32.5%

−26.4%

Alabama

−55.6%

−59.4%

Indiana

−3.7%

−6.2%

California

−55.3%

−55.8%

 

 

 

Source: Administration for Children and Families (2002)

(p.280) During the early debate, proponents of reform, including then President Clinton, suggested that welfare reform would lead to as many as 1 million fewer recipients by the year 2000. In fact, the targets have been far exceeded—more than 7 million taken off the rolls. In most states the number of welfare recipients has been reduced by at least half (Lindsey and Martin, 2003). Several states have seen reductions of greater than three-quarters.

It is difficult to summarize the results in all fifty states because of considerable variation. In presenting the decline in welfare caseloads I ranked the states according to their reduction of welfare rolls from 1993 to December 2001 (which I have treated as 2002) and then selected among them with respect to the size of caseload reduction—the top five, the middle five, and the bottom five. I then graphed the changes. Figures 10.2 and 10.3 depict the small to medium-size states and the large states respectively.

The Fading Promise of Welfare Reform to End Child Poverty

Figure 10.2 Changes in Welfare Recipients in Small and Medium-Size States

Source: Administration for Children and Families (2002).

(p.281)

The Fading Promise of Welfare Reform to End Child Poverty

Figure 10.3 Changes in Welfare Recipients in Large States

Source: Administration for Children and Families (2002).

What is apparent from these figures is that the dramatic reduction in the welfare caseload was concentrated in the period immediately following the passage of welfare reform. The consequence of welfare reform legislation has been the rapid removal of single mothers and their children from the welfare caseload. Instead of terming the welfare legislation as “reform,” it might more accurately have been termed the selective ending of income protection for poor children.

As seen in Figure 10.2, the number of welfare recipients has declined precipitously.2 In Louisiana, the number of recipients declined from more than 260,000 in 1993 to fewer than 64,000 in 2002. In Wisconsin, the number of welfare recipients declined from more than 240,000 in 1993 to (p.282) about 44,000 in 2002. In a few states, like Indiana and Nevada, the decline was negligible.

Figure 10.3 shows the decline of welfare recipients in the large states. In Florida, the number of recipients declined from more than 700,000 in 1993 to about 130,000 in 2002. In Illinois, the number has declined from more than 680,000 in 1993 to about 155,000 in 2002.

Welfare Reform Hailed as Success

Rector and Fagan (2001: 1) report, “Overall poverty, child poverty and black child poverty have all dropped substantially…. there are 4.2 million fewer people living in poverty today than there were in 1996, according to the most common Census Bureau figures. Some 2.3 million fewer children live in poverty today than in 1996.”

Rector and Fagan (2001) continue, “Decreases in poverty have been greatest among black children. In fact, today the poverty rate for black children is at the lowest point in U.S. history. There are 1.1 million fewer black children in poverty today than there were in the mid-1990s. Hunger among children has been almost cut in half. According to the U.S. Department of Agriculture, there are nearly 2 million fewer hungry children today than at the time welfare reform was enacted. Welfare caseloads have been cut nearly in half and employment of the most disadvantaged single mothers has increased from 50 percent to 100 percent” (p. 1).

Jay Hein (2001) of the Hudson Institute exults, “Indeed, the success of TANF has exceeded even the brightest of reform’s optimists. All the important social indicators are pointing in the right direction: welfare rolls are down; employment is up; teen pregnancy is down; and wages are up. And while overall welfare spending is down, the spending per hard-to-serve family is up.”

The Evidence of Change

In 1996, there were 8,671,000 children receiving welfare. By 2002 the number of children receiving welfare had been reduced to 3,916,000.3 Did these children exit welfare because the situation of their mothers had improved (p.283) to the point where they no longer required income assistance? It is instructive to examine the indicators of success cited by those who have proclaimed the achievements of welfare reform.

Besides the reduced number of poor children receiving welfare, probably the most cited indicator of success of reform is the decline in child poverty (Pardue, 2003). According to the Census Bureau child poverty has declined since the enactment of welfare reform in 1996 (Figure 10.4). The Census Bureau (2001) reported that in 1996 the overall child poverty rate in the United States was 20.5 percent which declined to 15.9 percent by the year 2000. Specifically, as shown in Figure 10.4, child poverty rates for African American children began declining in 1993 and continued to decline after the passage of welfare reform in 1996.

Child poverty for Hispanic children also began a decline in 1996 which continued through 2000 (Census Bureau, 2001). As cited by Rector and Fagan (2001), the child poverty rate for African American children is at a historic low. Is this historic reduction in child poverty largely the result of welfare reform, as Rector and Fagan assert? If so, we would expect to see the greatest declines in child poverty in the states with the largest reductions in welfare caseloads. The most instructive data is the state variations that take into account the differential impact of welfare reform.

The Fading Promise of Welfare Reform to End Child Poverty

Figure 10.4 Child Poverty Rates in the United States, 1990 to 2000

Source: U.S. Census Bureau (2002).

(p.284) Figure 10.5 displays the changes in child poverty in the five states with the greatest reductions in their welfare caseloads. Two of the states with the greatest decreases in child poverty are Mississippi and Louisiana, which have a large percentage of Black children living in poverty.

Although the poverty rate initially declined for these two states, in recent years it appears to have turned up again, even though the number of welfare recipients has continued to decline. For Florida and Wisconsin, the two states with the greatest reductions in welfare caseloads, the poverty rate has fluctuated and headed down.

If children were being removed from the welfare caseload because of declining poverty we would expect that the number of children removed from poverty in each state would correspond to the decline in the number of children removed from welfare. Figure 10.6 displays the percentage of children removed from poverty (Census estimates) and the welfare caseload from 1996 to 2001. In states with the greatest reduction in the percentage of children receiving welfare there is a decrease in child poverty, but it does not correspond with the decline that would have been expected based on the decline in child poverty rates. Between two-thirds and four-fifths of the children removed from the welfare caseload are estimated to remain in poverty.

The Fading Promise of Welfare Reform to End Child Poverty

Figure 10.5 Child Poverty in States with the Greatest Decreases in Welfare Recipients

Source: Census Bureau (2001).

(p.285)

The Fading Promise of Welfare Reform to End Child Poverty

Figure 10.6 The Number of Children Removed from Welfare Compared to the Number of Children Removed from Poverty, from 1996 to 2001

Source: U.S. Census Bureau (2001).

Wyoming and Idaho reduced the number of children on welfare by more than 90 percent. Yet, the child poverty rate in these two states was reduced by less than 15 percent. These are small western states that might be considered exceptional. Examining child poverty in 2001 Edelman (2002) reports “Mississippi had the worst showing (with 27 percent of its children in poverty), followed by Louisiana (26.6 percent).”

In Florida more than 75 percent of children were removed from welfare even though less than 25 percent were removed from poverty. Wisconsin removed many children who remain living in poverty. Mississippi and Louisiana were among the top states in terms of reducing the percentage of children receiving welfare. Yet both these states are also among the top fifty states in terms of child poverty.

(p.286) A Spearman rank order correlation between the reduction of children receiving welfare and the reduction in child poverty in the fifty states between 1996 and 2001 resulted in a rank order correlation of. 03, which was not statistically significant, which means that for the fifty states there is no measurable relation between reductions in child poverty and reductions in welfare caseloads. In short, any reduction in child poverty is independent, and thus not likely the result, of reductions in welfare caseloads.

Foster Care and Reduction in the Welfare Caseload

As we observed in chapter six, there has been a long term relation between poverty and foster care. One would expect that with the decline in poverty (and welfare) that there would be a decline in the number of children removed from their mothers and placed in foster care. Historically welfare has been viewed as a “family preservation” strategy. Providing single mothers with supplemental income (welfare) prevented the removal of children from their custody and placement in foster care. In Florida, after moving hundreds of thousands of children off of the welfare caseload there was a rapid rise in the number of children in foster care (see Figure 10.7).

The Fading Promise of Welfare Reform to End Child Poverty

Figure 10.7 Children in Foster Care in Florida

Source: Green Book (2000).

Online at: www.childwelfare.com/kids/States/Profiles/Florida/FosterCareRC/Ofoster.htm.

(p.287) Instead of a decline in the foster care caseload, which might be expected to accompany a decline in the welfare caseload, Florida experienced an unprecedented increase in the number of children removed from their families and placed in foster care (see Figure 10.7). Kids Count of Florida (2002) reported that “child poverty rates reflect a sad reality for young parents who, despite working full-time, may not earn enough to provide basic health, housing and care for their children. While Florida ranks 36th in child poverty, we rank 20th in overall state per capita income. More than one-of-five Florida children—over 730,000—live in poverty households. There’s no greater gap in America between the wealth of a state and the poverty of its children.” Botsko, Snyder, and Leos-Urbel (2001: 17) of the Urban Institute reported that, “Many families receiving services from child welfare agencies also receive welfare assistance. These dual-system families may face competing demands. They must meet the new requirements imposed on welfare recipients in order to receive assistance, and at the same time they must meet case plan goals developed by child welfare agencies in order to keep their children or have their children returned to them. Despite the overlap in populations, historically there has been little formal collaboration between child welfare and welfare agencies in Florida.”4

Wisconsin also experienced a sharp increase in the number of children placed in foster care. In Milwaukee, the state’s largest urban center, foster care rose rapidly during the period of welfare reform. The number of children in foster care increased from 3,065 in 1990 to 5,712 in 1999 (Courtney and Dworsky, 2001).5

The foster care data in Florida, Wisconsin and Illinois (see Table 10.2) suggest that many single mothers in these states that achieved the greatest reductions in the welfare caseload had an increasingly difficult time after welfare reform which led to their children being removed and placed in foster care. Although there was a nationwide increase in the foster care population, it was not as large as the increase in Wisconsin, Florida and Illinois (see Table 10.2).6

(p.288)

Table 10.2 Changes in the Foster Care Population, 1990–1998

 

1990

1992

1994

1996

1998

Florida

10,813

9,928

9,284

24,129

24,202

Illinois

20,753

29,542

41,161

54,540

48,943

Wisconsin

6,316

6,812

8,185

8,424

9,232

Nationwide

400,000

427,000

468,000

507,000

560,000

Decline of Poverty for Single Working Mothers

The target of welfare reform was single mothers who had come to rely on welfare rather than work to support themselves and their children (Chase-Lansdale, Coley, Lohman, and Pittman, 2003). In this regard, the success of welfare reform can be assessed by the extent to which it led to a reduction in poverty among single working mothers. Porter and Dupree (2001) examined the poverty rate of single working mothers as a result of welfare reform. As seen in Table 10.3, there has been a small decline in poverty among this group most directly affected by welfare reform.

Porter and Dupree observe that the decline in poverty rates for these mothers during a period of economic expansion was less than experienced by comparable groups. Most children living in poverty reside in households that are not affected by welfare reform—they are minimum or low-wage working families with children that have incomes below the poverty line. During the period of economic expansion from 1996 to 2000, these “people in other working families with children” who were poor declined from 6.97 to 6.22 million, while “people in working single mother families” increased from 4.13 to 4.2 million.7 It was the latter group that was most impacted by welfare reform and whose numbers did not decline.

The Fate of Those Who Left Welfare

Data from the Administration for Children and Families (2001) suggest that as a result of welfare reform an increasing percentage of single mothers, especially those with young children (under six), have entered the labor market (see Table 10.3). Studies of those who left welfare suggest that about half left because they found work (Acs and Loprest, 2001).

(p.289)

Table 10.3 Poverty Among Working Single Mother Families

 

1996

1997

1998

1999

People in working single mother families

 

 

 

 

Number of poor (in millions)

4.13

4.3

4.21

4.2

Poverty rate (percent)

20.4%

21.1%

19.6%

19.4%

People in other working families with children

 

 

 

 

Number of poor (in millions)

6.97

6.49

6.29

6.22

Poverty rate (percent)

6.1%

5.6%

5.5%

5.3%

Source: Porter and Dupree (2001).

In fiscal year 2000, employment accounted for 19.7 percent of the reasons for those leaving welfare (Administration for Children and Families, 2002b).8 Moffett and Winder (2003) suggest “the income gain from leaving is modest, on the order of 11 to 18 percent,” in part because of the loss of benefits “cancel out earning gains.”

The data in Table 10.4 indicate the changing employment status of married and single mothers with income under 200 percent of the poverty line. This is the group of lower income women who would be most likely impacted by the welfare reform legislation (Mincy and Dupree, 2001). Note that between 1996 and 2000, the percentage of single mothers with children under six who were employed increased from 44.4 to 58.5 percent, the largest increase for any group. Many of these single mothers who became employed were likely in earlier times to have relied on welfare.

If we look at the percentage change column of this table, we see that while the percentage of employed single mothers with older children (under eighteen) has not changed as much as for mothers with the youngest children (under six), it has increased substantially. As highlighted by James Q. Wilson (2002), the results of welfare reform have been to separate poor single mothers from their young children so that they could work in low paying jobs. In contrast, married mothers with children do not seem to have been impacted as much as single mothers, although even among this group there has been an increase.

(p.290)

Table 10.4 Employment Status of Single and Married Mothers, 1990–2000

 

1990

1994

1996

1998

1999

2000

Change

Married Mothers

 

 

 

 

 

 

 

Under 200% of Poverty

 

 

 

 

 

 

96-00

-with children under 6

 

 

 

 

 

 

 

employed

38.36

38.5

39.0

41.2

39.3

42.3

3.2

unemployed

4.24

5.9

4.2

5.2

3.9

3.9

0.3

not in labor force

57.23

55.4

56.7

53.5

56.6

53.7

3.2

-with children under 18

 

 

 

 

 

 

 

employed

42.6

43.7

44.4

44.5

43.4

46.2

1.8

unemployed

4.6

5.6

4.3

5.4

3.9

4.1

−0.2

not in labor force

52.7

50.5

51.3

50.0

52.6

49.6

−1.7

Single Mothers

 

 

 

 

 

 

 

Under 200% of Poverty

 

 

 

 

 

 

 

-with children under 6

 

 

 

 

 

 

 

employed

38.34

39.4

44.4

51.1

54.6

58.5

14.0

unemployed

9.53

10.6

9.6

11.0

9.5

8.0

−1.5

not in labor force

52.11

50.0

46.0

37.8

35.9

33.5

−12.5

-with children under 18

 

 

 

 

 

 

 

employed

46.3

46.1

51.1

56.6

59.0

60.8

9.7

unemployed

9.5

10.0

8.6

9.3

7.9

7.4

−1.1

not in labor force

44.3

43.8

40.4

34.1

33.1

31.8

−8.5

Source: Administration for Children and Families (2001).

In analyzing census data, the Brookings Institution (2002) found that the incomes of female heads of households with children have increased slightly since welfare reform, yet many still remain well below the poverty line (Figure 10.8a). The data in Figure 10.8a indicates that children in the bottom fifth (in income) of female-headed families remain in poverty despite an increase in earnings for the mothers between 1995 and 2000. The overall income of these families improved slightly during this period.

The largest income gains occurred for the second fifth (in income) of female-headed families. In 2000, earnings for these mothers increased from $6,898 in 1995 to $11,710 (Figure 10.8b). As a result means-tested income declined from $5,678 to $2,636 during the same period. Although average earnings increased $4,812 during the period, the net income gain for these mothers was $2,155 as a result of losing welfare benefits (a net effective tax rate over 55 percent).

(p.291)

The Fading Promise of Welfare Reform to End Child Poverty

Figure 10.8a Family Income for Female Heads of Households with Children (Bottom Fifth), 1995-2000 (In constant 2000 dollars)

The Fading Promise of Welfare Reform to End Child Poverty

Figure 10.8b Family Income for Female Heads with Children (Second Fifth), 1995–2000 (In constant 2000 dollars)

Source: The Brookings Welfare Reform and Beyond Initiative (2002).

*Other includes taxes that were not shown in original.

Available online at www.brook.edu/wrb/resources/facts/pres_200207.htm

(p.292) Many of the mothers and their children, who left welfare without work, have continued to receive government assistance, including Food Stamps and Medicaid. Moffitt (2000) found that “while incomes of single mothers as a whole have risen, incomes of women leaving welfare are only slightly above what they were when the women were on welfare.”

Overall, there are several difficulties in assessing the economic impact of welfare reform on children. Once a family leaves welfare, systematic data is no longer collected by the agency. Program data indicate that at the time they left welfare, less than a quarter did so as a result of a job (see footnote8, this chapter). There have been a number of “leaver” studies that indicate what happens to former welfare recipients after they leave welfare (Acs and Loprest, 2002; Cancian et al., 2002). The results of these studies indicate that about half (54 percent) worked in the fourth quarter after leaving welfare (Acs and Loprest, 2002: table 14.2). The studies report median monthly income of former recipients ranging between $800 and $1,400 for those working. The eleven studies reviewed by Acs and Loprest report a wide range of results that make assessment difficult. In particular, these studies focus on the employment characteristics of leavers but provide limited information on the situation of the children in these families.

Precision of State Child Poverty Rates

One of the major limitations of state child poverty rates is the imprecision of such measures, which are based on samples derived from the Census Bureau’s Current Population Survey (CPS). Although such data are useful as a rough measure of the economic condition of children in a state, they are less useful in measuring the change of child poverty within a state. As a result, the error terms for these estimates of child poverty are quite high. The estimates of child poverty at the state level derived from census data need to be understood as, at best, rough estimates. For example, the data in Table 10.5 estimates 791,789 children in Florida live below the poverty line. However, this is an estimate that could range between 725,207 and 867,770.9 Yet even this wide range is an estimate with a 90 percent confidence level.

The 90 percent confidence interval for the “rate of child poverty” in Florida is estimated to be between 20 and 23.7 percent.

(p.293)

Table 10.5 State Estimates for Children Under 18 in Poverty for, 1998

 

90% Number

Confidence Interval

90% Rate

Confidence Interval

Florida

791,489

725,207 to 857,770

21.9

20.0 to 23.7

Illinois

498,804

436,158 to 561,449

15.4

13.5 to 17.4

Louisiana

312,008

280,811 to 343,204

25.7

23.2 to 28.3

Mississippi

184,010

163,118 to 204,902

23.9

21.2 to 26.6

Wisconsin

188,461

154,689 to 222,233

13.6

11.1 to 16.0

Source: Census Bureau (2000). Online at www.census.gov/hhes/www/poverty.html.

Note: The 1998 estimates are based on the March 1999 Current Population Survey.

Even for Wisconsin, which is a smaller state, the estimate of the “rate of child poverty” ranges between 11.1 and 16 percent.10 In Wisconsin the change in the estimate of the “rate of child poverty” between 1996 and 2000 is about 3 percent. However, this estimate of the “rate of child poverty” varies by almost five percent. In other words, because of the imprecision of the Census data, it is not possible to use it to determine if there has been a statistically significant change in child poverty in Wisconsin.11

In summary, efforts to assess the impact of welfare reform on child poverty require state-level data. However, the available state-level census data are too imprecise to determine if there has been a change in child poverty at the state level. None of the observed changes in child poverty within the states examined here are large enough to be statistically significant. To assess changes in child poverty will require larger sample sizes at the state level. As we will see later, this data is available, at least indirectly, and will allow us to examine the question about declines in child poverty more reliably.

Current Population Surveys conducted by the Census Bureau collect information on a broad array of topics, of which child poverty is only one. Usually the surveys gather limited information related to child poverty. In this regard, administrative data collected by other federal agencies may provide more accurate data on child poverty, especially if the information (p.294) is primarily focused on income. Taking into account the limitations of available administrative data and census data, the question then arises, where might we find more reliable data on the situation of children who have left welfare?

Are There Better Measures to Assess the Impact of Welfare Reform?

Food Stamp Data

Historically there has been considerable overlap between recipients who receive welfare and those who receive food stamps. Most individuals who receive welfare have, historically, also received food stamps. Both programs are “means tested” and provided to individuals who demonstrate need. Food stamp officials collect extensive income data on clients to determine eligibility. Although some states administer food stamps and welfare from the same welfare office, eligibility for food stamps is independent of welfare eligibility and conforms to a uniform national standard.

Although the welfare reform legislation ended the entitlement to welfare, it did not alter the entitlement status of food stamps.12 For an able-bodied adult without children, food stamps were awarded with a three month time limit, within which the recipient was required to have found work. Other than this provision, the fundamental components of the Food Stamp program were not altered by welfare reform.

Determination of food stamp eligibility is made at the state level by state agencies operating within the uniform guidelines established by the federal government. The amount of assistance is determined by federal regulations. If a mother with two children has a net monthly income, as defined by the food stamp program rules, of less than $1,220 (in 2002), then the family will be eligible for food stamps. The amount of the food stamp benefit will be determined by the net income below this amount, with a maximum amount of $356 a month. This rule applies in each state.

Changes in the food stamp caseload should, to a large degree, mirror change in the welfare caseload. That is, as welfare caseloads decline, we would expect to see a parallel decline in the number of food stamp recipients, keeping in mind that food stamps might still be provided to some welfare recipients even after they exit the welfare program. The decline should not necessarily be matched and equivalent. Many recipients who (p.295) leave welfare because of work are often employed at low paying jobs that leave them eligible for continued food stamp assistance. The data in Figure 10.9 display the number of children receiving food stamps and welfare in the United States.

Note that the receipt of food stamps and welfare paralleled each other up until the passage of welfare reform. After passage there was a decline in the number of children receiving food stamps until 2000, when the number turned up. However, the decline has been much steeper for those receiving welfare. Moreover, from 1994 to 2000 the percentage of children in poverty receiving food stamps declined from 94 percent to 75 percent (a roughly one-quarter drop), while the decline for children in poverty receiving welfare has declined from 63 percent to 34 percent (a roughly one-half drop) (see Lindsey and Martin, 2003).

The Fading Promise of Welfare Reform to End Child Poverty

Figure 10.9 Children Receiving Food Stamps and Welfare

Source: aspe.hhs.gov/hsp/indicators02/appa-fsp.htm#Food. Online at aspe.hhs.gov/hsp/indicators02/appa-FS.pdf.

*Estimate.

(p.296) In 2003 less than a third of children living in poverty received welfare benefits. For most poor children in 1996 welfare reform did not lead to an end in poverty, rather, it led to the termination of welfare benefits.

In brief, until welfare reform participation rates in the welfare and food stamp caseload paralleled each other. After welfare reform both the welfare and food stamp caseloads declined, but they no longer paralleled each other. The food stamp program continued to provide for most poor children, while the welfare program systematically terminated services to poor children. Why did poor children continue to receive food stamps while they were taken off welfare? There is little evidence that an improved economic circumstance for poor children provides the explanation.

Food Stamp Benefits

It may be that many of those who left welfare were caught in the narrow band of low-wage workers who have enough earnings so that they no longer qualify for welfare but not enough so that they lost their eligibility for food stamps. To study this issue it is instructive to examine the average food stamp benefit. If the families who left welfare improved their income situation but not enough to lose eligibility for food stamps then we would expect that the “average food stamp benefit” to reflect this improved income by declining.13

The data in Table 10.6 display the average food stamp benefit since 1997 (the figures are not adjusted for inflation). The data indicate that rather than declining, the “average food stamp benefit” has increased, indicating that the overall economic situation of beneficiaries has not improved.

Table 10.6 Average Monthly Benefit per Person for the Food Stamp Program

 

FY 1997

FY 1998

FY 1999

FY 2000

FY 2001

FY 2002

Florida

74.21

71.12

72.59

73.00

72.39

74.31

Illinois

76.28

76.22

77.95

83.08

81.80

86.81

Louisiana

74.19

72.49

74.68

74.71

77.59

83.14

Mississippi

65.41

64.41

67.04

68.30

71.18

76.43

Wisconsin

56.88

56.21

56.62

55.61

58.88

62.69

U.S. Average

71.27

71.12

72.21

72.78

74.76

79.62

Source: U.S. Department of Agriculture, Food and Nutrition Service (2003).

(p.297) Decline in Food Stamps Varies by State

Although welfare reform put states in charge of designing and administering their welfare program, food stamps remained a federal program that was administered by the states. The result has been considerable variation in the change in caseloads for both welfare and food stamps at the state level. Just as welfare caseloads have fallen in the states, so has the food stamp caseload declined, but far less dramatically. To understand what happened to Food Stamp recipients requires examining the change in caseloads at the state level. In fact, by examining the change in food stamps and welfare caseloads at the state level provides the clearest picture of the impact of welfare reform.14

For example, in Wisconsin, the number of welfare recipients was reduced by more than 80 percent, from 241,098 in 1993 to 45,231 in 2002. During the same period, the number of food stamp recipients was reduced by less than 25 percent, from 337,317 to 263,310 (Figure 10.10).15 In 1993, roughly 70 percent of food stamp recipients in that state received welfare (AFDC). By 2002, about 17 percent of food stamp recipients also received welfare (TANF). Why such a dramatic difference? By 2003, the number of food stamp recipients exceeded the number before welfare reform in 1996. While the numbers of food stamp recipients were exceeding their pre-welfare reform levels, the welfare caseload has remained at less than half their pre 1996 levels.

The data suggest the possibility that children have been taken off the welfare caseload, while remaining on food stamps because states have been able to remove impoverished children with impunity since the welfare program is no longer an entitlement.

Why the sharp reductions in the proportion of food stamp recipients receiving welfare? This divergence in assistance programs used by the poor was not replicated in every state. However, a similar divergence was found in most of the states, especially those with the largest declines in their welfare caseloads.

In 2000, Florida had the highest percentage of food stamp recipients who were elderly (18.5 percent). Children represented 46.4 percent of Florida’s food stamp recipients.

(p.298)

The Fading Promise of Welfare Reform to End Child Poverty

Figure 10.10 Comparison of Food Stamp and Welfare Recipient Declines in Wisconsin

Source: www.childwelfare.com (state Welfare Report Card, slide 6).

Following reform, the welfare caseload was reduced by more than 80 percent, from more than 700,000 in 1993 to less than 130,000 in 2002 (see Figure 10.11). Yet, during this same period food stamp recipients fell only about 35 percent, from about 1.5 million to about 950,000 in 2002. In 1993, almost half (47 percent) of food stamp recipients in Florida also received welfare (AFDC) benefits. By 2002, about 13 percent of food stamp recipients in Florida also received welfare (TANF). Again, why the divergence in decline for these overlapping programs?

In Illinois, the divergence between declines in welfare (AFDC/TANF) and food stamps was again repeated. The number of welfare recipients was reduced by 80 percent, from 663,212 in 1996 to 133,708 in 2002, while the number of food stamp recipients was reduced by 20 percent, from 1.11 million to. 89 million (and. 96 million in April of 2003). During the last two years (2001 and 2002) the number of food stamp recipients began to turn up, while the number of welfare recipients continued to decline (Figure 10.11).

The divergence between welfare recipients and food stamp recipients was also mirrored in Louisiana and Mississippi (Figure 10.11).

The Fading Promise of Welfare Reform to End Child Poverty

Figure 10.11 Comparison of Food Stamp and Welfare Recipient Declines

Source: www.childwelfare.com (state Welfare Report Card, slide 6).

(p.299) Overall, in the five states with the largest welfare declines there was a consistent divergence in the decline in welfare caseloads relative to the decline in Food Stamp recipients. Why did this happen, since both programs address the problem of child poverty?

Children as Recipients

While the previous figures have considered all welfare and food stamp recipients, our focus now turns to the child recipients in these programs. We would expect that as the number of children receiving welfare declined, there would be a similar decline in the number of child food stamp recipients. Food stamp data on household income suggests that the overall income of recipients has not increased but has remained about the same (see Table 10.6). This is reflected in the fact that the average benefit amount has gone up slightly more than would be expected by inflation, indicating that the income of recipients has remained about the same or declined (see Table 10.6). Since the amount of the food stamp benefit is determined based on the recipient’s income, as income declines, the amount of the benefit is increased.

(p.300) As we have mentioned, administrative data from the food stamp program provide an independent measure of the economic situation of poor children. Eligibility for the food stamp program is strictly enforced and has been developed and tested over several decades. Although state agencies administer the food stamp program and monitor eligibility, the criteria used for determining eligibility are established at the federal level. Further, the food stamp program has remained an entitlement. In a sense, the food stamp program provides an independent measure of the economic condition of recipients.

The advantage of the food stamp administrative data is that they are based on a national standard that is consistently applied across the different states. Food stamp eligibility is subject to federal audits to ensure reliability and are therefore likely to be the more reliable indicators of economic change than the welfare caseload counts from the states.

The data in Table 10.7 indicates that the states with dramatic reductions of children receiving welfare did not have similar declines in the number of children receiving food stamps.

Table 10.7 Child Recipients of Welfare and Food Stamps, 1993 and 2002

 

1993

2002 Actual

2002 Predicted

Difference

 Florida

 

 

 

 

Children on welfare

481,314

101,431

316,135

214,704

Children on food stamps

695,933

457,100

457,100

 

Welfare / FSP

69%

22%

69%

 

Illinois

 

 

 

 

Children on welfare

469,971

142,934

354,538

211,604

Children on food stamps

589,744

443,172

443,172

 

Welfare / FSP

80%

32%

80%

 

Louisiana

 

 

 

 

Children on welfare

188,110

51,914

141,407

89,493

Children on food stamps

415,848

314,237

314,237

 

Welfare/FSP

45%

17%

45%

 

Mississippi

 

 

 

 

Children on welfare

125,558

27,736

75,327

47,591

Children on food stamps

282,944

171,197

171,197

 

Welfare / FSP

44%

16%

44%

 

Wisconsin

 

 

 

 

Children on welfare

139,216

33,817

108,463

74,646

Children on food stamps

182,826

142,714

142,714

 

Welfare / FSP

76%

24%

76%

 

US Average

 

 

 

 

Children on welfare

9,382,234

3,916,000

6,615,638

2,699,638

Children on food stamps

13,871,937

9,728,879

9,728,879

 

Welfare / FSP

68%

40%

68%

 

Source: www.childwelfare.com (state Welfare Report Card, slide 6).

(p.301) To the degree that receiving food stamps provides a measure of the number of children whose income situation would otherwise make them eligible for income assistance (TANF), we can provide an alternative estimate of the number of children who would be removed from the welfare caseload because of their income situation based on food stamp data. In other words, data on the number of children receiving food stamps should allow us to estimate the number of children receiving welfare. Remember, the percentage of children in poverty receiving food stamps has paralleled the percentage of children receiving welfare over the last two decades (Figure 10.9). It has only been since the passage of welfare reform that there has been a divergence.

Estimating the Number of Children on Welfare

Historically impoverished children have been provided a package of “means-tested” benefits that served as a safety net. The major benefits in this package included both food stamps and welfare. Most poor single mothers who qualified for food stamps were also eligible for welfare. As a result, it has been possible to make a rough estimate the number of children receiving welfare based on the number of children receiving food stamps. Since the economic situation of children receiving food stamps has not materially changed during the last several years (see Table 10.6), we should be able to estimate the number of children who should have received welfare in 2002 using data from the Food Stamp program. To compute this estimate I multiplied the ratio of the number of children receiving welfare over the number of children receiving food stamps for 1993 by the number of children receiving food stamps in 2002. The data in Table 10.7 estimates that almost 2.7 million more children should have received welfare benefits than actually did. Since eligibility for foods stamps should predict eligibility for welfare, these data suggest that close to 2.7 million children may have lost welfare benefits even though their income situation, as measured by receipt of food stamps, has not materially changed.

The data from children receiving food stamps suggest the economic situation of poor children has not substantially improved since the passage of welfare reform—which calls into question the putative achievement represented by the dramatic state welfare caseload declines, especially with respect to child recipients.

It should be noted that the discrepancy in food stamp caseload decline and welfare caseload decline varies substantially among the states. Those (p.302) states with the greatest welfare caseload declines record the greatest discrepancy. This suggests that many children have been removed from the welfare program even though their poverty has remained.

Perhaps there is some other explanation for this discrepancy unique to the food stamp program. We can also look at the economic situation of the children removed from welfare by examining another data source that allows assessing the change in the economic situation of poor children during the last six years—school lunches. As with food stamps, children from welfare families have also received a government-subsidized free lunch through the National School Lunch Program.

Child Poverty Measured in the School Lunch Line

The National School Lunch Program (NSLP) provides lunches to children at school.16 Part of the program includes a federally subsidized free lunch for poor children. To qualify for the program the child’s parent must complete an income verification application. A child qualifies for a free lunch if the parent’s income is below 130 percent of the poverty line.17 The advantage of administrative data from this program is that it derives from an income verification application completed and signed by the parent and independent of TANF and the food stamp program.18 It should be noted that the number of children receiving free lunch through the NSLP does not include infants and young children in poor families who are not enrolled in school. Thus, it is not a complete measure of child poverty, but only a proxy measure of child poverty among school-age children.

As with food stamp data, we would expect that as the number of children receiving welfare declines, there would be a concurrent decline in the number of children receiving free lunches (see Figure 10.12).

(p.303)

The Fading Promise of Welfare Reform to End Child Poverty

Figure 10.12 Children Receiving Welfare and Subsidized Lunch in Wisconsin

Source: www.childwelfare.com (state Welfare Report Cards, slide 4).

Reports from the National School Lunch Program indicate that the overall income characteristics of those eligible and receiving free lunch has not changed since the passage of welfare reform. Figure 10.12 displays a comparison of the number of children receiving free lunches with the decline in the number of children receiving welfare in Wisconsin.19

In 1995, the number of children receiving welfare in Wisconsin was roughly equivalent to the number of children receiving free lunch provided by the NSLP. Shortly after the passage of welfare reform the number of children receiving welfare declined from over 120,000 to less than 35,000. Yet, the number of children eligible and receiving subsidized free lunch continued to increase.

In Florida also, there was a similar divergence in the number of children receiving welfare and the number of children receiving free lunch since welfare reform (Figure 10.13). What is striking with the data from Florida is the dramatically large number of children receiving free lunch relative to the small number now receiving welfare.

(p.304)

The Fading Promise of Welfare Reform to End Child Poverty

Figure 10.13 Children Receiving Welfare and Subsidized Lunch

Source: www.childwelfare.com (state Welfare Report Cards, slide 4).

The same story can be said for Illinois, where the number of children living in poverty and receiving free lunches has increased, while welfare distributions to them have fallen (Figure 10.13). In both Louisiana and Mississippi the number of children receiving free lunch was almost twice the number of children receiving welfare. Since the passage of welfare reform, the number of children receiving welfare benefits has been sharply reduced while the number of children receiving free lunch has remained about the same (Figure 10.13).

National Trend

Figure 10.14 displays the national trend in terms of the number of children receiving welfare and the number of children receiving a subsidized free lunch throughout the United States. From 1977 to 1995 the difference between the number of children eligible for the free lunch program at school and the number of children on welfare was about 2 million.

(p.305)

The Fading Promise of Welfare Reform to End Child Poverty

Figure 10.14 Children Receiving Welfare and Free Lunch

After the passage of welfare reform and the resultant reduction in welfare caseloads, the difference has exceeded 8 million. This suggests that many poor children are without welfare benefits even though their economic situation has not improved. In brief, the net result of welfare reform seems to be that many children who received income assistance prior to reform are no longer receiving that assistance after reform.

A Summation

Using administrative data from the National School Lunch Programs’s free lunch benefit, it is possible to develop an estimate of the number of children who have lost welfare benefits since the passage of welfare reform, even though their economic situation has not changed (Table 10.8). The estimate of the number of children removed from welfare is built on the assumption that the ratio of the number of children receiving welfare to the number of children receiving a subsidized free lunch would remain the same between 1996 and 2002.20

(p.306)

Table 10.8 Child Recipients of Welfare and Free Lunch, 1996 and 2002

 

 

2002

2002

 

 

1996

Actual

Predicted *

Difference§

Florida

 

 

 

 

Children on welfare

394,797

101,431

405,815

304,384

Free lunch

727,851

748,164

748,164

 

Welfare / Free lunch

54%

14%

54%

 

Illinois

 

 

 

 

Children on welfare

455,591

142,934

497,351

354,417

Free lunch

524,111

571,668

571,668

 

Welfare / Free lunch

87%

25%

87%

 

Louisiana

 

 

 

 

Children on welfare

161,763

51,914

151,397

99,483

Free lunch

373,101

349,192

349,192

 

Welfare / Free lunch

43%

15%

43%

 

Mississippi

 

 

 

 

Children on welfare

95,992

27,736

95,798

68,062

Free lunch

252,395

251,886

251,886

 

Welfare / Free lunch

38%

11%

38%

 

Wisconsin

 

 

 

 

Children on welfare

122,864

33,817

120,718

86,901

Free lunch

148,204

145,616

145,616

 

Welfare / Free lunch

83%

23%

83%

 

U.S. Average

 

 

 

 

Children on welfare

8,577,084

3,916,000

8,778,534

4,862,534

Free lunch

12,291,578

12,580,270

12,580,270

 

Welfare / Free lunch

70%

31%

70%

 

*Predicted children on welfare in 2002 (italicized) is calculated by multiplying (the ratio of children on welfare in 1996 divided by children receiving free lunch in 1996) by free lunch recipients in 2002

§ Difference between the predicted and actual number of child recipients of welfare in 2002.

As seen in Table 10.8, more than 8.7 million children were estimated eligible for welfare based on the school lunch data in 2002. Yet, less than 4 million children received welfare benefits. Thus, this data suggests that welfare reform may, indeed, have resulted in the dropping of millions of poor children from the welfare program.

The data on the subsidized lunch program correspond with the findings from the Food Stamp program, namely, that children have been removed from the welfare program for reasons other than their improving economic situation. The free school lunch data suggest that the children removed from welfare remain poor and need to rely on the subsidized free lunch program.

When welfare reform was being debated researchers from the Urban Institute warned that as many as a million poor children might be removed from the program. The data in Table 10.8 suggest that this was an underestimate. The data in this table suggests that as many as 4.8 million poor children lost their welfare benefit even though they remain in poverty as assessed by enrollment in the subsidized free lunch program.

(p.307)

The Color of Welfare

Either I do the housework or Mrs. Long does the housework, or we get some body to come in and help us, but someone has to do it, and it does seem to me that if we can qualify these people to acpept any employment doing something constructive, that is better than simply having them sitting at home drawing welfare.

Senator Russell Long

The dismantling of income support programs through “welfare reform” raises the question of who suffers as a result of this change. As seen in Table 10.9, Black children are the major victims of the dismantling of the welfare program. In the top five leading states, in terms of caseload reduction, Black children make up the majority of welfare recipients. In Illinois, the most populous state, almost three quarters of the TANF child population are Black even though Black children are less than one-fifth of the state’s child population. In Wisconsin, Black children represent less than one-tenth of the state’s child population but they represent half of the state’s welfare (TANF) population.

Table 10.9 The Color of Children Receiving Welfare (Tanf)

 

Black Children

White Children

 

State Population (%)

TANF Population (%)

State Population (%)

TANF Population (%)

Wisconsin

8

50

82

18

Florida

21

55

57

23

Illinois

19

74

60

13

Mississippi

46

87

53

13

Louisiana

41

87

56

12

New York

18

42

58

19

New Jersey

16

61

62

11

California

7

23

37

21

Pennsylvania

13

55

80

29

North Carolina

26

66

63

24

Michigan

18

55

73

39

Ohio

14

56

80

40

Texas

12

30

44

16

Virginia

24

69

67

27

Georgia

36

81

58

17

Alabama

32

78

65

22

Source: www.childwelfare.com (State Welfare Report Cards, slide 11).

(p.308) In both Mississippi and Louisiana Black children represent 87 percent of the welfare (TANF) population even though they are less than half of the state’s child population. In these and most other states Black children are substantially overrepresented in the welfare population. The major reductions in income support for children, which welfare reform has brought about, have primarily impacted Black children.

Welfare reform resulted in many children who remained poor losing their welfare benefit—and the brunt of that loss was borne by poor Black children. Although some have suggested welfare reform has helped Black children, a careful and close review suggests quite the opposite. Black children have suffered the greatest loss of benefits—regardless of their poverty—as a result of welfare reform.

The data in Table 10.9 demonstrate that the welfare program in the United States has its greatest impact on Black children (Hines, Lemon, Wyatt, and Merdinger, forthcoming). Although welfare impacts all race and ethnic groups it is concentrated among Black and Hispanic children.

Out-of-Wedlock Births

Before closing this discussion on the impact of welfare reform one important issue remains—its impact on out-of-wedlock births. One of the major concerns expressed during the welfare reform debate was the connection between increasing welfare dependency and out-of-wedlock births. The welfare reform legislation specifically addressed this problem and included incentives to states to lower the rates of out-of-wedlock births. Rector and Fagan (2001) have suggested that welfare reform contributed to reducing the number of out-of-wedlock births.

The data in Figure 10.16 show the change in out-of-wedlock births for the states with the largest declines in their welfare caseloads (Census Bureau, 2002). The data suggest that rather than declining, the number of births to unmarried women nationwide has increased despite the decline in welfare caseloads. In fact, for all of the states the percentage of out-of-wedlock births increased. In 1996, the national average was 32.4, which increased slightly to 33.0 by 1999.

It is difficult to detect long-term and consistent changes in out-of-wedlock births as a result of substantial reductions in the welfare caseloads. The data here are not conclusive but simply suggest that welfare reform may not have reduced out-of-wedlock births.

(p.309)

The Fading Promise of Welfare Reform to End Child Poverty

Figure 10.16 Changes in the Percentage of Births to Unmarried Women, 1992–1999

Source: Division of Vital Statistics, National Center for Health Statistics, Center for Disease Control (2002).

Discussion

Just as the origins of the public aid and child welfare were linked at the beginning of the twentieth century, so their fates were linked at the century’s end. If welfare was created to avoid the removal of needy children from their mothers, then eliminating welfare must have implications for child welfare policy.

Dorothy Roberts, Shattered Bonds

Critics of welfare reform expressed concern that removing the entitlement status for welfare would give states carte blanche to reduce their welfare caseload. The data examined in this chapter suggest that many states simply reduced their welfare caseloads by no longer providing many poor children with welfare regardless of these children’s economic circumstances. This would certainly seem to be the case in Wyoming and Idaho (see Lindsey and Martin, 2003). But it also seems to be true for many of the states with dramatic welfare caseload reductions that are not matched with similar declines in child poverty, as revealed by the number of child food stamp recipients or NSLP free lunch recipients (see Table 10.10).

(p.310)

Table 10.10 Child Poverty and Participation in Means-tested Programs

 

Child Population

2000 Children Below Poverty *

2002 Children Receiving Welfare

2002 Children Receiving Food Stamps

2002 NSLP Free Lunch Recipients

Florida

3,646,340

791,489

101,431

457,100

748,164

Illinois

3,245,451

498,804

142,943

443,172

571,668

Louisiana

1,219,799

312,008

51,914

314,237

349,192

Mississippi

775,187

184,010

27,736

171,197

251,886

Wisconsin

1,368,756

188,461

33,817

142,714

145,616

U.S. Total

72,294,000

 

3,916,000

9,728,879

12,580,270

*U.S. Census Bureau estimate

The data in Table 10.10 raise concern about the removal of children from the welfare caseload. For example, approximately 790,000 children live in poverty in Florida, yet only about 101,000 or 12.7 percent of these poor children receive welfare benefits.

Even though these children fail to receive welfare, about 457,000 receive food stamps and almost 750,000 receive a subsidized free lunch (keep in mind that only school-age children can receive the subsidized free lunch). Since all of these programs base eligibility on a similar means test, the discrepancy indicates, in a sense, denial of welfare benefits to likely eligible children. These findings are repeated for the other states.

Extreme Poverty Increasing for Black Children

Although Rector and Fagan (2002), Pardue (2003) and others have suggested that welfare reform has produced a decline in child poverty, especially among Black children, this view conflicts with the data on extreme child poverty for Black children. The Children’s Defense Fund analyzed data from the Census Bureau’s Current Population Survey and found that Black children living in extreme poverty (defined as less than half the poverty line income) has increased substantially since the passage of welfare reform (see Table 10.11). The percentage has increased from 6.4 to 8.4 percent. Further, during this period the Children’s Defense Fund calculations estimate that the number of extremely poor children not receiving welfare has risen sharply from 1,062,000 in 1996 to 1,649,000 in 2002. Thus, despite a period of substantial economic prosperity, the situation for the poorest children in the United States has apparently not improved.

(p.311)

Table 10.11 The Increase in Extreme Poverty for Children Since the Passage of Welfare Reform

 

Black Children Living in Poverty

Percentage of Black Children Living Poverty

Percentage of all Children Living in Extreme Poverty

Extremely poor children not receiving welfare

1996

680,000

6.4%

3.6%

1,062,000

2001

932,000

8.4%

4.0%

1,649,000

Source: Children’s Defense Fund (2003).

In fact, this data suggest that there has been a substantial increase in the number of Black children living in extreme poverty; only now the situation is compounded by the absence of welfare.

Conclusion

With the enactment of welfare reform the historic program that provided income protection to disadvantaged children was ended. With the dismantling of the old welfare system a new and more restrictive system has emerged. There has been increased participation of a number of single mothers in the labor market, and although census data are not conclusive, at the national level there has been a downward trend in the rate of poverty for the first several years since passage of welfare reform. However, child poverty rate declines do not appear to be related to the declines in welfare caseloads when examined at the state level.

It appears that millions of poor children no longer receive welfare, children who in the past would have received it. Data from the food stamp program indicates that the number of poor children who have lost welfare benefits, even though their economic situation has not improved, is about 2.7 million. Data from the National School Lunch Program indicates the number of poor children who have lost their welfare benefits, even though their economic situation has not improved, may be as high as 4.8 million. What has happened to these children who no longer receive welfare but who apparently are still very poor? That is a question that has yet to be answered.

The data examined here suggest that the consequence of welfare reform is not the achievement for poor children some have celebrated. The story of that achievement, at least for poor children, does not conform to the state level data. For some children in families where the mother has left (p.312) welfare and gone to work, the promise of welfare reform may have been realized. But these children are the exceptions. Millions of impoverished children who used to receive income protection (welfare) now find themselves without it. From the perspective of these children, welfare reform appears to be, at the least, a substantial net financial loss. The most recent data, in fact, suggest that poverty, and in particular extreme poverty, has increased for Black children in recent years.

The social contract which America had forged with poor children over the years has been replaced. The terms and expectations of the new social contract, especially in regards to children, are unclear. It is being worked out at the state level and taking different form in each of the states. What is clear is that life is harder for poor children, especially poor children of color. What all this will mean in the long term is yet to be determined.

Welfare as we knew it has ended. We are entering a new era. The solution is not to reinstate welfare. Even if that were possible, it would not be desirable, for a number of reasons which we will get to in the next chapter. There are other policies and programs that can be easily instituted that would more effectively lift millions of children out of poverty. In the next chapter we explore what these are.

Notes:

(1) Several states that have been in the forefront of welfare reform, such as Wisconsin, Florida, and Illinois, have reduced their welfare caseloads by close to 75 percent from 1996 to 2002. However, these states had embarked on welfare reform earlier using waivers and thus achieved even greater caseload reductions than indicated in table 10.1.

(2) Wyoming and Idaho would be included among the top five states in terms of the percentage decline in their welfare caseload (Lindsey and Martin, 2003). However, they were not included here since they were such small states. The welfare caseload in Wyoming declined from 18,271 in 1993 to 13,531 in 1996 and 856 in 2002. In Idaho the welfare caseload declined from 23,547 in 1996 to 2,360 in 2002. Discussing welfare reform, Sen. Daniel Patrick Moynihan argued, “This is not reform. This is repeal of Aid to Families with Dependent Children.” For these two small states Moynihan’s words seem prophetic. See PBS Online, Reforming Welfare, December 26, 1995.

(3) The 2001 fiscal year welfare caseload for all recipients was 5,471,863, of which 4,054,672 were children. I multiplied the ratio of children to all recipients in 2001 (.741) by the average of all recipients in 2002 (5,284,711) to estimate the number of children in 2002 (U.S. Department of Health and Human Services, 2002). See www.acf.dhhs.gov/programs/opre/ar2001/chapter02.xls.

(4) Botsko, Snyder, and Leos-Urbel (2001: 16–17) also write that, “Although child welfare caseloads have gone up at the same time welfare caseloads overall have gone down … administrators attributed the increase to widely publicized child deaths, especially that of Kayla McKean, which led to legislation in 1999 bearing her name.”

(5) The problems of the county-run child welfare system in Milwaukee became so severe that it prompted a state takeover of the system in 1997.

(6) It should be noted that the rates of child abuse reports did not apparently increase as rapidly as the foster care populations. This is surprising because the major entry point into the foster care system is through the child protection system (U.S. Department of Health and Human Services, 2001).

(7) Although Rector and Fagan (2001) found an estimate—national child poverty from the Census Bureau—that supports their view, they fail to identify the limitations of this measure to assess what happened to children as a result of welfare reform at the state level.

(8) According to the Administration for Children and Families (2002) employment was the reason for closure in 19.7 percent of TANF closed-case families for 2000, 23 percent in 1999, 21.7 percent in 1998, and 16.2 percent in 1997.

(9) That is, 90 percent of the time the estimate will range between 725,207 and 867,770. Ten percent of the time the estimate will fall outside this range. In short, the Census Bureau is providing an estimate of child poverty based on a relatively small sample of data that include poverty measures as only a small part of the larger interview data collected.

(10) This estimate is at the 90 percent confidence interval, which means that the “rate of child poverty” is estimated to range between roughly 11 to 16 percent nine out of ten times. One time in ten in will be outside this estimate.

(11) Census data permit estimating the “rate of child poverty” but is imprecise. The level of imprecision is greater than the amount of change detected during the period of interest. It is like trying to determine the change in the weather with a thermometer which could be off by 5 degrees when we want to know when the temperature goes up 3 degrees.

(12) The welfare reform legislation did include provisions that reduced or eliminated food stamp assistance for legal immigrants (although some of this was later restored) and established time limits for able-bodied adults without children.

(13) The food stamp benefit increases as income for the eligible client decreases. Thus, an increasing average benefit suggests that the income of the average recipient has decreased.

(14) Food stamp data at the state level are based on sample sizes designed to provide reliable estimates at the state level.

(15) Figures 10.10 through 10.11 can be found at the childwelfare.com website. The website provides state information which includes a “Welfare Report Card.” Slide 6 of the welfare report card is entitled, “Food Stamps and Welfare Recipients.” Consequently, this graph is available for all 50 states.

(16) U.S. Department of Agriculture (USDA), Food and Nutrition Service (FNS), National School Lunch Program. National Level Annual Summary Tables: Fiscal Years 1969–2001. See www.fhs.usda.gov/pd/slsummar.htm. State information is also available in the Food Research and Action Center’s State of the State: A Profile of Food and Nutrition Programs Across the Nation. Washington, D.C.: FRAC, 2002. Online at www.frac.org.

(17) The National School Lunch Program (NSLP) is a federal entitlement program. Income eligibility guidelines for the NSLP are derived from the federal poverty guidelines and are updated annually. To participate in the NSLP, schools and institutions must agree to oper ate food service for all students and to provide free and reduced price lunches to students unable to pay the full price based on income eligibility criteria.

(18) Alberta Frost, Free and Reduced Price Certification: An Update. Washington, D.C.: U.S. Department of Agriculture. March 2002. This report suggests that reductions and termina tions have increased from 11 percent in 1986–87 to 18 percent in 2000–01.

(19) U.S. Department of Agriculture (USDA), Food and Nutrition Service (FNS), National School Lunch Program. National Level Annual Summary Tables: Fiscal Years 1969–2002. See www.fhs.usda.gov/pd/slsutnmar.htm. State information is also available in the Food Research and Action Center’s State of the State: A Profile of Food and Nutrition Programs Across the Nation. Washington, D.C.: FRAC Publications, 2002. Available online at www.frac.org.

(20) The eligibility standards for the subsidized free lunch did not change during this period, and the studies of the characteristics of NSLP subsidized free lunch recipients indicate no major change in the recipient population during this period (Wemmerus, Forkosh, and Almond, 1996; Food Research and Action Center, 2002).