Welfare Reform and Changes in the Economic Well-Being of Children

Neil G. Bennett, Hsien-Hen Lu, Younghwan Song

NBER Working Paper No. 9399
Issued in December 2002
NBER Program(s):Children, Health Economics

Since the implementation of the Temporary Assistance for Needy Families program in late-1996, welfare rolls have declined by more than half. This paper explores whether improvements in the economic well-being of children have accompanied this dramatic reduction in welfare participation. Further, we examine the degree to which the success or failure of welfare reform has been shared equally among families of varying educational background. We analyze data from the March Current Population Surveys over the years 1988 through 2001. Specifically, we link data for families with children who are interviewed in adjacent years and determine whether their economic circumstances either improved or deteriorated. We use two alternative approaches to address this general issue: a variety of regression models and a difference-in-differences methodology. These approaches provide consistent answers. In a bivariate framework TANF is associated with higher incomes; but this association becomes insignificant in the presence of business cycle controls. We also determine that children who were poor at an initial time period benefit differently, depending on their parents' educational attainment level. Poor children with parents who do not have a high school degree are significantly worse off in the TANF era, relative to the era prior to welfare reform, than are their more educated counterparts.

download in pdf format
   (883 K)

email paper

Machine-readable bibliographic record - MARC, RIS, BibTeX

Document Object Identifier (DOI): 10.3386/w9399

Published: Bennett, Neil G., Hsien-Hen Lu, and Younghwan Song. "Welfare Reform and Changes in the Economic Well-Being of Children." Population Research and Policy Review 23, 5-6 (Special Issue October-December 2004): 671-99.

Users who downloaded this paper also downloaded* these:
Schoeni and Blank w7627 What has Welfare Reform Accomplished? Impacts on Welfare Participation, Employment, Income, Poverty, and Family Structure
Blank w8983 Evaluating Welfare Reform in the United States
Meara and Frank w12480 Welfare Reform, Work Requirements, and Employment Barriers
Bloom, Canning, Moore, and Song w12688 The Effect of Subjective Survival Probabilities on Retirement and Wealth in the United States
Dave, Reichman, Corman, and Das w16659 Effects of Welfare Reform on Vocational Education and Training
NBER Videos

National Bureau of Economic Research, 1050 Massachusetts Ave., Cambridge, MA 02138; 617-868-3900; email:

Contact Us