The Effect of Welfare Reform on the Incomes and Earnings of Low-Income Families: Evidence from the Current Population Survey

Laura Stander Connolly

JCPR Working Papers from Northwestern University/University of Chicago Joint Center for Poverty Research

Abstract: An important question surrounding welfare reform is "What has happened to the earnings and incomes of families who were receiving public assistance when the new policies took effect?" I address this question by examining the impacts of early state-level welfare waivers on the earnings and income growth of welfare recipients. Using a detailed nationally representative data set (the Current Population Survey), I find that 1) early work related welfare reforms generally did not increase the earnings of welfare recipients (with minor exceptions), and 2) waivers often had a negative (but small) effect on the incomes of welfare recipients. In addition, waivers appear to have had a less detrimental effect on rural than on urban recipients. This is an interesting finding in light of research that shows that rural employment and earnings generally lag behind those in urban areas. It suggests that even though rural residents face greater barriers to employment, welfare reform has a smaller marginal effect on rural recipients.

Date: 2000-06-05
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Persistent link: https://EconPapers.repec.org/RePEc:wop:jopovw:181

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