Rural America in Transition: Poverty and Welfare at the Turn of the 21st Century

Daniel Lichter () and Leif Jensen

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

Abstract: Rural mothers, especially poor single mothers, face serious barriers to employment. At the same time, new legislation requires welfare recipients to find work and mandates time limits on receipt of public assistance. In this paper, we document changing rates of poverty, sources of income, including welfare income, and employment among rural female-headed families with children. We focus on the period before and after passage of the Personal Responsibility and Work Opportunity Reconciliation Act (PRWORA) of 1996. Pooled files from the March annual demographic supplement (1989 through 1999) of the Current Population Survey are used for this purpose. During the past decade, especially since welfare reform legislation was passed, rural poverty rates (including deep poverty) have declined among female-headed families and their children. Rates of welfare receipt also have dropped dramatically and labor force participation has increased along with average earnings. Moreover, the income of all rural female-headed families with children increased on average over the past few years. Our data, nevertheless, also tell a familiar story of persistent rural-urban inequality: more than four in 10 rural female-headed families were poor, and about one-half of these had income that was less than one-half of the poverty income threshold. This happened even though the share of rural female heads who were employed grew and average earnings rose. The problem today is that one-third of working rural female heads are in poverty, a rate higher than at any time during the period examined here. Moreover, the rise in the proportion with earnings has not kept pace with the large decrease since the passage of PRWORA in the proportion with welfare income. Neither unbridled optimism nor pessimism about future trends in rural poverty is warranted, especially as the "hardest cases" and other nonworking welfare-dependent mothers run up against time limits for welfare receipt.

Date: 2000-06-14
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Persistent link: https://EconPapers.repec.org/RePEc:wop:jopovw:187

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